My short term indicators are weakening and a lower close of the QQQQ on Monday would bring the GMI to 2. I am very defensive right now. Only 7 new highs and 9 new lows in my universe of 4,000 stocks on Thursday. The Worden T2108 indicator is now down to 41% and will have to fall below 20 to be in possible bottom territory.
General Market Index (GMI) table
End of window dressing Tuesday-now earnings
The rally in strong stocks as part of mutual fund window dressing will end by Tuesday. Then we wait for earnings to drive stocks.
Stage 2 bullish up-trend in sight; Some Darvas type stocks to watch
The market held by the end of last week and I am getting more bullish. This is because we appear to be at the beginning of a significant turn up in the QQQQ. According to Weinstein’s stage analysis, the QQQQ is beginning a Stage 2 up-trend, as shown by the fact that its 30 week average is now starting to curve up. This is the sine qua non (I went to Boston Latin School) of a bull move. Weinstein’s stage analysis (note his classic book, to the lower right) is the most important way for me to determine the trend of individual stocks and the general market. By staying out of the market during aStage 4 declines (like the one we just finished) one can put the odds in favor of one’s portfolio’s long term growth. The GMI, which includes this measure from stage analysis, remains at 4 (of 6).