GMI: 1; GMI-R: 1; 50th day of QQQQ down-trend; DGLY, cup-with-handle?

The GMI is one (of 6) and the GMI-R is one (0f 10).  Friday was the 50th day of the current short term QQQQ down-trend.  On Friday, there were 64 new highs and 304 new lows in my universe of 4,000 stocks.  The number of new lows remains  fewer than the number reached the prior Friday ( 504) and last January at the lows (1,453).  The Worden T2108 indicator is at 27%, above the low reading of 19% on March 10.  A reading of 19% is low enough to maybe constitute a market bottom, at least for now.  24% of the Nasdaq 100 stocks closed Friday above their 30 day averages, up from 10% on Wednesday.  On January 23rd this statistic bottomed out at 10% with the market. So, in spite of the volatility we experienced last week, the market seems to be holding.  But with the GMI and GMI-R at one, the Nasdaq 100 index remains in a confirmed down-trend, now in its 50th day.  Since I labeled this down-trend on January 3, the QQQQ has declined 16.5%.  During that time, 82% of the Nasdaq 100 stocks have declined, as have 78% of the S&P 500 stocks and 83% of the Dow 30 stocks.  It clearly does not pay to fight the market trend!  I either go short in a down-trend or stay safely in cash.

Still, I cannot resist looking for the next possible rocket stock to break out if this market should strengthen later this month (see my prior post).  I scanned the market using TC2007 this weekend and discovered a stock that appears to be forming a nice cup-with-handle base (outlined in yellow) after a sharp up-trend.Dgly
(Click on chart to enlarge.)  If DGLY should trade above the pivot point (about 7.85) with a large increase in volume, I  just might be tempted to  take a chance. I found an article that talked about the company’s huge recent increase in sales and have added this company to my watch-list.  In this market environment, it will pay to wait for a high volume breakout before I bite.


2 thoughts on “GMI: 1; GMI-R: 1; 50th day of QQQQ down-trend; DGLY, cup-with-handle?”

  1. Thank you for continuing to share your market indicator with us. I also appreciate your pithy observations.

    Your comment “It clearly does not pay to fight the market trend!” makes me think of a saying I am trying to find. It is something along the lines that trading against the trend is like trying to stay upright with a 1000 people on top of you. It may even have been Jesse Livermore. Do you know the saying I am referring to?

  2. Thanks for your continuing information. I read you first every day. I am sitting on my heels just waiting. I got excited friday.

    This is where my DCA direct purchases come in handy. I hope I am getting a good deal on a bunch of qqqq!!!!

    Thanks, James

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