7th day of $QQQ short term up-trend

GMI

5/6

GMI-2

6/8

What is the GMI?
 

WORDEN T2108

59%

Up-trend continues.

Where to from here?

GMI

4/6

GMI-2

3/8

What is the GMI?
 

WORDEN T2108

51%

The QQQ (and the SPY and DIA) are following a pattern similar to the one formed in December and January. The market rises and then enters a downward sloping channel of consolidation. I have drawn in the channel lines in the daily chart of the QQQ below. There are three things I look for in this daily chart. First, I look for the QQQ to bounce back and forth between the channel lines until an up or down-side break-out. Second, I look at the Bollinger Bands to guide my interpretation. The QQQ often finds support at the lower daily 15.2 BB. And third, the stochastics (daily 10.4) provides further indication of a possible oversold bounce. I look at all 3 of these indicators to guide my trading. I sometimes  trade the 3x leveraged bullish ETF, TQQQ, to ride the bounce up. I reduce risk by determining in advance a price  which may signal that the bounce has  failed and where I intend to sell out my position for a small loss. I find it much safer to trade a bounce off of support in an up-trending index or stock rather than buying break-outs. This is one of the primary techniques I teach my students at the university.

QQQ04172015

So what does this chart tell me now?  (Click on chart to enlarge.) We are backing off of resistance at the top channel line. The decline has not yet reached oversold territory, however. The stochastics are at a relatively high 70 level and the QQQ remains well above the bottom BB and the channel line.  I am waiting for these indicators to suggest a bounce from oversold. The index does not have to be oversold to signal a turn, however. The last bounce in February occurred with the stochastics around 38 (a bullish divergence) and just above the lower BB. While a turn at oversold levels is less risky for me, a turn at stronger levels can also signal the start of a nice move up. While the market can do anything, I suspect this decline will take us to oversold levels. The Worden T2108, at 51, is still high. T2108 fell to around 40 at the time of  recent bounces.

The analysis above is very short term oriented.  The weekly modified GMMA chart shows the QQQ remains in an RWB longer term up-trend.

QQQGMMA04172015IBD calls the market up-trend under pressure. The GMI remains on a buy signal since January. However, both the QQQ and SPY have now closed below their critical 10 week averages. Caution is called for.

GMI04172015

 

 

 

 

5th day of $QQQ short term up-trend

GMI

6/6

GMI-2

7/8

What is the GMI?
 

WORDEN T2108

63%

4th day of $QQQ short term up-trend

GMI

5/6

GMI-2

7/8

What is the GMI?
 

WORDEN T2108

65%

3rd day of $QQQ short term up-trend

GMI

5/6

GMI-2

7/8

What is the GMI?
 

WORDEN T2108

61%

2nd day of $QQQ short term up-trend

GMI

6/6

GMI-2

8/8

What is the GMI?
 

WORDEN T2108

57%

QQQ near top of channel.

QQQ04132015

New $QQQ short term up-trend

GMI

6/6

GMI-2

8/8

What is the GMI?
 

WORDEN T2108

61%

All of my GMI and GMI2 components are positive. The QQQ and SPY have now closed back above their 10 week averages. Time to trade on the  long side again, at least until earnings season is over.

GMI04102015

10th and final day? of $QQQ short term down-trend

GMI

5/6

GMI-2

8/8

What is the GMI?
 

WORDEN T2108

58%

Another up or flat day on Friday will change the QQQ short term trend to up. The QQQ is clearly rising in its channel.

QQQdaily04092015

9th day of $QQQ short term down-trend

GMI

3/6

GMI-2

7/8

What is the GMI?
 

WORDEN T2108

60%

8th day of $QQQ short term down-trend

GMI

3/6

GMI-2

3/8

What is the GMI?
 

WORDEN T2108

59%

QQQ remains in a channel.

QQQ40072015



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