The GMI rose to +1, but it is too early to tell if this reversal will hold. Two other indicators are too close to call (?). Next week should provide more clarity, after end of quarter window dressing is over and new earnings are anticipated. 96-100% of stocks in the QQQQ, SPY and DIA indexes rose on Thursday. There were 96 new highs and 48 new lows in my universe of nearly 4,000 stocks. There were 6 new highs in the IBD 100 list from 5/15: GRMN, EXPD, LVS, CLDN, LIFC, OII. If this turn is for real, these stocks may be among the new leaders.
The GMI is still zero. Between 10-13% of the stocks in the Nasdaq 100, S&P 500 and Dow 30 indexes rose on Tuesday. There were 28 new highs and 149 new lows in my universe of nearly 4,000 stocks. None of the GMI-S (short term) indicators are now positive. A scan of my universe of stocks yielded 5 Rockets and 433 Submarines. Thus, finding good shorts is 80x more likely than finding possible longs. Tuesday was the 33rd day in the QQQQ down-trend. The IBD 100 stocks did as badly as my universe of stocks. There were only 2 highs among the IBD 100 stocks listed on 5/15. Only 16 of them closed higher on Tuesday than where they closed on 5/15 when the list was published…..
This is a good time to be short or in cash. As I noted a few weeks ago,make sure your cash balances are swept into a high yielding money market fund. Fidelity brokerage IRA accounts automatically are swept into the Cash Reserves fund paying almost 5%, but many of the other deep discount brokers pay their customers minimal interest while they invest your funds at much higher interest rates for themselves. I have been told that some of these brokers will let you manually transfer your funds to a better paying fund, if you are smart enough to ask for it…..