GMI: +6; QQQQ still stronger; watching for a QQQQ break out

The GMI remains at +6.  There was minor deterioration in some indicators.  However, the Nasdaq 100 stocks still appear to be stronger than the other large cap stocks.  Gmi0330_1 59% of the Nasdaq 100 stocks rose on Thursday, compared with 32% of the S&P 500 stocks and 23% of the Dow 30 stocks.  The QQQQ did trade above its channel line on Friday (see yesterday’s chart) but  failed to close above it.  I am closely watching for a high volume close of the QQQQ above the channel line, around 42.11.  I would then consider buying the QQQQ’s.

Gert:  Please get well soon; we miss you.

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

An epiphany on moving averages and trend lines; IJR; GMI: +6; tech’s turn?

I’m back after a vacation.  Well, it was more than a vacation.  I have been burnt out on this market.  Nothing I have done worked and my account has gone nowhere. The March IBD meetup had only four persons, including myself.  All of us were complaining about the difficulty we are having trying to trade this market.  And then I had an epiphany.  I realized that moving averages are useless for providing signals in a trendless market.  Take a look at this chart of the QQQQ.  Qqqq0329 It is clear to me that, except for the false breakout in January, the QQQQ has been in a flat channel.  This index has gone nowhere since last November.  Why should we expect to have made any money trading tech stocks in this period?  Notice that during this time the index has gone back and forth over the 30 day (red) and 50 day (green) moving averages.  Thus, the averages and the GMI have been giving erratic, contradictory signals.  The QQQQ had a nice rise on Wednesday but I will believe this rally is for real only if the index closes above the upper channel line (around 42.10) on higher volume soon.  If it bounces off the line, I will expect a decline back to the area around 40.19. 

I have a renewed sense of respect for the value of trend lines. Look at the nice up trend in the IJR small cap index.  Ijr0329 This index has been rising since early October.  In contrast to the QQQQ stocks, traders in small cap stocks probably made money in this period.  Why do trend lines work?  I guess because so many people think they work.  Why should I care to understand the reasons, so long as the lines help me to predict probable levels of support and resistance.

The GMI remains at +6.  There were 231 successful 10 day new highs (stocks that hit a new high 10 days ago and closed higher Wednesday than they did 10 days earlier) in my universe of 4,000 stocks.  Gmi0329   There were 373 new 52 week highs and only 16 new lows.  86% of the Nasdaq 100 stocks rose, along with 78% of the S&P 500 stocks and 77% of the Dow 30 stocks. More than one half (51%) of stocks are in a short term up trend and 65% are in a longer term up trend.  The GMI-L (longer term) remains at the maximum reading of 100.  The GMI-S is at 75.  The QQQQ and IJR appear to be stronger than the DIA and SPY indexes. 39% of all stocks are within 5% of a new high.  It looks to me like the forgotten tech stocks may be about to join the bulls’ party……

Gert:  Please get well soon; we miss you.

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

GMI:+6; breakout stocks doing well

The GMI remains at a maximum +6.  There were 503 new 52 week highs in my universe of 4,000 stocks on Thursday, the most since late January.  However, only 33% of the Nasdaq 100 stocks advanced, less then the 58% of the S&P 500 stocks and 63% of the Dow 30 stocks.  Gmi0316 The Nasdaq 100 is in its third day (U-3) of the new short term up-trend.  41% of stocks are in a short term up trend and 65% closed above their 10 week averages. Meanwhile, many of the break out stocks I mentioned yesterday have done well……

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

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.