GMI: 5; new QQQQ down-trend; Dow theory warning?


Well, the GMI weakened 1, to 5 on Wednesday.  Only 34% of the Nasdaq 100 stocks rose, as did 51% of the S&P 500 and 33% of the Dow 30 stocks.  Gmi1220_1 43% of the stocks on the IBD 100 list from 12/18 also rose.  After 86 days of an up-trend, the QQQQ is now in a short term down-trend (D-1).  This does not mean that the down-trend will last long.  But for now, I am short the QQQQ (by owning the inverse ETF, QID) and mainly in cash.  The QQQQ is acting very differently than it has been.  AAPL and GOOG continue to weaken, and RIMM is just holding on.  I believe the odds are turning against growth/tech stocks.  As the GMI declines, I will add to my short position.  Stay tuned………………………………..

Ever hear of the Dow theory?  It seems that the Dow Industrials and Dow Transportation averages should each confirm the major trend.Dj20 Has anyone noticed that the Dow Transportation average appears to be faltering?  In fact, one might even see a head and shoulders top in this chart.  Is this another sign of impending market weakness? Why would the transportation stocks be weakening in such a strong economy?

Please note my disclaimer at the bottom of Wednesday’s post.

1 thought on “GMI: 5; new QQQQ down-trend; Dow theory warning?”

  1. The more active sectors of the Industrial market , including metals , have formed what certaintly appears as the right shoulder of a H/S top . failing the highs of the left shoulder thus far . This as seen from 2 yr sector charts . Most other sectors are in a downward channel , 2 yr bearish flag near upper end of trend . Ya got me . But I’m cautious as well . Bill

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