Month: November 2006

GMI: 6; Dec or Jan top not unlikely

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The GMI is still 6 and all of my indicators are positive. Gmi1124  Is a New Year’s rally shaping up? But what do Dec 11, 2000, Dec 6, 2001, Dec. 2, 2002, January 20, 2004 and Dec 15, 2004 have in common?  They were all peaks in the QQQQ!  So before we jump on the New Year’s Rally bandwagon, maybe we should be open to the possibility that a major market top can form in December or January.  In fact, January 11, 2006 was a peak in the QQQQ this year (at 43.31) that was not exceeded until a few weeks ago on November 9, after reaching a low of 35.54 on July 18 (an 18% decline from the January peak).  A December or January top is therefore far from unlikely, especially in an atmosphere of frenzied bidding up of IPO’s and a growing number of people with stock market profits betting on a New Year’s rally…………

Meanwhile, Friday was a terrible day for the Nasdaq 100, with only 22 of the 100 stocks advancing, the lowest number since November 1.  35% of the S&P 500 stocks rose on Friday along with 23% of the Dow 30 stocks.  While only 12% of the Nasdaq 100 stocks rose on November 1, that was two days before the latest push up began.  Friday was the 69th day in the current QQQQ up-trend.  Stay tuned……..Blogdisclaimer

GMI: 6;

@ 12:01 am

The GMI is still 6 and 60-67% of the stocks in the Nasdaq 100, S&P 500 and Dow 30 indexes rose on Wednesday.  Gmi1122 There were 356 new yearly highs in my universe of 4,000 stocks.  Only 58% of the stocks on the IBD 100 list from 11/20 advanced on Wednesday.  Wednesday was the 68th day in the current QQQQ up-trend and the 15th week that the QQQQ has closed above its 10 week average.

Blogdisclaimer 

GMI: 6; We don’t have to catch the exact bottom to profit

@ 12:01 am

I do not often recommend individual stocks, but after the close on 10/4, I wrote: "I am riding high with the QLD, a ProShares ETF that moves twice as much as the QQQQ, which it mimics.  I am also holding IAI, an ETF of U.S. brokerage stocks, a group that typically rises in bull markets when trading volume expands.  Why not own a piece of the casinos.  Other stocks that came alive today include RIMM, and finally GOOG, both of which I own."  Since I posted the above on 10/4, QLD has increased +15%, IAI is up +8%, GOOG is up +22% and RIMM is up +27%.  One did not have to catch the bottom in August to profit from this rise.  Contrary to what many pundits claim, there is plenty of time to catch the train after it has left the station……

The GMI is still at the maximum reading of 6.  On Tuesday there were 275 new yearly highs in my universe of 4,000 stocks.  53% of the Nasdaq 100 stocks rose, as did 54% of the S&P 500 stocks and 43% of the Dow 30 stocks.  63% of the stocks on the IBD 100 list for 11/20 advanced on Tuesday. 73% of the Nasdaq 100 stocks closed above their 30 day averages, well below the peak of 88% reached on 10/16. Blogdisclaimer 76% of the stocks in my universe closed above their 10 week averages, also below the peak of 83% reached on 10/16.  October 16 was the last short term peak in the QQQQ.   So, it looks like this rally has more to go before these two indicators reach the heights attained when the market hit a minor peak in mid-October.