Cramer discovers techs–finally! IBD MeetUp; GMI: +5: Catching HANS

To my visitors: I am only one trader, not a guru, and not a financial advisor.  I am presenting my own opinions and my own experiences and people are welcome to decide for themselves what, if anything, on this site is of value to them.  Please refer to the additional comments, highlighted in red, at the end of this post.

Cramer finally discovered tech stocks today—33 days into the rally.  However, he endorsed CSCO and MSFT, two long time losers.  While CSCO has a promising chart, MSFT does not.  It is clear to me that Cramer is not a believer in charts–he attempts to discern the mythical value of stocks. Better he should stick to entertainment and not make predictions…………………………………………..

Tonight was IBD Meetup night.  Unfortunately, it conflicted with my son’s basketball game.  So I missed the first hour. What a difference a rally makes!  There were about a dozen people there, all discussing the market and their holdings.  Most members had not wanted to attend last month’s meeting.  Some people had made money the past month, and some were still timid about owning stocks.  I asked people about GOOG–most were afraid of it–a good sign.  I did not find people to be overly bullish about the market but most were looking for stocks to buy.  COH, BBBY, and BBY were discussed while I was there.  Given the attendees’ ambivalence, this rally may have a ways to go………………………………

The GMI dropped one to +5, because there were only 99 successful 10 day highs today.  Gmi622 (Click on chart to enlarge.) Part of the reason for the drop in number was that there were only 136 new highs 10 days ago.  The other components remained strong.  There were 184 new highs today and only 17 new lows.  While 45% of the Nasdaq 100 stocks rose, 52% of the S&P 500 stocks and 47% of the Dow 30 stocks rose.  We are in the 33rd day of the rally (U-33) and the percentage of stocks in my universe of 4,000 stocks that closed above their 10 week average climbed back to 80%. ………………………………………

In response to last night’s post, a reader asked me how I could have detected the rise in HANS early on.  The purpose of my example was to show that one does not have to catch a rocket early on to profit.  Anytime one discovered that HANS was a rocket, it could have been purchased for a profit.  One does not need to catch a rocket as it leaves the launch pad.  There is plenty of time to hitch a ride, as a true rocket travels for months on its journey to the moon……………………………….

Send your feedback and questions to: silentknight@wishingwealthblog.com.

Please remember that the stock market is a risky place, especially now.  I am not providing recommendations for you to follow.  My goal is to share tools and methods that I have used over the past 40 years of trading, so that you may learn from them and adapt them to your trading style and needs.  While I do my best, I do not guarantee the accuracy of any statistics computed or any resources linked to my blog.  Please consult with your financial adviser and a mental health practitioner before you enter the stock market,  and please do not take unaffordable risks in the current market environment.  See the About section for more statements designed to protect you (and me) as you navigate this market. Past performance does not guarantee future results, but I would rather learn from a former winner than a loser.

GMI: +6; HANS-rocket prototype; IBD Meetup tomorrow night

It was another positive day, with 213 successful 10 day new highs, the most in weeks. (See archive post on 4/26 for indicator definitions.)   Buying stocks at new highs has been profitable.   In fact, the median increase in the 213 stocks that hit a new high 10 days ago and rose is 3%, with 24% of them increasing 4% or more and the top 11 rising 9-23%.   The largest gainer was SWN, up 23% in the past 10 days, followed by CNQ, up 18%, both energy stocks.Gmi621 The GMI remains at +6.   There were 168 new highs today (in my universe of almost 4,000 stocks) and only 15 new lows.   The Nasdaq 100 did better today than yesterday with 44% of its stocks rising, compared to 40% of the S&P 500 and 33% of the Dow 30 stocks. This is day 32 of the up trend (U-32).   The percentage of stocks closing above their 10 week average declined 2 points, to 78%…………………………………

Check out HANS, one of the most consistent risers of this market. Hans2 (Click on weekly chart to enlarge.)    It broke to a new high today.   Note that HANS has not closed below its rising 10 week average (dotted line) since October 2004.   This is the prototype of a rocket and you might want to compare all of your potential purchases to this chart.   A shrewd investor could have bought HANS anytime since October, 2004, placed a stop below its 10 week average, moved it up as it rose, and never lost any sleep over the stock.   He didn’t have to wait for a base to form or for a bounce.   In my opinion, this is the sanest way to trade.   Too simple?   Check it out on the runs of past winners (for example TASR, 6/03-4/04)…………………………………………..

