The GMI and GMI-R are back to 2. If the markets close down on Wednesday, I will go short and/or to cash.
Month: June 2009
Short term up-trend in jeopardy
Monday’s carnage reduced the GMI and GMI-R, and the short term up-trend in the QQQQ is in jeopardy. The longer term weekly up-trend and Stage 2 up-trend are still intact, for now. There were only 4 new highs and 12 new lows in my universe of 4,000 stocks on Monday. The Worden T2108 indicator is now at 35%, and most declines do not stop at this level. Typically, declines end with readings below 25%. I got stopped out of several positions on Monday. This is not the time for bravery, but for close stop losses, in case things decline more.
Stage 2 bullish up-trend in sight; Some Darvas type stocks to watch
The market held by the end of last week and I am getting more bullish. This is because we appear to be at the beginning of a significant turn up in the QQQQ. According to Weinstein’s stage analysis, the QQQQ is beginning a Stage 2 up-trend, as shown by the fact that its 30 week average is now starting to curve up. This is the sine qua non (I went to Boston Latin School) of a bull move. Weinstein’s stage analysis (note his classic book, to the lower right) is the most important way for me to determine the trend of individual stocks and the general market. By staying out of the market during aStage 4 declines (like the one we just finished) one can put the odds in favor of one’s portfolio’s long term growth. The GMI, which includes this measure from stage analysis, remains at 4 (of 6).