The GMI fell to 2 (of 6) and the GMI-R to 3 (of 10). Wednesday was the 6th day of the current QQQQ down-trend. There were 84 new highs and 275 new lows in my universe of 4,000 stocks on Wednesday. The Worden T2108 indicator is back to 29%, still above bottom territory (below 20%). After option expiration on Friday, we may see the market decline accelerate. It is time to be hedged or in cash or short.
Dr. Wish
GMI: 4; GMI-R: 5; CPST breaks out again
The GMI rose to 4 and the GMI-R fell to 5. There were 114 new highs and 123 new lows in my universe of 4,000 stocks on Tuesday. The QQQQ failed to break through its 30 day average. So the QQQQ is still providing few clues as to its probable direction. Tuesday was the 5th day of the current QQQQ down-trend. Meanwhile, CPST, a Judy's pick at $1, broke out again.
GMI: 3; GMI-R: 6; Critical juncture; China stocks toppy?
The GMI is at 3 (of 6) and the GMI-R is 6 (of 10). The GMI-R is more sensitive to short term trends and reflects the growing strength in the QQQQ. There were 91 new highs and 92 new lows in my universe of 4,000 stocks on Monday. The QQQQ is right up against resistance. A close above 49 will push the GMI into bullish territory. The strength in RIMM and the fact that the IBD Growth Mutual Fund Index has retaken its 50 day average suggest to me that this rally may have further to go, at least through option expiration this Friday.
Meanwhile, I think that China stocks are about to break down. A lot of individual China stocks (CHA, SNP, PTR, LFC, CHL, ACH, JFC, GCH, CEA, ZNH, CHN) have the reversal pattern reflected in this ETF, FXI. Note the reversal in the 30 week moving average (red line). I would not hold any stocks with this ominous pattern; I own puts on LFC.