GMI: 6; Leaders continue to weaken; QQQQ up-trend looking tired

While the GMI is still at 6, the market looks weak to me.  Gmi1207 Yes, there were 332 new yearly highs in my universe of 4,000 stocks.  But only 14% of the Nasdaq 100 stocks advanced on Thursday, along with just 26% of the S&P 500 stocks and 37% of the Dow 30 stocks. And only 29% of the IBD 100 stocks from 11/20 rose.  And GOOG closed below its 30 day average, as did RIMM (barely).  And AAPL fell 3.1%.  When the market leaders can’t command higher prices, it bodes poorly for the other troops.  So I am back to 70% cash as I wait to see if the market up-trend is ending. QID, the inverse ultra QQQQ ETF that is designed to increase as the QQQQ falls, increased 1.35% on Thursday on the highest up volume since this ETF was launched in September.  A lot of money is betting that the QQQQ will decline–as have I.  I have been slowly transferring my money from QLD to QID.  This QQQQ up-trend at 78 days is looking mighty tired to me….


3 thoughts on “GMI: 6; Leaders continue to weaken; QQQQ up-trend looking tired”

  1. Why do the opposite of what your indicator says to do? The indicator is at its best level possible, yet you are hedging your bets. Would you not hedge once the indicator dropped down to 4 or less???? Maybe the indicator needs to be changed to somehow reflect the markets “tiredness”. This sounds harsher than I want it to. I check your site often to get a view of the overall market but it does disappoint me to see that you do not follow your own indicator.

  2. I have to ask the same question. I got out of my long positions last week after the big drop on 11/27 and lost and the market moved up since. This time I am resolving that I will stay in until the GMI says to get out.

  3. After being in an uptrend for such a long time the market could need some rest (agreed) and with some of the leaders (GOOG, RIMM, AAPL) lagging taking partial profits isn´t probably the worst idea. But so far the uptrend hasn´t even been broken, therefore I think it is way too early to go short. Lots of people have tried the same thing the past 78 days – and paid dearly. Right now it seems as if you are trying to pick a top and outsmart the market, something you voted against only a few weeks ago here:

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