Sorry I missed posting on Wednesday. The GMI is still 5 with the daily trend of the QQQQ too close to call. 80-90% of the stocks in the Nasdaq 100, S&P 500 and Dow 30 indexes advanced on Wednesday. There were 422 new highs in my universe of 4,000 stocks. The GMI-S rose to 81, indicating renewed strength in my short term indicators. Still keeping an eye on NUAN, ATHR and CEPH, some of which I own. These looked like cup with handle patterns and I wrote about them in prior posts. Check out my disclaimers below.
The GMI fell to 5 and the GMI-S fell 19, to 44. 26% of the Nasdaq 100 stocks rose on Monday, along with 37% of the S&P 500 and 43% of the Dow 30 stocks. There were only 109 new highs in my universe of 4,000 stocks. The GMI-S fell to 44, as none of the four short term indicators for the QQQQ remain positive. Monday was the first day in the new QQQQ down-trend, but the moving averages are flat, indicating no strong up or down-trend. The QQQQ remains within its horizontal channel. Only 41 of the stocks from the IBD 100 list from 2/05 rose on Monday and only 46% closed above their price on 2/05. Only 51% of the Nasdaq 100 stocks closed above their 30 day averages.
Please note my disclaimers at the bottom of yesterday’s post.
This has been a frustrating period for riding a trend in the QQQQ. Even though the GMI is 6, the QQQQ has made no progress since late November. It is in a horizontal channel with resistance around 44.71 and support around 43.33. Until one of these levels is decisively broken, it will be difficult to make money trading tech/growth stocks. Still, the Dow and S&P 500 type stocks remain in an old and weakening upward trend and it is there that I probably have the best chance of riding a trend. On Friday, 12% of the Nasdaq 100 stocks advanced along with 19% of the S&P 500 stocks and 13% of the Dow 30 stocks. There were 265 new highs in my universe of 4,000 stocks. The GMI-S fell to 63, with weakness in the short term indicators for the QQQQ and DIA on Friday. The QQQQ is back below its critical 10 week moving average. This is not the time to be brave and make large bets in either direction…
Nevertheless, I did find another stock that appears to have broken out of a cup with handle base of about nine months. NUAN (see weekly chart) has a large prior up-trend, and a close above the top of the handle (pivot point) on extraordinary volume last week. It will be interesting to see if NUAN can buck the malaise evident in the general tech indexes.