I was away all weekend and this post will therefore be short. No changes in any of my indicators. We remain in a down-trend and the safest place to be is on the sidelines in cash or a little short. There were 2 new highs (EBS and DRS) and 155 new lows in my universe of 4,000 stocks on Friday. Buying stocks at new highs is unlikely to be profitable right now. On the other hand, 822 (96%) of the 854 stocks that hit a new low 10 days ago closed lower on Friday than they closed 10 days ago. Thus, shorting stocks at new lows 10 days ago was likely to have been profitable. When considerable numbers of stocks that hit new highs keep advancing I will go back to buying IBD100 type growth stocks again.
IBD
GMI: 1; GMI-R: 1; 13th day of QQQQ down-trend; IBD100 new highs
The GMI and GMI-R rose to one each. This is because there were more than 100 new highs (136) in my universe of 4,000 stocks on Thursday. Almost all were banks. However, some stocks on the IBD100 lists the past year that hit a new high on Thursday are: SF, CNQR, BKE, KNDL, SRCL, BCPC, WST, ASEI, WBSN. This may be where to find the new leaders if a new up-trend materializes. There were also 803 new lows on Thursday. The market remains very volatile, given the impending government interventions. Still, the trend is down. I remain mainly in cash.
GMI: 3; GMI-R: 5; 12th day of QQQQ up-trend; still cautious
One of my readers questioned my last post. How can I be in cash or short when the QQQQ is in an up-trend, now in its 12th day? Well, for one thing, many of the stocks with break-outs have been failing. Also, one of the GMI components measures whether the IBD growth mutual fund index is above its 50 day average. Well, this index has been below its 50 day average since mid-June, and I have never consistently made money trading growth stocks when this indicator is negative. Finally, instead of having the 100 new highs each day that are required by the GMI, we have been having only 10-14 the past few days. If only 14 stocks out of 4,000 can hit a new high each day, then it is unlikely that stocks are strong. So, the QQQQ remains in an up-trend, but I am unwilling to trade the QLD right now. I think it better to stay in cash for now. If the QQQQ up-trend strengthens, I may wade in again.