The GMI remains at a maximum reading of +6. In spite of the weakness of the indexes on Friday, there were still 258 new highs in my universe of 4,000 stocks. However, only 30-37% of the Nasdaq 100, S&P 500 and Dow 30 stocks advanced on Friday. Still, 48% of all stocks are in a short term up trend and 66% are in a longer term up trend. The GMI-L is a maximum 100, indicating that the four indexes are in up trends. However, the small cap stock index (IJR) and the QQQQ are in stronger short term up trends. The GMI-S is 75. 39% of stocks are within 5% of a new high and only 5% are near a new low.
The greater short term strength in the tech and small cap stocks is clearly evident in the WPM. While all five indexes are in short term up trends, only 50% of the Dow 30 stocks and 54% of the S&P 500 stocks closed above their 30 day averages. There has been considerable deterioration in the Dow stocks, down from 67% on March 10. All ifive ndexes and their component stocks are in longer term up trends. The weakening in the large cap stocks contrasts with the growing strength in the tech stocks. We may finally see the more speculative tech stocks taking off the next few weeks as first quarter earnings are released. In fact, this weekly chart of the QQQQ shows that this index closed above its 10 week average (dotted line) for the first time in ten weeks. I have found that I tend to make profitable trades as long as the QQQQ closes above its 10 week average. The QQQQ seems to have broken out of an ascending triangle and has just successfully tested support at the break out line. As long as the QQQQ remains above the ten week average, I will be willing to remain long in tech stocks.
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