GMI: +1; Back in reverse; conserve capital

The QQQQ could not hold its 30 day average and the markets are back in a decline.  The GMI fell to +1, with only 46 new highs and few successful 10 day new highs, Thursday. Gmi1027 Only 7% of the Nasdaq 100 stocks, 14% of the S&P 500 and 17% of the Dow 30 stocks advanced on Thursday.  This was the weakest showing since October 5, when the QQQQ began a decline and the GMI registered 1.  The percentage of stocks closing above their 10 week averages fell 7, to 26%.  Only 43% (-17) of this year’s doublers now remain above their 30 day averages.  There were 46 new highs and 199 new lows in my universe of 4,000 stocks. Twice as many stocks are now within 5% of their yearly lows than highs (18% vs. 8%). Thursday was the first day in a new QQQQ decline (D-1).  The next big test is whether the QQQQ can hold the bottom of the last decline, around 37.33.  These are the markets that try traders’ souls.  The key is to conserve capital until the market develops a solid trend to trade.

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