GMI: 6; GMI Revised; EDU – another one of Judy’s picks

@ 12:01 am

The GMI is still at a maximum reading of 6, and the number of new highs in my universe of 4,000 stocks rose to 216 on Monday. Monday was the 32nd day in the current QQQQ short term up-trend. Gmi1015 Note that the Worden T2108 indicator has now declined to 67%, down from a high of 82% on October 5.  (Click on the table to enlarge.)

After much thought, I have revised the GMI by adding 4 new indicators, signified by an "*". The GMI-R  ranges from 0-10 and may provide a more sensitive measure of the trend of the general market.  For the time being, I will post the original GMI and the revised GMI-R in the table for the benefit of readers who use the original index…….

Weeks ago, my talented stock picking friend, Judy, urged me to buy EDU.  Her research indicated it was the "Kaplan" of China, helping the Chinese population to excel in prep-type exams to progress to higher educational levels . Edu She bought the stock in early July and August in the low to mid 50’s. Well, I told her Sunday night that I would not write about EDU then because earnings were expected Monday.  So, earnings came out and the stock shot up 12.56% on Monday in a sloppy market. (Click on chart to enlarge.)  I need to follow Judy’s advice much more often and post more of her picks.

See my disclaimers at the bottom of the prior post.

GMI: 6; IBD100 stocks out-perform Nasdaq100 and S&P500 stocks

@ 12:01 am

The GMI is still at a maximum reading of 6.  Gmi1012 But there were only 125 new highs in my universe of 4,000 stocks on Friday, down from 484 on Thursday and over 200 each other day last week.  And the Worden T2108 indicator is now at 74%, down from a high of 82% on October 5.  This Worden indicator can take a long time to top out as it remains in the 70-80 area.  The QQQQ completed the 31st day of its short term up-trend on Friday.  The last two recent large up-trends lasted 80 days and 86 days, suggesting that this QQQQ up-trend could have further to go.  I have learned over the years that it is futile to try to anticipate market turns.  It is far better to wait until my GMI signals the turn has occurred.  Of course, this means that I lose some profits as the top is formed.  However, I prefer to take this approach over  trying repeatedly (and mistakenly) to predict the turn….

People often tell me that the IBD 100 stocks under-perform the market because once they are added to the list they top out or recede.  Unlike most people with answers, I have data.  And the data indicate the absurdity of this assertion, at least in recent weeks.  Ibdperf101507 This table (click on to enlarge) shows the performance of select IBD 100 stock lists published in the past year.  A larger percentage (82-93%) of the stocks in each list the past six months closed Friday above their 30 day average than did the Nasdaq 100 (73%) or S&P 500 stocks (76%).  Similarly, the last 3 lists contained more stocks likely to be within 5% of their 52 week highs.  Finally, all of the IBD 100 stock lists over the past year had higher median changes (+9-20%) during the past 30 days than the Nasdaq 100 (7%) or S&P 500 stocks (6%).  (A median chnage of 6% means that one half of the stocks advanced more than 6% and one half less than 6% during the past month). Of course, the median chnage of +20% seen in today’s new list is influenced by the fact that  IBD adds to the list and retains each week only the strongest stocks, also reflected in the fact that 93% of the stocks in today’s list closed above their 30 day average. So, looking for winners among recent IBD 100 stocks might be a good strategy.  The past few months I have had considerable success selling near month covered calls on up-trending IBD 100 stocks and have been achieving 3-5% profits each month.  This Friday, options expire and I cash in again….

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