Wishing Wealth Blog

The GMI is one, and the GMI-S is 13.  Only 14% of the Nasdaq 100 stocks closed above their 30 day averages and only 20% are in an up-trend, the lowest percentage since last July.  There were only 45 new highs in my universe of 4,000 stocks, and 60 new lows.  Only 12% of the 369 stocks that hit a new high 10 days ago closed higher than they did 10 days ago.  This is clearly not the type of market to invest in growth stocks with the hope they will hit new highs.  Both the SPY and QQQQ closed below their 10 week averages.  Only 35% of the stocks in my universe closed above their 10 week averages.  Friday was the 4th day in the current QQQQ down-trend.

The IBD 100 stocks did not offer a refuge from this market decline.  As the accompanying table shows, few of the stocks in the IBD 100 stock  lists I have been following did better than the Nasdaq 100 stocks.  Only 6-15% of the stocks in these lists rose on Friday, compared with 9% of the Nasdaq 100 stocks. There were  a maximum of 4 new highs and only 19-24% of the the stocks in each list closed above their 30 day averages, slightly above the 14% for the Nasdaq 100 stocks.  Under 50% of the stocks in the lists published since November closed higher than on the day the list was published.

Buying stocks in the current market down-trend represents to me fighting the odds.  Since about 70% of all stocks go with the market averages, one should be in cash or short.  There is plenty of time to go long once a new up-trend establishes itself.

See my disclaimers at the bottom of yesterday’s post.