GMI: +1; Indicators strengthen; Still mainly in cash

The GMI rose to +1 because 58% of the stocks that hit a new high 10 days ago closed higher on Thursday than they did 10 days before.  For the first time in a while, buying new highs was likely to have been profitable. The other 5 indicators remain negative.  Gmi0601 The short term GMI-S rose to +25.  It is too soon to tell whether this  bounce will become a major up-trend.  88-92% of the stocks in the Nasdaq 100, S&P 500 and the Dow 30 rose on Thursday.  There were 81 new highs and 26 new lows in my stock universe. 16% of the stocks in my universe of 4,000 are within 5% of a new high, and only 9% are that close to a new low.Thursday was the fifteenth day (D-15) in the current QQQQ short term down-trend……..

The IBD 100 growth stocks did quite well on Thursday.  Ibd0601_184% rose and 85% closed higher then they opened.  81% closed above their 10 day averages.  Still only 8% hit a new high and only 40% of stocks are above their key 30 day average and only 12% are in a short term-up trend.  29% bounced above their 10 week average–a sign of possible support.  The longer term trend looks better for the IBD 100 stocks, with 89% closing above their 30 week averages…….

I am nibbling at  1-2 break-out stocks but with the GMI at +1, I remain mostly in cash and in a few puts.  Failure of this rally could lead to a significant decline.

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