GMI: 5; GMI-R: 9; My General Market Index (GMI) catches trend changes again!; More Judy’s picks–ITRI and IMAX

The GMI is at 5 (of 6) and the GMI-R is 9 (of 10).  The only indicator that is not positive is the Weekly QQQQ Index which indicates that the major longer term trend is still down. Gmi0418
But the short term trends are all positive. The GMI-S is at 100%, indicating that all 16 short term indicators for four key index ETF’s are positive.  The GMI-L is still at 50% indicating that only half of the longer term indicators are positive. I wrote when I started this blog 2 years ago that my indicators have kept me on the right side of the general market’s trend since  1998.  I have been largely out of the market in all major declines and back in for each ensuing recovery.  For example, I closed out my margin account in October 2000 and cut back in my IRA trading account;   my IRA was up more than 50% during the 2003 recovery.  I also switched my university pension mutual funds to cash during 2000-2002.  I have recently been in cash in my university pension funds since December and will remain in cash until the GMI rises to 6.  To show you how possible it is to time the market, in 2000, I got out of my university pension growth fund around $103 and by 2002 it was trading in the 30’s. All this time the buy and hold crowd was urging the masses to stay invested, lest the market take off without them.  This advice is garbage and many people were hurt.  Once the market turns it rises for months and there is always plenty of time to get on board.  No one can know for sure whether the current rally is one of those major turns.  The key for me is to watch the market movement as reflected in the GMI, and to ignore the news and the media pundits.  When the the train is moving in the right direction, one should hop on and not argue with others regarding whether it should be moving or how far it will go.  If the train reverses I can always hop off and wait for it to come my way again.  The key is to use tax deferred accounts where there are no tax consequences from getting in and out of positions….

After watching Judy’s marvelous pick, CPST, take off, up 50% since I mentioned it, (and 200% since Judy bought it) one of you asked me whether Judy has more picks.  Of course she does!  Two stocks she told me about that I own and am watching closely are ITRI and IMAX.   Both are "concept" stocks, the only type she buys.  Her picks do not always work out and I tend to wait for the right technical signal to buy them, usually  at higher prices than she does.  IMAX has been acting weak but is holding up, and  ITRI looks good to me if it can break $101 and hold it….

GMI: 5; GMI-R: 9; 18th day of QQQQ short term up-trend; writing covered calls; CPST up 50%

The GMI held at 5 (of 6) and the GMI-R at 9 (of 10).  There were 130 new highs and 58 new lows in my universe of 4,000 stocks on Thursday. 63% of the Nasdaq 100 stocks closed above their 30 day averages.  It is time for me to accumulate QLD and after Friday, to write new calls on IBD100 stocks.  I  write calls on growth stocks in up-trends that will not report earnings during the life of the option.  I only write near term calls.  So I will start writing May calls next week.  Among the IBD100 stocks that meet these criteria and have decent call premiums above 4%  are:  RIMM, MON, MOS, MTL, FLS and GTLS.  I may do buy-writes on some of these stocks next week.  Meanwhile, I will wait for Saturday when my April calls will expire or be executed and my account will again have an infusion of cash.  Making 4% each month is ample return for me. By the way, I am most successful writing covered calls when the QQQQ is in an up-trend, as is the case now.  Check out CPST, now up almost 50% since I wrote about it on March 27:   Judy can sure pick stocks!

GMI: 5; GMI-R: 9; QQQQ short term up-trend confirmed!; 41 IBD100 new highs

I wrote yesterday that the QQQQ was hovering on support and would either fall off of the cliff or bounce.  On Wednesday, for the first time since February 26, I have registered more than 100 new highs in my universe of 4,000 stocks.  There were 153 new highs and 50 new lows on Wednesday. Gmi0416
(Click on chart to enlarge.)  The last time the GMI was above 4 (it was 6) was on December 26, 2007.  The QQQQ successfully tested its up-trend on Wednesday with 94% of the Nasdaq 100 stocks advancing.  While very close, the QQQQ never violated its short term up-trend; Wednesday was the 17th day of the up-trend that I identified on March 25 (U-17).  Again, I had to learn the lesson not to anticipate a change in trend and  kept a lot of my longs through today, although I was hedged and made less money than if I had just stayed 100% long with the up-trend.  It is now time for me to accumulate QLD (the Ultra long QQQQ ETF) and other strong IBD 100 stocks.  41 of the  523 stocks on the IBD 100  lists I have monitored the past year hit a new high on Wednesday.  They are: BMI,AGU,VMI,POT,SID,MOS,MON,MEE,KSU,
SCHN,CF,X,GGB,CENX,KOP, BDE,TTES,XTO,NEU,OXY,BTU,
MT,NBL,WHQ,JOYG, RTP,ATW,EGN,RS,KWK,WFT,COG,SWN,BUCY,FTI,
HK,UPL,RRC,ATLS,OIL,ATN. Note how many of these stocks are from the oil, metal and agricultural chemicals industries.  These stocks continue to lead this market.  Stocks that break out to new highs quickly in an up-trend tend to be among the next rally’s leaders.  The key is to buy strength and not to bottom fish.  The fish on the bottom tend to eat garbage.