GMI: +4; Market turning–into equities

I suggested yesterday that the market seemed like it could reverse in this sea of gloom.  The QQQQ did break above its 30 day average on Monday and closed there.  Gmi1024 Moreover, 61% of the stocks that hit a new high 10 days ago closed higher on Monday than they did 10 days earlier.  While this was far from the 100 successful 10 day new highs I would like to see for this index to count as positive, it would be impossible for this indicator to turn positive for some time if I required 100 succcessful 10 day new highs.  This is because, before Monday,  there has not been a day with 100 new highs since October 4.  There were 112 new yearly highs in my universe of 4,000 stocks, and 48 new lows.  This was the first day since October 4, that there have been more new highs than new lows.  86% of the Nasdaq 100 stocks rose, along with 91% of the S&P 500 stocks and 93% of the Dow 30 stocks.  These are the strongest readings since September 6.  34% of the stocks in my universe closed above their 10 week averages, and 61% of the Nasdaq 100 stocks closed above their 30 day averages.  64% of the stocks that have doubled in the past year closed above their 30 day averages.  And there are now more stocks within 5% of their 52 week high (14%) than their 52 week low (11%).  In short, this market has strengthened considerably and I am moving from cash into equities.  Monday was the first day in the new QQQQ up-trend (U-1).

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GMI: +1; Stronger QQQQ–weak Dow, Too much gloom

The GMI is still at +1.  Gmi1021_2  But there were some signs of strength last week.  On Friday, 68% (19/28) of the stocks that hit a new high 10 days ago closed higher than they closed 10 days earlier.  Still, this represented only 19 successful 10 day highs.  There were 60 new highs on Friday and 96 new lows.  More than one half (51%) of the 183 stocks that doubled in the past year closed above their 30 day averages, indicating support for the strongest stocks.  And 42% of the Nasdaq 100 stocks closed above their 30 day averages, up from 21% on October 12.  9% of the stocks in my universe of 4,000 stocks are now within 5% of their yearly highs.

The greater strength in the Nasdaq 100 stocks is also apparent in this week’s WPM.  Wpm1021 The QQQQ (the Nasdaq 100 ETF) is the only index of 5 that is still above its 30 week average.  Moreover, 42% of its components stocks are above their 30 day averages, and 47% are above their 30 week averages.  The QQQQ stocks are therefore showing both short and longer term support.  In contrast, the Dow stocks are the weakest group and may lag the market in the next rally. Don’t judge the market by the Dow 30’s action.

Last week, Mark Hulbert published an article stating that the investment newsletter writers’ sentiment is extremely bearish.  In the past, such readings were found at market bottoms.   There are just too many bears for comfort, and we are entering the end of year period when the market tends to rally.  In the past, when I became so frustrated with losses that I abandoned the market (like the present), the market often turned.  Thus, in spite of the GMI ‘s being stuck at +1, I am looking to buy promising Nasdaq type stocks, especially if the QQQQ reclaims its 30 day average tomorrow.  Among the stocks that my scan for strong stocks came up with are:  PSYS, WCC, SMTS, KNDL, NDAQ, URBN and VIVO.

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GMI: +1; Market insanity…

Gmi1020My market indicators weakened Thursday, but remained above Tuesday’s lows.   This has been a good time to be off the roller-coaster. Are we at the point when one stock (GOOG) determines the fate of the market?   Market insanity prevails.

The GMI is still at +1. One third of the QQQQ stocks rose on Thursday, along with 17% of the S&P 500 and Dow 30 stocks.   There were 66 new yearly highs and 135 new lows in my universe of 4,000 stocks.   Thursday was day 12 (D-12) in the current QQQQ down-trend.   Fasten your seat-belts Friday.

GMI: +1; Real turn or dead cat bounce?

My market indicators showed a lot of improvement today, but the GMI is still at +1 and the indexes are still well below their moving averages.  Gmi1019 Between 80-85% of the Nasdaq 100, S&P 500 and Dow 30 stocks advanced on Wednesday, the most since September 6.  There were 51 yearly highs, the most since October 4 (300 highs), but there were 219 new lows.  The percentage of stocks in a short term up-trend rose 2, to 10% and the percentage above their 10 week averages rose 10, to 30%.  40% of the Nasdaq 100 stocks are above their 30 day averages, up from 24% on Wednesday.  Almost as many stocks are now within 5% of their yearly highs as lows (11% vs 13%). 

These signs of strength are promising, but not enough to get me to move my cash into stocks.  The GMI needs to move up before I am willing to wade back into this market.

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GMI: +1; Only 8% of stocks in short term up-trend; 100% in cash

The GMI remains at +1, and there were only minor changes in my indicators on Tuesday.  Gmi1018 Between 20-24% of the stocks in the Nasdaq 100, S&P 500 and Dow 30 indexes advanced.  There were 40 new highs and 141 new lows in my universe of 4,000 stocks.  There were only 31 successful 10 day new highs-stocks that hit a new high 10 days ago and that closed higher Tuesday than 10 days earlier.  Only 8% of stocks are in short term up-trends.  16% of stocks are within 5% of hitting new lows, compared to 7% that are near their new highs.  Tuesday was the tenth day (D-10) in the QQQQ decline.  I am 100% in cash.

Please send me your feedback at: silentknight@wishingwealthblog.com.