My general market indexes (GMI, GMI-R) remain at zero. There were 2 new highs and 764 new lows in my universe of 4,000 stocks on Thursday. The indexes are far below the levels which would suggest to me a change in trend. Thus, the markets remain in down-trends and I will remain in cash. Thursday was the 33rd day of the current short term down-trend in the QQQQ (Nasdaq 100 ETF)…..
During bear markets, the prudent thing to do is to create a watch list of stocks that are building bases and resisting the down-trend.
One such stock is EBS. It apparently owns the rights to the only FDA approved anthrax vaccine and it just got another large contract from the federal government. EBS is one of the only stocks to hit new highs this week on huge volume. I do not own this stock but might be tempted if the market trend turns up. EBS reports earnings on November 6. After this huge market decline EBS is one of the only stocks to emerge unscathed. EBS is up about 64% from a year ago. Note, however, that buying stocks at new highs in a declining market can be treacherous. I would love to buy a stock like this in a rising market.