The GMI remains at +2. While few stocks rose on Wednesday (18% of the Nasdaq 100, 17% of the S&P 500 and 7%of the Dow 30 stocks), my market readings are not as low as they were in June. There were 127 new lows in my universe of 4,000 stocks on Wednesday, compared with 292 on June 13 and 173 on June 28. The short term indicators measured by the GMI-S has now fallen to 44; the GMI-L is 31. 14% of stocks are within 5% of a new low and 12% are within 5% of a new high. Wednesday was the fifth day of the QQQQ down-trend (D-5) and the QQQQ has been below its 10 week average for nine weeks. I have found that I profit from owning growth stocks when the QQQQ remains above its 10 week average. In my opinion, anyone holding stocks in the current market should examine their strategy. The markets of 2000-2002 should have taught everyone the folly of a buy and hold strategy. Only 28% of the IBD 100 stocks from 5/15 and 33% of the 4,000 stocks in my universe closed higher on Wednesday than they did on 5/15. Since mid-May, the odds of success have been on the side of those who are in cash or short. That is the side I am on.
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