Tomorrow night is the IBD Meetup group meeting. It will be interesting to see if the members have rebounded.   Last month’s meeting, you will remember, consisted of only 3 persons and the low turnout was a wonderful contrary indicator.   When traders won’t even meet to talk about the market, a rally is imminent.

GMI: +6; Stay the course

To my visitors: I am only one trader, not a guru, and not a financial advisor.  I am presenting my own opinions and my own experiences and people are welcome to decide for themselves what, if anything, on this site is of value to them.  Please refer to the additional comments, highlighted in red, at the end of this post.

Today was a quiet day. The GMI remains at +6 and there were 211 new highs and only 15 new lows.  Gmi620_1 However, only 33-37% of the Nasdaq 100, S&P 500 and Dow 30 stocks rose today.  The good news is that all of these indexes closed above their 10 day averages and their up trends remain intact.  We are in the 31st day of the rally  (U-31) and 80% of the nearly 4,000 stocks in my universe closed above their 10 week average.  Some of my stocks actually climbed today (BOOM, SHLD, GOOG, NDAQ).  I have no wise words for tonight other than that I will stay the course and see if we get the highly anticipated end-of-the-month/quarter rally.

Send your feedback and questions to: silentknight@wishingwealthblog.com.

Please remember that the stock market is a risky place, especially now.  I am not providing recommendations for you to follow.  My goal is to share tools and methods that I have used over the past 40 years of trading, so that you may learn from them and adapt them to your trading style and needs.  While I do my best, I do not guarantee the accuracy of any statistics computed or any resources linked to my blog.  Please consult with your financial adviser and a mental health practitioner before you enter the stock market,  and please do not take unaffordable risks in the current market environment.  See the About section for more statements designed to protect you (and me) as you navigate this market. Past performance does not guarantee future results, but I would rather learn from a former winner than a loser.

Strong Market, GMI: +6; New Measure of Market Strength; GDW, BBY

To my visitors: I am only one trader, not a guru, and not a financial advisor.  I am presenting my own opinions and my own experiences and people are welcome to decide for themselves what, if anything, on this site is of value to them.  Please refer to the additional comments, highlighted in red, at the end of this post.

This market keeps getting stronger for those of us who buy stocks at new highs. Gmi617 There were 387 new 52 week highs in my universe of almost 4,000 stocks and only 10 new lows.  Out of the 206 stocks that hit a new high 10 days ago, 152 (74%) closed higher Friday than 10 days earlier.  Two thirds of the  S&P 500 and Dow 30 stocks advanced Friday, compared to 51% of the Nasdaq 100 stocks.  We are in the 30th day of the advance (U-30)…………………………………..

I am introducing today a new measure of the market’s strength.  One indicator of a strong stock is that it trades consistently above its 10 week moving average.  From now on, I will post in the GMI box the percentage of stocks in my universe that have closed that day above their 10 week moving average.  Today, this index registered 80%.  As time goes on I will plot how this indicator relates to the GMI  at market turning points……………………….

Since the QQQQ topped out on June 1, the index has fallen 1.35%.  Here is a list of the best 10 performers in my stock universe since then, that are trading at or near all time highs:  DSTI (+116%), MICU (+68.5%), MXC (+67%), WPTE (+39%), GEOI (+38%), JDO (+32%), GDP (+20%), ENWV (+28%), COSI (+27%), ISRL (+25%). Research their industries and earnings and revenues, and see if any look like future winners………………………..

A friend’s father gave her some shares of stock in GDW in the 1980’s.  She never sold it.  (Click on yearly chart to enlarge.) Oh, that we all had such a stock wise and generous parent. Gdw  This is not the typical rocket stock I trade, but I think it merits attention as a steady performer. You can see by the three blue markers that GDW has split 3 times over the past 20 years.  In that time it has increased 109x from a split adjusted low of  .61 to its Friday close of $66.74.  This is the type of stock I would like to put my sons in (and I still may).  Golden West Financial is the second-largest savings and loan company in the country and it is prospering in this time of refinancing with adjustable rate mortgages.Gdwekly   I do not know how long this 20 year run will continue. But the stock sure came to life again this week!  It closed at 66.74, up 6.29 for the week on high volume and closed just below its all time high of 66.97.  I may place a stop order to buy some for my son’s account around 67 on Monday. Maybe one day in the future he will come back to this post and thank his dad for buying good ol’ GDW for him………………….

