GMI: 4; GMI-R: 8; 8th day of QQQQ short term up-trend; Nine IBD100 stocks at new highs

The GMI remains at 4 (of 6) and the GMI-R at 8 (of 10).  The QQQQ short term up-trend is in its 8th day.  The QQQQ has now closed above its 10 week average for 2 weeks.  I have found that buying the type of strong growth stocks that I like is most often profitable when the QQQQ stays above its 10 week average.  I am accumulating QLD and writing high premium April covered calls on strong IBD 100 stocks.  Over the past 40 years I have learned that the pundits label a market as bull or bear about six months after the turn.  I am therefore not surprised to be somewhat alone in pursuing the current up-trend.  No one can accurately predict how long this up-trend will last.  Nevertheless, it is important to jump on board until it shows signs of ending…

Meanwhile most of the stocks I have written about and own continue to be strong, including CPST, FDG and ITRI.   RICK is growing backwards. Nine of the stocks on the IBD 100 lists I have tracked over the past year hit new highs on Thursday:  NEU, IIVI, POT, TNE, GGB, WFT, X, RRC, CCH.  These stocks have come through a tough market to go to new highs.  These stocks may include some of the new market leaders if this up-trend continues.

GMI: 4; GMI-R: 8; CPST rocks; ITRI-another Judy’s pick; RSS feeds

The GMI is at 4 (of 6) and the GMI-R is 8 (of 10).  There were 63 new highs and 31 new lows in my universe of 4,000 stocks on Wednesday.  Wednesday was the 7th day of the new QQQQ up-trend.  With my general market indicators in positive territory it is time for me to accumulate stocks again.  I am buying QLD and selling covered calls on IBD100 growth stocks again.  I am getting 4-5% premiums for calls that have only 12 days to expiration….

Meanwhile, CPST, one of Judy’s picks, keeps hitting new highs on heavy volume and is up almost 14% since I wrote about it on March 28, at $2.09. CPST makes microturbines and appears to be  pulling in contracts from around the world.  As a rule, I do not buy cheap stocks, but I made an exception for CPST, based on its great chart and Judy’s advice. Judy had bought it around $1 per share.  Another Judy’s pick that showed some life on Wednesday is ITRI, which makes smart meters.  I automatically purchased some ITRI today when my buy stop was triggered around $97. By placing a good-til-cancelled buy stop at the level I think is indicative of a break-out, I can buy promising stocks without having to watch the market.  One does not need to be glued to a monitor to catch stocks breaking out of bases…

To my honors students taking part in the virtual trading competition–it is time to close out your shorts and go long. Pyramid up on margin as long as the QQQQ up-trend remains intact.

    

Notes from Mr. Wish (Dr. Wish’s  IT Guru son):
– RSS Feeds now display 10 articles as opposed to just two.  Feel free to add them to your blogs and web sites at will.  No permission needed.  All publicity is good publicity.
– RSS Feeds are now available through feedburner at this address: http://feeds.feedburner.com/typepad/wishingwealth  — If you don’t know what this is, you dont need to know what it is
– Finally, my blog is available on YOUR iGoogle home page.  There is a link about half way down, under "Recent Posts" where you can instantly get updates on my latest posts right to your iGoogle page.  If you don’t have an iGoogle page you SHOULD.  get one here: http://www.google.com/ig
– hope you like the new design = )

GMI: 3; GMI-R: 6; Day 2 of QQQQ up-trend; CPST–a Judy’s pick

The GMI is still 3 (of 6) but the GMI-R fell one, to 6 (of 10).  This is because there were  only 27 new highs and 28 new lows in my universe of 4,000 stocks on Wednesday.  The indicators in the GMI have kept me out of all major market declines since 1995,  including the bad markets of 2001-2002.  I then got back in the market in 2003  and my account was up over 50% that year.  I also avoided the decline that began last January, which lasted 55 days.  The new QQQQ short term up-trend is in its second day and I am beginning to wade into this market slowly by buying QLD and writing some covered calls.  If this up-trend should end quickly, I will get out and go immediately to cash again.  There is always time to catch a real up-trend that can last months……. 

The service that I use to scan stocks for writing covered calls is at www.poweropt.com. I like this service because I can narrow down my scan to include only IBD100 stocks.  The IBD100 stocks include the strongest stocks based on fundamentals and technical action as assessed by IBD.  I also eliminate stocks that will report earnings during the option period.  I was burned several times by writing covered calls on stocks that announced earnings and then plunged.  In a market up-trend writing calls on growth stocks with large premiums is the easiest and least stressful way I have ever made money in the market. Joseph Hooper’s book educated me about this new way to look at writing covered calls for income. While I do not follow his method of stocks selection and technical analysis, I do like his philosophy of writing near month covered calls for 3-5% income each month.  I do all of this trading in my IRA and do not have to worry about taxes.  Check it out…

My friend Judy, who is the best stock picker I have met, buys stocks based on concepts long before the technical action meets my requirements. Cpst
When she told me about this stock that she bought for about $1 per share, I told her I do not buy cheapies. But the stock has been rising, so I bought some around $2.09.  CPST makes microturbine engines and appears to be getting a lot of contracts.  If Judy likes a concept, it is good enough for me–as long as the chart looks good.  This weekly chart shows that CPST is now holding well above  its rising 10 week average (dotted line), which in turn is above its rising 30 week average (red line).  As long as the stock holds above this dotted line, now at 1.73, I will hold the stock.  This is not a recommendation, just an example of the chart pattern I look for and how I limit my risk.  By the way, most recent volume spikes are occurring on up weeks, suggesting strong buying. So, again, Judy buys at a price much lower than I do… 

Newdisclaimer