GMI: 6; Ultra index ETF’s gain 7-10%; Worden indicator T2108

The GMI remains at the maximum of 6. I do not   post daily to this blog anymore, but plan to post any day that the GMI changes.   The GMI has been 5 or 6 since the close on March 21. Gmii0427 In that time, the QQQQ has increased   +5.2%, the SPY is up +4.35% and the DIA is up +5.6%.   If we had simply bought and held the ultra ETF’s on these indexes during this period we would have made 9.35% (QLD), 7.73% (SSO) or 10.08% (DDM).   For me, this is the preferred way to trade with minimum stress. So, why did I miss this trade?   Simply because I ignored my instruments (the GMI) and was afraid to follow them after the February decline……

I have added an indicator to the GMI table.   The Worden indicator T2108, that is available on TC2007, calculates the percentage of all stocks that closed above their 40 day moving average. This indicator acts like a pendulum that can reflect the market extremes. Readings above 80% often occur near market tops and bottoms often occur when the index is below 25.   No indicator is infallible, but I think this indicator provides an idea of when the market is at extreme.   Last week this indicator hit a high of 80.62% and closed at 76.64%. It seems to me we are much closer to a market top than to a bottom, but the GMI is still 6…..

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