Thanks to all of you who sent me comments about yesterdays post. My market indicators remain the same as I described them yesterday. The seven IBD100 stocks hitting new highs on Monday are: LPHI,MYGN,BKR,SXCI,EMS,AVAV,AMSF. (I own some of these.)
IBD
I’m up 1200%, as my fellow boomers and college students get screwed again; QQQQ in 17th day of short term up-trend; GMI: 2; GMI-R: 6; T2108: 83%; 10 IBD100 stocks at new highs
I escaped 2008 with a small loss in my account (-5%). Not bad, compared to how the indexes did (down 35-40%), but not great, given that I did trade some short positions (with puts) during the year. On December 24, IBD published a table listing the performance of the best growth mutual funds since April, 1994. The top fund was up +382% since 1994. My IRA account remains up a little more than 1200% (13x) since late 1994, so I do not feel that bad about my performance this year. The key to my success is that I made money during the strong market rises and kept it, by being mainly out of the market during the major declines. I might add that while I traded in my IRA during the huge declines in 2000-2002 and 2008, I avoided major losses in my university pension plan by transferring from mutual funds into a money market fund during these declines. So, I have learned the painful lesson over my 40+ years of trading that the key to success is conservation of capital during the inevitable market down-trends. These declines can be detected long before they reach the panic phase when they become evident to everyone. I have developed rules for identifying the market’s trend early, that I post each market day in this blog, in the form of the GMI and GMI-R…..
IBD100 stocks at new highs; GMI: 2; GMI-R: 6; T2108: 72%
The markets showed some life on the last days of trading for 2008.
The GMI remains at 2 (of 6), but the more sensitive GMI-R is now a 6 (of 10). The last time the GMI-R was at 6 was on August 28. And the Worden T2108 indicator is now at 72%, not far from the 80% level where advances tend to end. The last time the T2108 was this high was last May, before the start of the summer swoon. However, in June of 2003 when the market took off after the 2002 bottom, the T2108 did get up to 92+ during the first market rebound. So this rise could have more to go. Meanwhile, there were more new highs than lows (26 vs. 24) in my universe of 4,000 stocks on Wednesday. The last time new highs exceeded new lows was September 2nd, just before the market fell off of a cliff. The QQQQ completed the 16th day of its current short term up-trend on Wednesday. So, the market technicals have strengthened considerably. I am ready to nibble a little, but would prefer a GMI over 3 to really wade in…..