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28th day of $QQQ short term dwon-trend

GMI

1/6

GMI-2

0/8

What is the GMI?
 

WORDEN T2108

17%

On sidelines.

27th day of $QQQ short term down-trend

GMI

1/6

GMI-2

0/8

What is the GMI?
 

WORDEN T2108

20%

On the sidelines.

26th day of $QQQ short term down-trend; dollar over-sold; dollar to bounce, gold to weaken?

GMI

0/6

GMI-2

0/8

What is the GMI?
 

WORDEN T2108

21%

Expect a bounce in UUP (US dollar). Note the daily 10.4.4 stochastics is below 20, a point from which UUP has bounced several times. UUP is also below its lower 15.2 daily Bollinger band. GLD (gold) should therefore weaken too.

Screen Shot 2016-02-10 at 6.46.19 AM

25th day of $QQQ short term down-trend; GMI performance

GMI

0/6

GMI-2

0/8

What is the GMI?
 

WORDEN T2108

22%

Here are my GMI signals applied to the QQQ the past two years and since inception. Click on charts to enlarge. (Past performance does not guarantee future performance!)

2yrredgreenchart2006redgreenchartThe GMI issued its last signal, Sell, on December 10. (My QQQ short term trend count, currently at D-25,  is based on a much more sensitive and short term count.)

Why I follow my General Market Index, GMI

GMI

0/6

GMI-2

1/8

What is the GMI?
 

WORDEN T2108

27%

It took me a long time to understand the wisdom of Nicolas Darvas and William O’Neil’s advice to always trade in synch with the overall market’s trend. I learned the hard way that the same buy set-ups and rules that worked in a rising market failed repeatedly in a declining market. That is why I go short or retreat to the sidelines when my indicators, summarized in the General Market Index (GMI), lead me to issue a Sell signal. The last Sell signal occurred on December 10, 2015. Since then I have been mainly in cash. I find it very difficult to stay in and  trade on the short side, and leave that strategy to younger people with greater ability to handle the risks and losses from shorting.

I decided it was time to assess once again whether following the most recent GMI signal was an effective strategy. This table leads me to conclude that it was. As William O’Neil has taught, most (about 70-80%) stocks follow the trend of the general market averages. During the period since the December GMI Sell signal, between 78%-92% of the stocks in the three ETFs I follow most closely declined through last Friday. Because many of the GMI components are based on the action of the QQQ, it is not surprising to me that the QQQ and its component stocks performed the worst since the GMI Sell signal; the QQQ declined -13.5% and 92% of its component stocks declined, 60% fell by 10% or more, since the day of the GMI Sell signal. But all three index ETFs have declined since then and the overwhelming majority of their component stocks have also declined.

I know the media pundits say one cannot time the market, but the GMI has gotten me out of the major market declines since 2000 and back in during the recovery. I never worry about missing the market’s eventual recovery. If I get back in lower or even equal to  where I exited, I did well enough and avoided a lot of mental anguish…

GMIperf02062016

Speaking of the GMI, it remains at a 0 (of 6) and I remain in cash.

GMI02052016

My AAII workshop is February 20, register here.

23rd day of $QQQ short term down-trend; $LNKD and $DATA telegraphed weakness long before today’s rout

GMI

0/6

GMI-2

2/8

What is the GMI?
 

WORDEN T2108

32%

Nice to be in cash. LNKD next leader to crumble today. Even before today, this weekly chart shows that LNKD was a failed green line break-out (GLB) and trading below its critical 30 week average (red line). It also was beginning a BWR down-trend. None of my students would have been holding it!

Screen Shot 2016-02-05 at 6.08.21 AM

Screen Shot 2016-02-05 at 6.12.35 AM

As did DATA:

Screen Shot 2016-02-05 at 6.15.32 AM

Ignore the technicals at your own risk…….

22nd day of $QQQ short term down-trend; dollar dives

GMI

0/6

GMI-2

2/8

What is the GMI?
 

WORDEN T2108

29%

Dollar takes a dive…..

Screen Shot 2016-02-03 at 9.06.19 PM

21st day of $QQQ short term down-trend; $TLT shows long term rates coming down

GMI

0/6

GMI-2

2/8

What is the GMI?
 

WORDEN T2108

24%

TLT measures 20 year U.S. treasury bonds. The higher they go, the lower the long term interest rates. Does flight to bonds indicate fear of a market crash or fear of a recession?

Screen Shot 2016-02-02 at 8.25.21 PM

20th day of $QQQ short term down-trend

GMI

0/6

GMI-2

4/8

What is the GMI?
 

WORDEN T2108

29%

Bounce continues as earnings are being released. Then what…………..

I am still safely on sidelines.

19th day of $QQQ short term down-trend; $QQQ and $SPY look weak

GMI

0/6

GMI-2

4/8

What is the GMI?
 

WORDEN T2108

29%

IBD sees renewed up-trend. MY GMI and QQQ short term trend indicators are still pointing to a down-trend. For me, this rise remains a “dead cat bounce” until more of my indicators turn positive. A lot of technical resistance is just above current levels. By the way, I drew the lower horizontal line in this chart months before QQQ found support there in January. We likely will see at least a re-test of January’s lows.

01312016QQQ

The SPY continues to look quite weak, in a BWR down-trend.

SPY01312016The GMI remains at 0 (of 6) and on a Sell signal since December 10th.

GMI01292016



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