The GMI and GMI-R have been zero since Tuesday’s close. There were 3 new highs and 424 new lows in my universe of 4,000 stocks on Wednesday. The Worden T2108 Indicator is now 21% and heading down from the reading of 89% on January 6. In the November swoon, this indicator bottomed at 1.2%. So we have a long ways to go to hit the same depths present at the November bottom. The QQQQ is now in the 2nd day of a new short term down-trend.
If you go back a few posts you will see that I wrote that TSYS looked like a break-out from a cup-with-handle formation. Well, that stock continues to surge higher and hit a nine year high ($9.93) on Wednesday. William O’Neil has said not to buy break-outs in a bear market, but this may be the one needle in a haystack that will work out. I continue to hold a few shares of TSYS…..
I am also holding puts on some stocks in my IRA. One cannot use margin in an IRA so I cannot short stocks there. But I can buy put options or inverse ETF’s. I don’t know if it is too late to short weak stocks, but I know that buying stocks that are in down-trends has not worked for me. Then again, my friend Judy does so well buying stocks that bounce off of their lows. In fact, she recently bought GLD in the 70’s and still holds some. Gold and silver (SLV) have been steadily advancing. I remain mainly in cash.
5 thoughts on “GMI and GMI-R are back to zero, QQQQ in new down-trend; TSYS and GLD; short or in cash”
Hi Dr. Wish,
Where do you have stop loss for gold and for TSYS? I purchased GLD two times, each time with stop loss below latest support but I was always kicked out and lost money. GLD is gapping a lot, I don’t it’s a stock for traders. But again, I’m just a beginner. So, how do you set the stop loss for GLD or a stock that gaps a lot generally?
Cheers! Keep up the great work. Love your blog. It’s a part of my daily routine. I’ve purchased all the books you’ve recommended me, unfortunately, you had the old design back then without the Amazon affiliation. Well, if you find any other interesting book, be sure to add it!
I bought TSYS after gap day on 2/9 and placed stop below low on day of gap. I normally do not buy cheap stocks but this pattern was exceptional. I do not own GLD, but it appears to track its 30 day average. I never hold a momentum stock that closes below its 30 day and I often buy off of a bounce and place my stop below the low of the bounce. GLD is too extended for me now.
Dr. Wish, today (Thur)TSYS received over $5M on a new government contract. After this huge income,it was expected to climb very high. Instead, it went down. Anyone has any idea why it did not climb?
@ Joseph: When good news comes out about a stock after it has rallied or broken out to new highs, all the smart money or traders that are in-the-know have already bought their shares. The latecomers who invest off the news are the last to buy. Once this happens, there is a lot of supply of sellers who want to take profits. And at the same time, a lack of buyers since everyone who would buy on the news has already done so.
Thus, the price starts to go down, and the late-buyers, who are frustrated at the selling, start to sell their losing positions. Selling begets more selling until the late-buyers are shaken out. Only at that time does the smart-money re-enters the stock again.
The lesson, never buy on good news alone.
@Dr Wish, very good reply. I kinda knew that was the reason (too high to keep going up). I did not buy TSYS because I had been waiting for for it to come down to fill that big gap of 2/9, time when you bought it. I bet it will soon fill the gap.