The short term uptrend remains intact, with the GMI at 2 (of 6) and the GMI-R at 4 (of 10). The Worden T2108 indicator is at 43%, the highest since last September and well out of bottom territory. Tops often occur when the T2108 is at 70% or better. Another sign of strength is that 68% of the Nasdaq100 stocks closed above their 30 day averages, the most since August 28th. And the dollar may be breaking its up-trend, causing gold and other commodities to rise…..
If you got a chance to see the Wall Street Journal on Wednesday, you may have read the sad story about Bill Miller’s fall from grace. This icon of buy and hope and addiction to value has seen his fund and his career get shattered. It is very depressing that such a good stock picker apparently had no plan to abandon stocks that developed down-trends. Fundamental analysts kept telling him how undervalued his stocks were, even as many became more and more undervalued, and descended into oblivion. We need to remember that “value” is a myth. As Nicolas Darvas wrote, the only reason to buy a stock is if it is rising; if it is not rising there is no reason to own it. I hope Bill Miller can keep his job and that he learns from his painful experience.