Month: January 2009

GMI: 2; GMI-R: 3 QQQQ on critical level–very cautious

@ 10:31 am

I am very cautious about the continuation of the QQQQ short term up-trend, now in its 24th day. There was only one new high and 33 new lows in my universe of 4,000 stocks on Tuesday. This is not the time to chase stocks at new highs. I am trying to hold onto my cash secured puts through Friday’s expiration. I have cut back QLD and am ready to sell all if the QQQQ declines. This is really a time to be mainly in cash again.

GMI error: 3 since December 30; GMI-R: 4; QQQQ back near support

@ 10:27 am

One of the GMI and GMI-R components counts whether the IBD growth mutual fund index is above its 50 day average. My logic is that when these mutual funds are doing well, so will I be likely to, when I buy similar growth stocks. IBD no longer publishes the 50 day average for the mutual fund index, but the chart with the average is available on their website’s stock charting application (enter symbol: 0muti). GMI0109 I do not check this chart every day and missed its cross above the 50 day on December 30. Thus, the corrected GMI has been 3 since then. I am concerned, however, that its 50 day average is far below its 200 day average. While the GMI is 3 and the QQQQ short term up-trend competed its 22nd day on Friday, the QQQQ is just above support. The more sensitive GMI-R has also fallen to 4. So, I have close sell stops on all of my long stock positions and will get rid of QLD if the QQQQ starts a down-trend. In that case, I may buy some QID to profit from a decline. Options expire on Friday.