GMI: 6; Leaders continue to weaken; QQQQ up-trend looking tired

While the GMI is still at 6, the market looks weak to me.  Gmi1207 Yes, there were 332 new yearly highs in my universe of 4,000 stocks.  But only 14% of the Nasdaq 100 stocks advanced on Thursday, along with just 26% of the S&P 500 stocks and 37% of the Dow 30 stocks. And only 29% of the IBD 100 stocks from 11/20 rose.  And GOOG closed below its 30 day average, as did RIMM (barely).  And AAPL fell 3.1%.  When the market leaders can’t command higher prices, it bodes poorly for the other troops.  So I am back to 70% cash as I wait to see if the market up-trend is ending. QID, the inverse ultra QQQQ ETF that is designed to increase as the QQQQ falls, increased 1.35% on Thursday on the highest up volume since this ETF was launched in September.  A lot of money is betting that the QQQQ will decline–as have I.  I have been slowly transferring my money from QLD to QID.  This QQQQ up-trend at 78 days is looking mighty tired to me….


GMI 6; GMI-S: 81; Most 52 week new highs since April top; Bullish Trend Indicator at new peak of 71%

The GMI is at the maximum of 6 and the GMI-S now registers 81.  All four short term indicators for the SPY are now positive. Gmi1205_1  There were 554 new yearly highs in my universe of 4,000 stocks, the most since April 19 (also 554), before the QQQQ began its decline that ended in July.  At the bottom in July my Bullish Trend indicator bottomed out at 28% and has been steadily rising to its current new high of 71%.  Curiously, only 49% of the Nasdaq 100 stocks rose on Tuesday, compared with 60-64% of the S&P 500 and Dow 30 stocks.  67% of the IBD 100 stocks from 11/20 rose and 26 of them hit a new high.  So the IBD 100 type growth stocks outperformed these other stocks yesterday. Tuesday was the 76th day of the current QQQQ up-trend.

I know I should stop trying to anticipate market turns.  But with some indicators at peaks,  some leaders refusing to hit new highs (AAPL, GOOG, RIMM), and with the knowledge that market tops occurred in the Dec/Jan period the past few years, I am lightening up on my longs.  Of course I will wait for a real sell signal in the GMI to take larger short positions….