The GMI returned to +4. there were only 64 new highs and 49 new lows in my universe of 4,000 stocks. 52% of the Nasdaq 100 stocks rose on Friday, along with 40% of the S&P 500 and Dow 30 stocks. The GMI-L fell to 56 and the GMI-S to 88, indicating some weakening in the long term and short term market indicators. This market is too close to call, although it remains in a short term up-trend. Friday was the sixth day in the current QQQQ up-trend (U-6). This was the second week that the QQQQ closed above its 10 week average, a nice sign of strength. 19% of my universe of stocks closed within 5% of their yearly high, while only 6% closed within 5% of a new low. The market has been tough on IBD 100 growth stocks. Only 19% of the IBD 100 list on 5/15 closed higher on Friday than they did on 5/15, compared with 43% of my universe of stocks since the same date. 63% of the IBD 100 stocks on 8/14 closed higher on Friday than they closed on 8/14. Only 3 of the IBD 100 stocks from 8/14 hit a new high on Friday (NVEC, NGPS and WCG).
This market remains in a short term up-trend. But the GMI is close to turning down, with the IBD mutual fund index virtually on top of its 50 day average. With the end of the month coming we may get a follow through of the rally this week. But we are also approaching October, a month where many bottoms have occurred. I am holding onto my longs and am ready to dump them if this market falters.
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