The GMI and GMI-R remain at zero. There were 12 new highs and 726 new lows in my universe of 4,000 stocks on Monday. The Worden T2108 indicator fell to 8%, deep in bottom territory (see my prior post). So many media pundits are proclaiming a bear market that at least a bounce is likely. Monday was the 18th day of the current QQQQ down-trend.
Dr. Wish
GMI: 0; GMI-R: 0; Worden T2108 indicator: 9.3%– in bottom territory
Isn’t it interesting that after a 20% drop the media pundits finally acknowledge the “bear” market. I learned many years ago that bull and bear markets are called by the press 6 or more months after the turn. Pity the average person who waits to take action after the turn is called. On the other hand, the GMI has kept me on the right side of this market again. Note that according to my count, it has been 17 days since I identified the current QQQQ down-trend. I do not label markets as bear or bull, because such a pronouncement carries a ton of baggage regarding how long or deep such markets should be. It is far better to just label the current trend as up or down and to wait until it ends.
There were 11 new highs and 574 new lows on Thursday in my universe of 4,000 stocks. While the markets remain in a down-trend, the T2108 indicator (available from TC2007 at www.worden.com) is flashing a possible bottom or bounce. That indicator is now at 9%. With the exception of the October 1987 rout (T2108: <1%) major bottoms or bounces since then have occurred when this indicator was in the 5-8% range: 1990: 5.3%; 1994: 7.7%; 1998: 8.5%; 2001: 6.8%; 2002: 7.7%; 2007: 7.7%. With T2108 now at 9%, I am getting to the point where I might have to grit my teeth, hold my nose and buy at least a small amount of the Ultra Dow ETF, DDM. I might even just buy a few call options on DDM. If this indicator falls below 9, I will have to act.
GMI: 0; GMI-R: 0; 16th day of QQQQ down-trend; Worden T2108: 11%; VIX: 26%
The GMI and GMI-R remain at zero. There were 66 new highs and 452 new lows in my universe of 4,000 stocks on Wednesday. The market was not as bad as it looked, with only about one half of the new lows than we had on Tuesday. Wednesday was the 16th day of the current QQQQ decline. The Worden T2108 indicator closed Wednesday at 11%, well into bottom territory. The VIX also moved up to 26%….
The bear got around to killing the previously strong metal and coal stocks. I learned (again) the painful lesson to refrain from writing covered calls on any stocks during a market down-trend. While QID and my shorts have made money, I lost money on my covered calls, which I subsequently closed out. Only write calls on strong stocks in strong markets.