GMI: +3; Dow stocks strong, growth stocks weak; watch your neck

The GMI weakened on Friday to +3.  I was pretty worn down by the large drops in growth stocks last week.  Gmi0310_1 I did not realize until this weekend that the IBD growth mutual fund index has been below its 50 day average for much of last week.  So subtract one point from the GMI for each day last week.  The bottom line is that if the growth mutual fund managers cannot do well buying growth stocks, neither can I.  Friday was the fourth day in the short term decline in the QQQQ.  Still, 67% of the Nasdaq 100 stocks advanced, along with 82% of the S&P 500 stocks and 93% of the Dow 30 stocks.  The GMI-S rose a little to 38, although all of the QQQQ indicators remain negative.  The small and mid cap stocks had been a ray of sunshine in this market.  But as the WPM shows, these stocks weakened last week.  Wpm0310 The QQQQ, MDY and IJR indexes all closed below their 30 day averages, as did the majority of their component stocks.  Only the DIA stocks strengthened last week.  Nevertheless, all five indexes and their component stocks remained above their longer term 30 week averages.  A market like this is so divided and trendless, that it may be better to be on the sidelines.  But with everyone pointing out the head and shoulders top in the QQQQ, we could be fooled by a surprise rally in the tech stocks this week.  We just shouldn’t stick our necks out too far.

Please send your comments to:  silentknight@wishingwealthblog.com.

GMI: +5; Indicators still weakening

The GMI rose one to +5 because there were more than 100 new highs on Thursday in my universe of 4,000 stocks.  But the short term GMI-S fell to 25.  The Daily SPY Index and even the weekly QQQQ Index are close to turning negative.  My indicators continue to weaken and the QQQQ looks like a head and shoulders top is almost complete.  A close below the neck line, around 40, would signal a serious decline.  Gmi0309 Thursday was the third day in the current short term QQQQ down trend.  Between 27-37% of the stocks in the QQQQ, SPY and DIA rose on Thursday.  Only 28% of stocks are in a short term up trend and for the first time since November 8, fewer than one half of stocks (47%) closed above their 10 week averages.  This is not a time for brave longs.  I am raising cash and/or going short. 

Please send your comments to:  silentknight@wishingwealthblog.com.

GMI: +4; Market still weakening; 2 weak sectors

The GMI remained at +4.  There were only 63 new highs Wednesday and an equal number of new lows.  Gmi0308 Only 31% of the stocks that hit a new high ten days ago closed higher than they did ten days ago. Most of my indicators declined.  39%  of the Nasdaq 100 stocks rose along with 54% of the S&P 500 stocks and 60% of the Dow 30 stocks.  Only 4% of the stocks that doubled the past year hit a new high and only 52% of the stocks in my universe of 4,000 closed above their 10 week averages.  Only 32% of stocks remain in a short term up trend. The percentage of stocks within 5% of a new high fell to 22%.  Wednesday was the second day of the QQQQ short term down trend (D-2)………..

Seven of the 63 new lows on Wednesday were housing stocks and seven were radio or TV broadcasting stocks.  Maybe these sectors are a good place to search for shorts.

Please send your comments to:  silentknight@wishingwealthblog.com.

GMI: +4; Massive deterioration; More new lows than highs; Small caps falter

The GMI fell to +4 as my market indicators seriously weakened.  There were 49 yearly highs and 65 new lows in my universe of 4,000 stocks on Tuesday.  When more stocks hit new lows than highs, it is often a very ominous sign for the market.  Gmi0307 Less than one half of the stocks that hit a new high 10 days ago closed higher on Tuesday than they did 10 days earlier. Only 4% of the stocks that doubled in the past year hit a new high on Tuesday.  Only 37% of stocks remain in a short term up trend, and only 18% are in a sustained rise.  Only 54% of stocks closed above their 10 week averages.  The GMI-S fell to 50, with the IJR index(small cap) indicators showing the largest weakness.  Only one of the four short term indicators of the IJR remain positive. Only one half of the indicators for the SPY, DIA and QQQQ remain positive.  Tuesday was day one (D-1) of the new QQQQ down trend.    The continued weakness in the two market leaders (GOOG and AAPL) has been a good predictor of market weakness.  I am becoming defensive and raising cash and/or going short, focusing on the housing and interest rate related stocks….

Please send your comments to:  silentknight@wishingwealthblog.com.

GMI:+6; QQQQ weakens

The GMI remains at +6 but the Daily QQQQ Index is close to turning negative again.  Gmi0306 There were only 170 new highs in my universe of 4,000 stocks and 54 new lows.  The last time we had more new lows was on December 21.  Only 44% of stocks remain in a short term up trend.  Only 20% of the Nasda 100 stocks rose on Monday, along with 22% of the S&P 500 stocks and 27% of the Dow 30 stocks.  This was the third day in the QQQQ short term up trend (U-3).  One more down day will change the trend to down………….

Please send your comments to:  silentknight@wishingwealthblog.com.