GMI: +2; GMI-S: 19; Leaders crushed

The market weakened again with the GMI now falling to +2.  I do not have tomorrow’s IBD yet.  If the IBD Mutual Fund Index is below its 50 day average, then we are really at +1.  The GMI-S fell to 19, with the DIA being the strongest of the indexes.  Gmi0213 Only 29% of the Nasdaq 100 stocks rose on Monday, along with 34% of the S&P 500 stocks and 40% of the Dow 30 stocks.  HON, HPQ and T are among the strongest Dow stocks.  There were only 87 new highs in my universe of 4,000 stocks and 84 successful 10 day new highs.  Only 31% of stocks are in a short term up trend.  Monday was the seventh day in the QQQQ short term down trend……….

Since its peak on January 10, the QQQQ has declined 5.6% and 60% of the Nasdaq 100 stocks have declined.  During this period the leaders have been crushed.  The biggest declines, in order were:  GOOG (-26%), YHOO (-25%), SNDK (-23%), ISRG (-21%), AAPL (-20%), INTC (-19%), WFMI (-18%), AMZN (-17%).  Most of these stocks are the IBD type of growth stocks that rocketed in a strong market.  The carnage sustained by these stocks does not bode well for the market. The leaders tend to be slaughtered first in a general market decline.

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

GMI: +4, GMI-S: 25; Small caps weaken; on side lines

The GMI barely held +4 on Friday.  A weak day on Monday could reduce it to 2. The IBD Mutual Fund Index is declining and approaching its 50 day average, suggesting that growth fund managers are having trouble making money in this market environment. The GMI-S is at 25, indicating that only 4 of 16 short term indicators for the DIA, QQQQ, SPY and IJR are positive.  Even the small cap stocks are weakening (see WPM below).  Gmi0210 Only 30% of the 630 stocks that hit a new high ten days ago closed higher Friday than they closed ten days before.  Buying new highs has not been profitable. There were only 100 new highs in my universe of 4,000 stocks.  Only 36% of stocks are in a short term up trend and only 6% of stocks that doubled in the past year hit a new high on Friday.  64% of the Nasdaq 100 stocks advanced on Friday, along with 59% of the S&P 500 stocks and 70%  of the Dow 30 stocks.  Friday was the sixth day (D-6) in the current short term down trend on the QQQQ…….

I added a new indicator to the table tonight.  Stocks that are in a strong advance tend to close above their 10 day moving average for some time.  This new indicator shows the percentage of stocks that have closed above their 10 day average for the past four days.  19% of the stocks in my universe did so on Friday.  We will watch to see whether this turns out to be a sensitive indicator of the strength of the market….

The WPM showed interesting divergences in the five market indexes last week.  The small and mid cap stocks weakened, even as the DIA, QQQQ and SPY remained stable or strengthened.  Wpm0210 The DIA is now above its 30 day average.  But there were declines in the percentage of the MDY and IJR component stocks that closed above their 30 day averages. And while all five indexes closed above their 30 week averages, there were declines in the percentage of the  components of the MDY and IJR  that closed above their 30 week averages.  This weakening in the strength of the mid and small cap stocks is a startling departure from the recent past and warrants further attention…

The markets remain in a short term down trend.  It makes no sense to fight the market’s trend.  Continued weakness this week will bring about a significant decline in the GMI, and may be the beginning of a serious longer term decline.  This remains a good time to be on the side lines, in cash, in my trading account……

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

GMI: +4; Stocks in short term up trend: 39%

The GMI is still at +4, but the percentage of stocks in a short term up trend continues to decline.  As of Thursday’s close only 39% of the 4,000 stocks in my universe remained in a short term up trend.  This percentage last peaked at 66% on January 17, after bottoming out on December 30 at 28%.  Gmi0209 There were 209 yearly highs on Thursday and 69% of the Nasdaq 100 and S&P 500 stocks advanced.  The Dow 30 did better, with 80% advancing. The GMI-S is at 38.  Thursday was the fifth day of this QQQQ short term down trend (D-5).  I remain mainly in cash in my trading account.

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

 

GMI: +4; Little change in indicators; Bull discovers CSCO

The GMI is stable at +4 and there were few changes in my indicators on Wednesday.  In spite of the Dow’s 100 point rise, there were 11 fewer yearly new highs than on Tuesday (120 vs. 131).  The percentage of stocks in a short term up trend declined to 46%. Gmi0208_1  However, the most stocks advanced in the past 10 days.  69% of the Nasdaq 100 stocks rose, along with 69% of the S&P 500 stocks and 80% of the Dow 30 stocks.  Only 13% of the stocks that have doubled in the past year hit a new high on Wednesday.  The GMI-S rose a little to 25.  Wednesday was the fourth day (D-4) in the current short term down trend in the QQQQ.

The leaders, GOOG and AAPL,  continue to look sick.  I have to wonder whether when this bull finally turns its attention to CSCO, the up cycle is near the end of the line.  Please send your comments to:  silentknight@wishingwealthblog.com.

GMI: +4; GMI-S: 19; Down trend continues

The GMI held at +4, but the GMI-S fell to 19.  All four short term indicators for the DIA, QQQQ and SPY are now negative.  Even the indicators for the IJR began to weaken.  The continued weakness in the leaders is a sign of weakness to come throughout the markets.  Gmi0207 Only 39% of the Nasdaq 100 stocks rose on Tuesday, along with 28% of the S&P 500 stocks and 30% of the Dow 30 stocks.  Only 49% of stocks are in a short term up trend.  There were 131 yearly highs in my universe of 4,000 stocks.  Only 50% of the 333 stocks that hit a new high ten days ago closed higher on Tuesday than they did ten days before.  Buying stocks at new highs has therefore been profitable only about one half the time.  Only 10% of the stocks that have doubled the past year hit a new high on Tuesday.  The percentage of stocks within 5% of a yearly high has fallen to 25%.  Currently the odds are against being long stocks.  Cash is king.

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