Things held steady with many strong stocks breaking out. The GMI remains at +6. 46% of the Nasdaq 100 stocks advanced on Monday, compared with 33-37% of the S&P 500 and Dow 30 stocks. Monday was the nineteenth day of the current QQQQ short term up trend (U-19). There were 174 new highs in my universe of 4,000 stocks, down from 407 on Thursday and Friday. Still, 40% of stocks are in a short term up-trend and 60% closed above their 10 week averages. Many stocks are holding up and prior winners are reasserting themselves, like NTRI, NFLX (I own), ACL, LCC, LMIA, OSK…….
Still, I can’t help from being on the defensive when I look at the trend of commodities and the dollar. The dollar has now convincingly broken below its 30 week moving average (red line) and appears to be in a free-fall. I do not know what this trend foretells, but I do think it is an ominous sign. Perhaps this weakness in the dollar is behind the rise in gold and suggests that other countries will abandon U.S. currency and our bonds (government debt). I guess we can live with a return of the dollar to the low levels seen at the end of 2004, can’t we?
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