Speaking of my sons, my elder son put me on to XM satellite radio when he bought an XM radio for his car.  It is the only stock I ever bought because of its story and not its technical pattern.  I began buying XMSR around 2 and traded it up to 11 and in and out through 30.  It topped out in December, 2004 at 40.89.  Finding potential buys by observing consumers in shopping malls has become known as a Peter Lynch strategy.  I find the strategy can work to give me ideas for stocks to check out.  So, my son came home today from college and went out to buy and install a navigation system in his car.  I think this may be an area ripe for investment.  So, now I need to find what stocks are involved in this field.  The system he bought is made by Pioneer, PIO’s chart looks ugly. Bby  He intends to buy the system at Best Buy—hmmmm.  He says all of his peers 19-25 like Best Buy (not Circuit City).  As this monthly chart shows, BBY broke out of a huge multi-year base this week.  Maybe this is how to capitalize on the trend towards electronic gadgets in the car and home. I looked up the electronics store sector index in TC2005, and low and behold, it is at a new peak, along with such electronic store stocks as ELBO, GME, GTRC, and CONN.  The strength of the sector index and these component stocks suggests to me that this is a sector worth researching for some best buys…………………………………

Send your feedback and questions to: silentknight@wishingwealthblog.com.

Please remember that the stock market is a risky place, especially now.  I am not providing recommendations for you to follow.  My goal is to share tools and methods that I have used over the past 40 years of trading, so that you may learn from them and adapt them to your trading style and needs.  While I do my best, I do not guarantee the accuracy of any statistics computed or any resources linked to my blog.  Please consult with your financial adviser and a mental health practitioner before you enter the stock market,  and please do not take unaffordable risks in the current market environment.  See the About section for more statements designed to protect you (and me) as you navigate this market. Past performance does not guarantee future results, but I would rather learn from a former winner than a loser.

GMI: +6, ETF winners and losers; Interest rates

To my visitors: I am only one trader, not a guru, and not a financial advisor.  I am presenting my own opinions and my own experiences and people are welcome to decide for themselves what, if anything, on this site is of value to them.  Please refer to the additional comments, highlighted in red, at the end of this post.

The GMI remains at +6 and the tech stocks continue to lead this rally.Gmi616 There were 291 new highs today in my universe of 4,000 stocks and only 12 new lows.  This is the greatest ratio of new highs to new lows since I posted the GMI on April 26.  By the way, a number of you have asked me how I compute the GMI–just check out my post in the archive on 4/26.  68% of the Nasdaq 100 stocks rose today, 69% of the S&P 500 stocks and 57% of the Dow 30.  This is turning into a respectable rally, having lasted for 29 days (U-29).

I thought you might like to see what ETF’s (exchange traded funds)have performed best in this period.  So, I used TC2005 to run a scan of ETF’s when the QQQQ advanced 5.2%.  The winners are OIH (+10.5%, oil service); EWW (+9.5%, Mexico stocks); IGW (+9%, semiconductors); IYE (+8.8%, energy); PWT and XLE (+8.6%, energy) and IIH (+8.5%, internet).  Clearly the oil and energy sectors were the place to be.  Will they continue to lead this rally? 

The biggest losers include EZA (-5%, South Africa); BHH (-4.5%, B2B internet); EWK (-2.8% Belgium) and EWJ (-1.6%, Japan). Other more traditional sector ETF’s that were weak include PPH, IXP, XLP and XLV. PPH (-1%) includes all of those wonderful pharmaceutical stocks (LLY, BMY, JNJ, WYE, SGP, MRK, VRX—these stocks declined 2.3-13.6% in this period) that the pundits have been recommending  to conservative investors in difficult times (like these??) I told you weeks ago that JNJ looked sick.

By the way, the short term interest rate index I have been monitoringIrx616 cracked today. Speculators are betting less on interest rate hikes, at least today they did. (Click on chart to enlarge.)

Send your feedback and questions to: silentknight@wishingwealthblog.com.

Please remember that the stock market is a risky place, especially now.  I am not providing recommendations for you to follow.  My goal is to share tools and methods that I have used over the past 40 years of trading, so that you may learn from them and adapt them to your trading style and needs.  While I do my best, I do not guarantee the accuracy of any statistics computed or any resources linked to my blog.  Please consult with your financial adviser and a mental health practitioner before you enter the stock market,  and please do not take unaffordable risks in the current market environment.  See the About section for more statements designed to protect you (and me) as you navigate this market. Past performance does not guarantee future results, but I would rather learn from a former winner than a loser.