GMI 1; GMI-R: 1; Down-trend continues; Ultra short ETF’s

The GMI and GMI-R each fell back to one.  There were 26 new highs and 219 new lows in my universe of 4,000 stocks on Friday.  The last time there were more than 200 new lows was January 23.  The major index ETF’s I follow have now bounced down off of resistance.   The market looks very weak.  Friday was the 40th day of the QQQQ down-trend.  Take a look at major bank stocks–they look a lot like the housing stocks looked during their tremendous declines.  Major banks like BAC, WB, C, CS, DB, UBS are in a free-fall. Wb0229_2 They all have weekly charts like Wachovia’s (click on to enlarge). What does this tell us about the health of the economy?  To ensure FDIC protection, no one should have more than $100,000 in a single bank. I am getting out of all unhedged long positions.  I am still holding some stocks on which I have written calls, but will get out of these if their important support levels are broken.  I am considering buying some of the Ultra Short ETF’s (QID, SDS, DXD, SDD)  to hedge my long positions…….

I am taking a few days off on an already scheduled vacation–not because of the market.  I will post if I can on Tuesday. Be careful–this is not the time to be a pioneer on the long side.


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