IBD

Moving averages are flat; many education stocks strong

@ 9:51 pm
GMI0/6
GMI-R1/10
T210838%

The GMI-R climbed to one (of 10).   There were 9 new highs and 214 new lows in my universe of 4,000 stocks on Monday.   The last time we had over 200 new lows was on January 20th.   In contrast, the most daily new highs this year was 20, on January 2nd.   The QQQQ completed the 13th day of its current short term down-trend.   Nevertheless, the key moving averages are flat and have all converged.   At some point a new trend will break out.   Some stocks are looking strong.   Among the new highs today were two stocks on my IBD100 lists: ESI   and SXCI.   The strongest group I have found is the education and training services group:   APOL, CECO, COCO and ESI are doing incredibly well in this declining market.   During hard times, people go back to school.

All indicators negative; 12th day of QQQQ short term down-trend

@ 6:03 am
GMI0/6
GMI-R0/10
T210838%

All of my indicators have turned negative again and I am back to cash.   I have considered buying some QID, but with my short term moving averages being flat, I will probably get repeatedly whipsawed as the indexes move above and below their averages.   However, at some point a real tradable trend will develop. There were 3 new highs and 138 new lows in my universe of 4,000 stocks on Friday.   Only 30% of the Nasdaq 100 stocks closed above their 30 day averages and the QQQQ   just completed the 12th day of its short term down-trend.

One of the GMI’s components tracks the percentage of “successful” stocks that hit a new high 10 days ago that closed higher today than they closed 10 days ago.   It is a useful indicator to see if break-out stocks are continuing to advance.   This indicator has been negative since late October,   largely because we rarely saw the required 20 new highs in a day.   You can see this indicator is still negative in the GMI table below….

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GMI error: 3 since December 30; GMI-R: 4; QQQQ back near support

@ 10:27 am

One of the GMI and GMI-R components counts whether the IBD growth mutual fund index is above its 50 day average. My logic is that when these mutual funds are doing well, so will I be likely to, when I buy similar growth stocks. IBD no longer publishes the 50 day average for the mutual fund index, but the chart with the average is available on their website’s stock charting application (enter symbol: 0muti). GMI0109 I do not check this chart every day and missed its cross above the 50 day on December 30. Thus, the corrected GMI has been 3 since then. I am concerned, however, that its 50 day average is far below its 200 day average. While the GMI is 3 and the QQQQ short term up-trend competed its 22nd day on Friday, the QQQQ is just above support. The more sensitive GMI-R has also fallen to 4. So, I have close sell stops on all of my long stock positions and will get rid of QLD if the QQQQ starts a down-trend. In that case, I may buy some QID to profit from a decline. Options expire on Friday.