IBD Meetup Group Night; GMI: +6; QQQQ rally leaders; FNM and FRE look sick

Tonight was IBD Meetup night.  A large group of 14 persons came, indicating that interest in the market has returned.  The group could be characterized as being cautious about the market.  It seemed that people were making some money, but were still licking their wounds and their accounts were mainly down for the year.  One of the persons most skilled in IBD techniques was skeptical about the current rally because of its mediocre volume.  Maybe this bull has further to go………………………..

The GMI is still at +6.  The indexes were a little stronger todayGmi727  with 251 new highs among the 4,000 stocks in my universe.  There were 146 successful 10 day new highs–stocks that hit a new high 10 days ago and closed higher today than 10 days ago.  72% of the Nasdaq 100 stocks closed above their 30 day averages.  However, the percentage of stocks in a short term uptrend fell to 51%, suggesting that fewer stocks are following the leaders.  Still, between 59% and 63% of the stocks in the Nasdaq 100, S&P 500 and Dow 30 indexes rose today.  We are in the 14th day of the QQQQ uptrend (U-14)………………..

Since the beginning of this uptrend on July 8, the QQQQ has risen +5.16%.  During that time 70% of the Nasdaq 100 stocks rose–anywhere from 4% to 32%.  The median increase among the advancing stocks was +6%.  However, the top 10 performers rose from 14-32%.  The largest gainers were (percents are rounded):  SNDK (+32%), AMZN (+26%), SSCC (+22%), EBAY (+22%), APCC (+18%) and AMGN (+18%).  The largest decliners were: DISH (-5%), PETM (-5%), JNPR (-5%), VRSN (-13%) and SANM (-15%). The 70% of stocks gaining in this period demonstrates the wisdom of Livermore and O’Neil’s rule to always trade with the general market trend.  Why fight the trend– and the odds…………………………………..

A number of stocks I have been trading showed strength today–HANS, BBY, IVGN, KOMG, SHLD.  And a lot of other growth stocks bounced off of their moving averages.  However, two stocks that look particularly sick are FRE and FNM (I own puts on FRE).  My interest rate indicators continue to climb.  Maybe the higher rates are going to finally kill the mortgage market……………………………….

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Market rebounds; Cramer and NKE and puts; GMI: +6

The market was strong today with many growth stocks finding support at their moving averages.  Gmi726 GMI is firmly at +6 and there were 224 new highs in my universe of 4,000 stocks.  65% of the Nasdaq 100 stocks advanced, 59% of the S&P 500 and 47% of the Dow 30.  We are in day 13  (U-13) of the up-trend.  However, the percentage of stocks in a short term up-trend declined to 53%, the lowest reading  in a long time……………………….

Tonight Cramer panned Nike.  He said that NKE would likely be hurt by the upward revaluation of the Chinese currency.  I did not have to wait for Cramer for a reason to sell NKE.  NKE had been weakening for several weeks.  Nke Note on June 27, NKE had a huge decline to its 30 day average (red line) on its largest volume in months.  During the following 3 weeks it tried to recover and failed.  When it closed below its 30 day average again for 2 days on increased volume I suspected the stock was sick and started investigating shorting it by buying puts in my IRA.  I bought an August 90 put for  4.80 (actually $480 for 100 shares) on 7/25. Each put gave me the right to sell 100 shares of NKE at $90/share through August 19.  If the stock fell to $80 I could buy the stock and execute the option to sell it at 90, thus making a profit of $520 per put (1000-480), excluding commissions.  For every dollar that NKE falls, each put increases in value $100.  One does not have to buy the stock, the put will rise in value and can just be sold at the higher price.  These puts closed at $5.80 today as NKE declined. ………………………..

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Disappointing day for the bulls; GMI: +6 amid signs of weakness; Buy puts?

Today was a disappointing day for the bulls.  GOOG, CME, ORCT and HANS continued to weaken.  The short term interest rate indicator went to a new high today and bond indicators declined, portending higher long term interest rates.  Gmi725 While the GMI remains at +6, there are some signs of weakness.   Only 57% of the 4000 stocks I track are in a short term up-trend, the lowest percentage since July 8 when this QQQQ rally began.  We are now in the 12th day (U-12) of the rally.  Only 30% of the stocks in the Nasdaq 100 and S&P 500 indexes rose today, and only 17% of the Dow 30 stocks.  I am slowly getting stopped out of my holdings.  Once earnings season is over there may be nothing to support stocks.  Time to consider buying puts……………………………….

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