GMI: 0; In cash or short

@ 8:24 am

The GMI returned to zero on Thursday.  Between 10-16% of the stocks in the Nasdaq 100, S&P 500 and Dow 30 indexes advanced.  Only 13% of my universe of 4,000 stocks advanced, as did only 9% of the IBD 100 stocks listed on 5/15.  Gmi0713 There were 24 new highs in my stock universe and 249 new lows.  On June 13 there were 13 new highs and 292 new lows, so we are approaching the depths of the decline in mid-June.  18% of the Nasdaq 100 stocks closed above their 30 day averages. Put another way, only 18 of the Nasdaq 100 stocks closed above their average closing price over the past 30 days.  Only 29% of my universe of stocks are in a bullish Stage 2 up-trend, as defined by Stan Weinstein (see his book, listed on the right). 17% of my universe of stocks are within 5% of a new low, while just 9% are that close to a new high.  Approximately 3 of every 4 stocks closed on Thursday below the price they closed on 5/15…….

With the GMI at zero, I hold no stocks in any account.  There will be plenty of time to buy stocks again after the inevitable real turn occurs, sometime in ………………………

Please send your comments to:  silentknight@wishingwealthblog.com.

GMI: +2; GMI-S: 44; Cash and short

@ 7:09 am

The GMI remains at +2.  While few stocks rose on Wednesday (18% of the Nasdaq 100, 17% of the S&P 500 and 7%of the Dow 30 stocks), my market readings are not as low as they were in June.  There were 127 new lows in my universe of 4,000 stocks on Wednesday, compared with 292 on June 13 and 173 on June 28.  Gmi0712_1 The short term indicators measured by the GMI-S has now fallen to 44; the GMI-L is 31.   14% of stocks are within 5% of a new low and 12% are within 5% of a new high.  Wednesday was the fifth day of the QQQQ down-trend (D-5) and the QQQQ has been below its 10 week average for nine weeks.  I have found that I profit from owning growth stocks when the QQQQ remains above its 10 week average.  In my opinion, anyone holding stocks in the current market should examine their strategy.  The markets of 2000-2002 should have taught everyone the folly of a buy and hold strategy.  Only 28% of the IBD 100 stocks from 5/15 and 33% of the 4,000 stocks in my universe closed higher on Wednesday than they did on 5/15.  Since mid-May, the odds of success have been on the side of those who are in cash or short.  That is the side I am on.

Please send your comments to:  silentknight@wishingwealthblog.com.

GMI: +2; Weakness continues; in puts or cash

@ 8:16 am

The GMI is still at +2 as my internal indicators, especially for tech stocks,  continued to weaken on Monday.  Gmi0710 Only 26% of the Nasdaq 100 stocks advanced, compared with 61% of the S&P 500 stocks and 63% of the Dow 30 stocks.  There were only 67 new highs in my universe of 4,000 stocks and only one new high (PMTI) in the IBD 100 list from 5/15.  Since the IBD 100 list was posted on 5/15, 25% of those stocks have advanced, compared with 35% of the stocks in my universe.  With odds  like these it makes no sense to chase the IBD type of growth stocks, unless one is partial to casino action that favors the house.  The key to survival in the market is to play only when the odds are in one’s favor.  In this environment my IRA remains short with put options or in cash.  There will be plenty of time to jump upon this train when it finally sets a northerly course.

Please send your comments to:  silentknight@wishingwealthblog.com.