The WW-GMI hit 4+ today. The IBD Mutual Fund Index finally closed above its 50 day moving average, indicating that growth mutual funds are climbing. The Weekly QQQQ Index is borderline positive. There were 86 successful 10 day new highs. (See 4/26 post for elements of the GMI) In fact more than 80% of the 106 stocks that hit new highs 10 days ago closed higher today than 10 days ago. There were also 157 new highs today and only 31 new lows. Seventy percent of the NASDAQ 100 stocks rose today, 62% of the S&P500 stocks and 60% of the Dow 30 stocks. This market rally is firing on all cylinders.
Last week I transferred all of my 401-k funds from money market funds to equity funds. Over the past 7 years I have succeeded in avoiding all serious market declines by being in cash. There is no necessity to take a buy and hold approach with company 401-k plans. Most fund families allow you to switch funds a limited number of times. In October, 2000, I sold out my growth funds around 103 and watched them drop to below 40. I hope my timing is correct this time.
Even though I think the trend is up, I religiously place sell stops below every purchase. We can never take the market for granted. This weekend I will return to strategy. Next Wednesday is the IBD meetup.
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Please remember that the stock market is a risky place, especially now. I am not providing recommendations for you to follow. My goal is to share tools and methods that I have used over the past 40 years of trading, so that you may learn from them and adapt them to your trading style and needs. While I do my best, I do not guarantee the accuracy of any statistics computed or any resources linked to my blog. Please consult with your financial adviser and a mental health practitioner before you enter the stock market, and please do not take unaffordable risks in the current market environment. See the About section for more statements designed to protect you (and me) as you navigate this market. Past performance does not guarantee future results, but I would rather learn from a former winner than a loser.