IBD

Jon Stewart: media pundits failed us–but I wrote last June that banks and markets looked sick

@ 11:33 pm
GMI0/6
GMI-R2/10
T210822%

It’s is great that Jon Stewart informed the world last week that the media pundits at CNBC   failed to provide accurate information about the impending financial crisis.   But by using technical analysis, I warned my readers last June what the charts were telling me and transferred my pension money   out of mutual funds to money market funds:

“Look at this weekly chart of   Bank of America (red line= 30week average; click on chart to enlarge). Other bank stocks with similar charts include : WB, UBS, STI, and DB.   When major bank stocks are in a free-fall, can the rest of the market be far behind?” (Posted on June 8, 2008)

The media pundits and the financial advisers are self-serving when they try to convince us that we need their wise counsel.   I say that one can rely on the market itself to alert us to danger. I use the TC2007 charting program to analyze the market trend and post my conclusions on this blog.   I know a lot of you have used my blog to protect yourselves….

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How I use put options as investment insurance

@ 8:01 pm
GMI0/6
GMI-R0/10
T21087%

There were 7 new highs and 1,221 new lows in my universe of 4,000 stocks on Friday.   The QQQQ completed the 14th day of its short term down-trend within a longer term down-trend. I heard on Fast Money that the AAII survey has the most bearish reading ever.   Furthermore, the momentum indicator in IBD for the Nasdaq 100 index futures is below 25%, the place from which   rallies tend to begin.   And with the T2108 at 7%, in deeply oversold territory, I am becoming reluctant to add more shorts right now.

Last week, a person who knows nothing about the market asked me how to short stocks.   This is reminiscent of the   stories of the shoeshine boys providing stock tips, near the roaring 20’s market’s top.   The sentiment is just too negative right now.   Does this mean the market has to turn up?  

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Jim Cramer finds (TA) religion; TSYS: cup with handle breakout? Indexes are weak, but some promising IBD100 stocks appear

@ 9:39 am
GMI1/6
GMI-R4/10
T210840%

I know that the GMI has kept me and, I hope others, out of the long side of this market since at least August 2008, the last time that the GMI was 4.   I prefer the GMI to be at least 4 before I commit many IRA funds, and especially my university pension,   to the long side.   Since the GMI fell below 4 in late August, the QQQQ (Nasdaq100) and SPY(S&P 500) have declined 35%, and the DIA (Dow 30), by 31%.   During that same time period, 95% of the Nasdaq 100 stocks declined, 36% have declined more than 40%.   The biggest losers in the Nasdaq100 component stocks includes such well respected stocks as: RIMM, ISRG, and DELL (each down 63%), and JOYG (-69%)   and WYNN (-72%). As to   the “safe, buy and hold” Dow 30 stocks; 100% declined in this period, with whopping declines in: AXP (-58%), GE (-60%), GM (-75%), AA (-76%), C (-80%) and BAC (-81%).   Do you see why it does not make sense to fight the general market’s trend, as reflected in the GMI!

Speaking of the GMI, the table below shows

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