IBD

GMI: +1; Too early to tell; 6 IBD 100 new highs

@ 8:14 am

The GMI rose to +1, but it is too early to tell if this reversal will hold. Two other indicators are too close to call (?).  Next week should provide more clarity, after end of quarter window dressing is over and new earnings are anticipated.  96-100% of stocks in the QQQQ, SPY and DIA indexes rose on Thursday.  There were 96 new highs and 48 new lows in my universe of nearly 4,000 stocks.  Gmi0629 There were 6 new highs in the IBD 100 list from 5/15:  GRMN, EXPD, LVS, CLDN, LIFC, OII.  If this turn is for real, these stocks may be among the new leaders.

Please send your comments to:  silentknight@wishingwealthblog.com.

GMI:0; 5 Rockets, 433 Submarines; Watch your cash balances

@ 12:01 am

The GMI is still zero.  Between 10-13% of the stocks in the Nasdaq 100, S&P 500 and Dow 30 indexes rose on Tuesday.  There were 28 new highs and 149 new lows in my universe of nearly 4,000 stocks.  Gmi0627_1 None of the GMI-S (short term) indicators are now positive.  A scan of my universe of stocks yielded 5 Rockets and 433 Submarines.  Thus, finding good shorts is 80x more likely than finding possible longs.  Tuesday was the 33rd day in the QQQQ down-trend. The IBD 100 stocks did as badly as my universe of stocks.  Ibd0627 There were only 2 highs among the IBD 100 stocks listed on 5/15.  Only 16 of them closed higher on Tuesday than where they closed on 5/15 when the list was published….. 

This is a good time to be short or in cash.  As I noted a few weeks ago,make sure your cash balances are swept into a high yielding money market fund.  Fidelity brokerage IRA accounts automatically are swept into the Cash Reserves fund paying almost 5%, but many of the other deep discount brokers pay their customers minimal interest while they invest your funds at much higher interest rates for themselves.  I have been told that some of these brokers will let you manually transfer your funds to a better paying fund, if you are smart enough to ask for it…..

Please send your comments to:  silentknight@wishingwealthblog.com.

GMI: 0; 3 IBD 100 new highs; New ETF’s to short indexes–a bullish sign?

@ 8:03 am

The GMI remains at zero, but there were almost enough successful  new highs from 10 days ago (9/15= 60%) to turn this indicator positive.  While I typically call this index positive when 50% or more of the stocks that hit a new high 10 days ago close higher then they did 10 days ago, the numbers here are too small to do so. If it is above 50% again tomorrow, I will make the indicator positive.  Gmi0626 There were 36 new highs and 95 new lows in my universe of nearly 4,000 stocks.  65% of the Nasdaq 100 stocks advanced on Monday, along with 74% of the S&P 500 and 80% of the Dow 30 stocks. Monday was the 32nd day of the current QQQQ down-trend. 14% of the stocks in my universe are in an up-trend, compared with just 9% at the lows last week.  So stocks are getting stronger.

The IBD 100 growth stocks from 5/15 now look as strong as the stocks in my universe.  This contrasts with the way they acted during the recent decline, when they greatly underperformed other stocks.  Traders and funds were clearly unloading the premier growth stocks in the IBD 100 list.  Ibd0626Three IBD 100 stocks did hit a new high on Monday:  XPRSA, CLDN, OII.  Any of the IBD 100 stocks that could survive the decline of the past month and go on quickly to hit a new high is a stock worth watching.  69% of the IBD 100 stocks from 5/15 have a MACD above their signal lines, indicating growing strength.   Still, note that only 18 of these 100 stocks closed higher on Tuesday than they did on 5/15 when this list was published by IBD…….

There are now new ways for an investor/trader to short the major market indexes in an IRA without buying put options.  Inverse ETF’s have been born.  They move in the opposite direction of the indexes they track.  So, to short the Nasdaq 100 (QQQQ) index, one can buy  PSQ.  Other inverse ETF’s include:  SH (S&P 500); DOW 30 (DOG) MYY (S&P 400 midcap).  These ETF’s are thinly traded and should be researched carefully before buying. 

Maybe the dawn of a new set of inverse ETF’s is a bullish sign.  Typically, not long after investors are so interested in a sector that a relevant new ETF is issued, that sector is close to a top–check out XHB, GLD and SLV for recent examples.  Too many people may be interested in shorting the major indexes??!!  A new contrary indicator?

Please send your comments to:  silentknight@wishingwealthblog.com.