The GMI and GMI-R are both 1. There were 53 new highs and 123 new lows in my universe of 4,000 stocks on Wednesday. I do not hold long positions during a QQQQ down-trend. I do not fight the market trend. The odds of success always increase when one trades consistent with the general market trend. Only 37% of the Nasdaq 100 stocks are now above their 30 day average.
Month: September 2008
GMI: 1; GMI-R: 2; Day one of QQQQ down-trend
The GMI is now 1 (of 6) and the GMI-R is 2 (of 10). I am now a little short and mainly in cash. Tuesday was the first day of the new QQQQ down-trend. There were 76 new highs and 58 new lows in my universe of 4,000 stocks on Tuesday.
GMI: 3; GMI-R: 4; QQQQ on the edge of the cliff; buy QID?
The QQQQ is one more down day away from a change in the trend to down. Another down day will also likely turn the GMI to one.
But it is important to wait for the signal and not to jump the gun. I am mainly in cash and will buy some QID if the market falls on Tuesday. QID is an ETF that is designed to rise twice as much as the QQQQ declines–it is an ultra inverse ETF. This has been the most difficult market for me to trade in a long time. Another strategy would be to wait in cash until this market shows real signs of an up-trend.