GMI:1; GMI-R: 1; Worden T2108: 15%, up from Monday’s low of 13%

The GMI and GMI-R are both back to one.  The QQQQ climbed back above its key 30 week average.  However, the DIA, SPY and the COMP remain well below their 30 week averages.  The Worden T2108 indicator is at 15%; at the low last August it was just below 8%.  The one bright spot I see in the Nasdaq stocks is that the leaders– RIMM, AAPL, BIDU, ISRG and GOOG appear to be holding up.  Still, there were only 25 new highs and 359 new lows in my universe of 4,000 stocks on Tuesday.

5 thoughts on “GMI:1; GMI-R: 1; Worden T2108: 15%, up from Monday’s low of 13%”

  1. I’d expect to see a counter rally to the 20 day MA (for QQQQs) before failure…

    first leg complete, counter rally, next wave down…

    I know a lot of traders who piled into short ETFs recently… so it makes sense to blow out the newly minted bears before resuming the downward trend.

  2. from indicators I use, this market is NOT going to hell in a handbasket as some would believe — the level of bearishness out there is quite large. This correction will likey be over shortly and the rally will resume. While its possible me may rally up for a few days to a 20DMA or other pt of resistance and turn lower to retest, I don’t see stocks resuming a lower trend and entering a bona fide “bear market”. I expect stock indices — the NDX in particular — to be breaking to new highs w/in a few months.

    NOTE: I am net long but not loading up the boat yet as I am waiting for one indicator to confirm the turn is in place.

  3. I suppose everyone can make a bear or bull case based on indicators…

    I’m amazed anyone can make a bullish case and call for new highs — the bearish psychology is warranted given the insolvency of most banks. I would think other than a few headlines, the majority of people I talk to are bullish and I’m sure if you talk to non-traders — they have no idea how big the credit problem is…

    I’ve developed some indicators like the good Doctor but I keep it real simple. As long as the 20 day MA is trending up and the stock is above — it’s a bull market. For me, QQQQs would have to close above the 20 day MA and the 20 day MA would have to flip around. I think most people make it way too complicated.

    Other than massive short-squeezes — I have to wonder who would pay premium prices in the market. Without help from Arab petro-money, Citigroup would be at an all-time low and facing insolvency. I added QID and SKF today as they went through the 20 day MA which is support in my book. If they close under for 2 or 3 days I will sell. But that assumes this rally would continue for several days.

  4. the credit crunch wipe out the market? Nah.

    it will limit upside in financials, housing, and those indices heavily weighted in it. Steer clear of them as there are better places to invest.

    I’m amazed one would think the market is priced at a premium. The growth of forward earnings of SP500 is almost 2x what one could get in T-bills and other bonds. While you could say the forward earnings estimates are false and are going to fall … the large amount of corporate insider buying says otherwise.

    The Fed will have to cut in the coming months — no matter what they say — or risk recession, even if doing so lowers the dollar further. The bond market is demanding lower rates. Lower rates will help fuel the market — especially growth stocks.

    And many sentiment indicators indicate quite a lot of bearishness lately. From a contrarian standpoint, that’s bullish.

    Speaking of the imminent turn in the markets I mentioned …. looks like it may be starting w/big rally today. If we somehow crash back down and give most/all of it up tomorrow or Friday, then we’ll have to wait longer.

  5. fact is — it all really depends on what the big money hedge funds feel like doing. They run GOOG and BIDU up 150 points — then short them and let them drop for 3 days… then run it up 330 points…

    Getting pretty hard to use any kind of signals to make money. By the time the good Dr. here confirms a new rally — the QQQQs will already be up 10% and ready for next down leg!

    Very hard to play.

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