GMI:+2; D-1?; Staying in cash

The GMI fell to +2, with the initiation of a possible new short term down trend in the QQQQ.  Gmi0706 48% of the Nasdaq 100 stocks rose on Thursday, along with 54% of the S&P 500 and 63% of the Dow 30 stocks. However, there were only 80 new highs and 49 new lows in my universe of nearly 4,000 stocks.  39% of the stocks in my universe and 78% of the IBD 100 stock list on 5/15 are in a bullish stage 2 up trend.  However, 83% of my universe of stocks (93% of the IBD 100 list) closed above their MACD signal line, suggesting an upward trend in most stocks. Only 55% of the IBD 100 stocks from 5/15 advanced on Thursday compared with 58% of my universe of stocks.  Only four of the IBD 100 stocks from the list on 5/15 hit a new high:  EZPW, HOC, HANS and PMTI. Only 31 of the IBD 100 stocks from 5/15 closed higher Thursday than they did on 5/15.  The market has not yet tipped its hand.  I think this is a time for staying in cash.

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1 thought on “GMI:+2; D-1?; Staying in cash”

  1. Hi. I follow your posts daily and find them very helpful. Please keep this blog going! Thank you!

    I read the books on your favorites list and agree with your overall trading strategy.

    Question: Where do you look for opportunities on the short side? (…when the overall market is down, of course)

    Do you look first at industry groups that lead the last bull run, and then select individual stocks based on O’Neil’s rules? …or do you look for the overall worst industry groups and select stocks from there?

    What groups are you looking at for short opportunities now?


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