GMI: +6; Huge turnaround; short rates to rise? 38 leading stocks

The short term trend of the market has turned up and is now in synch with the longer term up trend.  The GMI is at +6.  there were an amazing 505 new yearly highs among the 4,000 stocks in my universe.  Gmi0106 The last time we had over 500 new highs was on July 28  (522 highs), just before the August 2nd top in the QQQQ.  At that time, however, 81% of stocks were above their 10 week averages, compared with 76% on Friday and 57% were in a short tern up trend compared with 49% on Friday.  Moreover, last July the QQQQ had been rallying for about a month, while the QQQQ short term trend just broke out again last week.  Friday was the second day of the new short term up trend (U-2).  The leaders have been very strong.  82% of the stocks that hit a new high ten days ago closed higher on Friday than they closed ten days earlier.  And 80% of the stocks that have doubled in the past year closed above their 30 day averages and 31% hit a new high on Friday.  Eight times as many stocks are within 5% of a new high than a new low (33% vs. 4%).  With this turnaround, the QQQQ has now closed above its 10 week average for nine consecutive weeks.

The WPM reflects this huge turnaround.  Wpm0106_1 All five indexes closed above their 30 day averages, and 61% or more of their respective component stocks have now closed  above their 30 day averages.  All indexes remain above their longer term 30 week averages, but many more of their stocks (60%- 77%) also closed above their 30 week averages.

A lot of this rally is said to be predicated on the hope that the Fed will soon stop raising interest rates.  I want to bring to your attention, however, the fact that speculators seems to be betting on higher rates. Irx0106 The short term interest rate indicator that we have posted a few times has again broken out to the up side.  Why is the smart money betting on still higher rates? This market could reverse down quickly if the hopes for a slowing Fed fail to materialize……..

So what are some of the leaders that are hitting new highs?  I found 38 stocks that hit a new high on Friday, that doubled in the past year and that had triple digit earnings gains the most recent quarter. Here they are: DO, AKAM, HSVLY, MSCC, ASTE, VTS, ATI, FCX, PDC, GOOG, GG, CRM, SPSS, TRID, AAPL, STMP, UBB, SUN, BOOM, ARD, TRAD, MDR, JOYG, FCL, VPI, SIRF, BTU, NVDA, PKS, ENG, ANST, CIG, WDC, KEP, AIR, TWIN, FLSH, ALY.  I own two of them.  If I were looking for future winners, I would check out this list of winners.

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1 thought on “GMI: +6; Huge turnaround; short rates to rise? 38 leading stocks”

  1. That short-term rate chart may be a potential red flag. Nice work!

    I’m watching my current long positions (among your list) carefully, and not initiating any new positions at this point. If this rally sticks, then I’ll buy on a pullback to support level on the indices.

    Very nice work you’ve done here.

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