The GMI and GMI-R remain at zero. Only 63 new highs and 285 new lows in my universe of 4,000 stocks on Friday. Friday was the 6th day in the QQQQ short term down-trend. Cramer thinks we have hit bottom–time will tell. Only 17% of the Nasdaq 100 stocks closed above their 30 day averages. The Worden T2108 indicator is at 36%. I remain mainly in cash.
Jim Cramer
GMI: 0; 8 new highs and 556 new lows; Shame on Cramer
The GMI remains at zero and there were 556 new lows and 8 new highs in my universe of 4,000 stocks. The market was in a free-fall Thursday and it looks like a bounce is here. Cramer and all of the pundits keep telling viewers how to keep their money at work. Everyone has that special stock that will buck the trend. But since the QQQQ topped on July 19, it has fallen 9.7% and 89% of the 412 IBD100 stocks I monitor declined, along with 88% of the Nasdaq 100 stocks and 95% of the S&P 500 stocks. With odds like these, why try to pick the few stocks that will rise. Instead, I go to cash and earn interest and/or buy puts or the ultra inverse ETFs. Cramer was disingenuous Thursday night when he said that persons who went to cash in 1987 or 1998 would have lost thousands of Dow point rises in the following bull markets. Does he really think that a person who sold out in 1987 or 1998 would have stayed out of all of the subsequent market rises???????? Shame on Cramer and all of the pundits who advise people to ride these storms out. There is nothing like being on the sidelines during declines like this. I prefer to wait for the all-clear (from the GMI) before jumping on the next meaningful up-trend.
See my disclaimers below.
GMI: 2; GMI-S: 25; In cash or short
The GMI is now at 2, and there is no reason to fight the down-trend. I hope you got out when I did when the GMI weakened on Tuesday and Wednesday. 
There were 513 new 52 week lows in my universe of 4,000 stocks on Thursday, the most since I began posting in May, 2005. There were only 46 new highs. This is not a market to be long in. The Worden T2108 indicator is now at 19. Extreme readings at bottoms in 2001 and 2002 have been as low as 7. So we could go lower, but we are in a level where bottoms occurred in 2004-2006. The thing that bothers me is the brutal selling in financials, homebuilding real estate and retail. It looks like the market is predicting a major down-turn in consumer spending and a financial meltdown…..
Cramer’s four tech horsemen (AAPL, AMZN, GOOG and RIMM) held up on Thursday. He thinks one should still buy tech stocks. However, the bear gets to everyone and it is likely this decline will not end until these stocks cave in too. If I have learned anything the past 40 years, it is that most stocks follow the market averages and it does not pay to be long in anything in a market down-trend. Keep in mind, however, that according to my indicators, the QQQQ (the Nasdaq 100 tech stocks) is still in an up-trend, even though the Nasdaq composite (that also includes financial stocks) is in a down-trend. It is time for me to be short or in cash, even though we may get a bounce soon.
See my disclaimers below.