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.
(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.