Friday was the 27th day of the current QQQQ short term up-trend. There were 10 new highs and 6 new lows in my universe of 4.000 stocks on Friday. Three of the ten new highs were on the IBD100 lists from today’s edition: STAR, HANS and JJNF. Since the first day of the QQQQ uptrend (by my definition) on 3/18, the QQQQ has climbed 13%, the Ultra long QQQQ ETF by 28%, and the SPY by 8%. During this same period, 84% of the stocks in the Nasdaq 100 Index (measured by the ETF, QQQQ) have advanced, with one third advancing 20% or more. The key to successful trading on the long side is to have the relevant index in an up-trend.
There were 16 new highs and 7 new lows in my universe of 4,000 stocks on Wednesday. Six stocks on my IBD100 lists from the past year reached new highs: AZO, GMCR, JOSB, FIZZ, QSII and LFT. The QQQQ up-trend continues, now in its 25th day. Stay with the trend and ignore the pundits’ prognostications.
The media pundits claim the market needs to rest. The market gets tired and needs to consolidate for a while–such utter nonsense! I wrote a few posts ago that the rebound in the indexes thus far is actually quite small, compared with the rebounds in the 30’s. The Dow is up only about 24% from the bottom, compared with about 100% snap backs from the bottoms in the 30’s. The QQQQ is only in the 22nd day of its up-trend. The up-trend that ended July 27, 2007, lasted 80 days! The current rally may have a lot longer to go.
Meanwhile, by following the market’s up-trend and the GMI , my account is now in the black for the year and I am now working off the 5% loss from the prior year. How am I doing it? Just by buying the types of stocks that I list to the right of my post each day. Long positions in stocks like AAPL, GMCR and NFLX have helped, along with some call options on QLD. Now that so many stocks are in up-trends I am also writing cash secured puts in my IRA on stocks I hope never to own. I will write more about this interesting technique in a later post.
GMI and GMI-R each lost one. There just aren’t enough new highs to compute the 10 day successful new high indicator. There were only 12 new highs and 8 new lows in my universe of 4,000 stocks on Monday. Seven of the 12 are on my IBD100 lists: SNDA, ALGT, NFLX, NTES, LFT, GMCR and CPSI. These stocks, some of which I own, are leading the market up.