GMI:+6; GMI-L:100; GMI-S: 88; some stocks breaking out from bases

The indexes are finally in synch and in up trends.  The GMI is +6 and both the GMI-L and GMI-S are strong.  Gmi0315 There were 376 new highs in my universe of 4,000 stocks on Wednesday and 38% of stocks are now in a short term up trend.  66% of the Nasdaq 100 stocks closed Wednesday above their 30 day averages.  Many stocks are breaking out of bases on huge volume increases.  Wednesday was the second day (U-2) of the new QQQQ short term up trend. 36% of stocks are within 5% of their yearly highs.  Among the stocks that appear to have broken out of bases on high volume this week are:  AZR, WCN, DEO, DXCM, VTIV (I own this), DXPE, ITW, AVTR, RIMM, STN, MHP, NTES, VNO, DPZ, MAN, and XNPT.  CMG, a recent spin off of MCD, also looks strong (I own it, based on my son’s opinion that Chipotle’s food is great, and the recent turnaround in earnings.) Of course, the fundamentals of all of these stocks need to be researched to see if they are as good as the technicals……………..

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

GMI: +6; VTIV- cup with handle?

The GMI cllimbed to a maximum +6 on Tuesday as the QQQQ regained strength.  It looks like we may not get a head and shoulders top in that index.  Gmi0314 There were 250 new 52 week highs and 62% of stocks closed above their 10 week averages.  33% of the 4,000 stocks in my universe are now in a short term up trend and 33% are within 5% of a new high.  Between 83-88% of the stocks in the Nasdaq 100, S&P 500 and Dow 30 indexes climbed on Tuesday.  Tuesday was the first day in the new short term up trend in the QQQQ……..

One of the more reliable technical patterns for growth stocks is the cup with handle pattern made famous by William O’Neil, publisher of IBD.  A few weeks ago I bought AX (now NYX) on a cup with handle break out.  Well today I bought VTIV because it also looks like a cup with handle break out.  Vtiv_2 Note the prior up trend before the cup was formed,  and the huge volume this week as the pivot point at the top of the handle was exceeded.  VTIV had a recent quarterly increase in earnings of + 157% and a PE around 16.  Given this technical pattern and the great fundamentals, I thought it was worth taking a chance on VTIV.  Time will tell if this represents a major buying opportunity.

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

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.