Market rally continues; GMCR soars; Rocket Stocks; Dollar cost averaging into my pension


The QQQQ up-trend completed its 32nd day on Friday.   When will the up-trend end?   No one knows.   My strategy is to hold growth stocks as long as the up-trend is in place.   Prior up-trends the past 3 years   have lasted as long as 86 days.   So the current up-trend may have a time to go, especially with the fear and skepticism accompanying this one.   On Friday there were only 11 stocks at new highs and 11 at new lows.   After the recent market decline there just are not many stocks near their 52 week highs. On two days last week there were   26 new highs in my universe of 4,000 stocks.   The last time there were more than 100 new highs in a day was September 18.

A stock at a 52 week high is rare, but even more rare is one at an all-time high.   I have been highlighting such rocket stocks the past few weeks.   One stock I wrote about in mid-April is GMCR.   Last week the stock soared 35%, bringing my account well into the black for the year.   There are a lot of other stocks at or near all time highs, including QSII, TNDM, ALGT, ARST, NFLX, AAN, AZO, HGG, ORLY, NTES, SNDA, LFT.   All but 2 (HGG and ORLY) are on my IBD100 list from April 27.   I own some of these rocket stocks and think that some of the next great market leaders will be from this list.   Any stock that can come through the past market decline and now be near its all time high is a winner.

Meanwhile, the GMI is now at 4 and the GMI-R is at 7.   gmi0501The Worden T2108 Indicator is at 90%, and 60% of the Nasdaq 100 stocks have their MACD above their signal line.   The QQQQ has closed above its 10 week average for 7 weeks.   Whenever the QQQQ is above its 10 week average, I tend to make money trading growth stocks on the long side.

So what to do now?   I have sold a lot of cash secured put options in my IRA on stocks in up-trends and hope that these puts will expire worthless on May 15. I also own some QLD, the ultra long ETF for the QQQQ, and some shares of some of the rocket stocks in the list above.   I remain parked safely in money market funds in my university pension.   I need a longer term up-trend to be evident before I put my conservative university pension money back in stocks.   I exited at a high enough level so that I have plenty of room to reinvest the funds at a lower level than where I got out.   I continue to dollar cost average into mutual funds with my bi-weekly contributions to my university pension, however.

5 thoughts on “Market rally continues; GMCR soars; Rocket Stocks; Dollar cost averaging into my pension”

  1. I have a small number of choices in my pension plan. I typically split my contributions between the general equity and the growth funds.

    Because most of the stocks I buy are on the IBD100 lists, I typically only do extra research to look into the reason for any recent massive spike in volume.

  2. Eric, How do you think this news below will affect ALGT ??
    TEL AVIV (MarketWatch)5 May 09 — Allegiant Travel Co., the Las Vegas parent of Allegiant Air, said late on Tuesday that certain holders priced an offering of 2.3 million common shares at $50. Of the total, Par Investment Partners is offering 2.25 million shares and a company director, Timothy P. Flynn, is offering 50,000. In addition, the underwriters have an option on 345,000 more shares if demand requires. Maurice J. Gallagher Jr., Allegiant’s chairman, president and chief executive officer, is providing 100,000 shares and the company is providing 245,000 shares for that option. Morgan Stanley is… At MarketWatch

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