More new lows than highs; T2108 and stochastic in oversold territory
For the first time since early November, there were more new lows than new highs in my universe of 4,000 stocks on Friday. Furthermore, the Worden T2108 indicator is getting near the level (below 20%) where declines sometimes end. Friday was the 11th day of the current QQQQ short term down-trend. We are either at the beginning of a major decline, or near the end of a short term correction. The best course for me is to wait for the market to tip its hand. The GMI remains at Read more…
Short term down-trend continues; AAPL
The GMI remains at 1 (of 6) and the more sensitive GMI-R is 2 (of 10). While many stocks have bounced off of extremely oversold levels, it remains to be seen if they can break through resistance. I am nibbling a little and placing close sell stops below the low of the bounce. I am watching AAPL very closely.
Short term down-trend deepens; QQQQ Guppy chart ominous; In cash
I started teaching two classes on technical analysis last week and will explain more of my concepts and include informational links, as many students will be new readers. My General Market Index (GMI) keeps me trading with the general market’s trend. The GMI is a count of 6 short and long term indicators. Because I like to trade growth stocks, the GMI focuses largely on the NASDAQ 100 stocks, as measured by the ETF, QQQQ. The Successful New High Index measures whether stocks that hit a new high 10 days ago have risen since that time. Since I trade stocks at or near new highs, I also like there to be at least 100 new highs in my stock universe of roughly 4,000 actively traded stocks above $5. My daily QQQQ and SPY indicators measure these indexes’ short term trends. The weekly QQQQ indicator is my measure of the longer term trend. Weekly charts provide me with a more interpretable and reliable picture of the market’s trend. Finally, my IBD Mutual Fund Index indicator tells me how well growth funds tracked by IBD are doing. If funds that invest in growth stocks are doing well, I am also more likely to make money trading growth stocks. I subsequently added four more indicators to the GMI in the form of the GMI-R (revised). The added indicators count whether there are more daily new highs than lows, and how the QQQQ has performed in relation to three moving averages. I become very defensive in my trading portfolio when the GMI is less than 4 and consider going to cash. When the GMI goes to zero, I also start going to cash in my more conservative university pension account, which allows me to trade its contents only a few times each year. So, with the GMI currently at 1, Read more…
Channel violated; new short term down-trend; Defensive
The vicious high volume break in the tech stock short term up-trend is a major sign of weakness. The GMI is down to +2, for the first time since the decline last November. This is not the time to be brave; I must conserve my capital. I will lighten up this week, move up my sell stops, and wait to see if the decline deepens. Given that the longer term up-trend remains intact, I will not go into cash in my conservative university pension funds. Read more…
Tech Stocks Decline, Will Channel Hold?
Thus far, tech stocks, as measured by the ultra 3X ETF, TYH, are declining within the channel I have been watching for several weeks. The question, which my stock buddy, Judy, raised when I first posted the channel was, will the bottom of the channel hold as it has in the past? No one knows. The key for me is to wait for the reversal, and to then wade in slowly, with stops below the low of the bounce. Meanwhile, the Worden T2108 Indicator is now in neutral territory, at 58%. Only 19% of the NASDAQ 100 stocks have a MACD that is above its signal line, the lowest percentage since last November’s decline. The low in this indicator last November was 9%. The key for me is to remain defensive, and to cut losses before they grow too large.
NASDAQ 100 Index Still in Up-trend; QLD and TYH beat most NASDAQ 100 stocks again!
The GMI is still at 6 although the more sensitive GMI-R has declined to 8. Still, there were 185 new highs in my universe of 4,000 stocks on Friday. 
The Worden T2108 Indicator is now at 76%, within neutral territory and down from the high of 84% last week. But only 41% of the Nasdaq 100 stocks had their MACD above their signal line, reflecting the weakness in tech stocks. Still, the SPY and QQQQ have closed above their 10 week averages for 10 weeks. During that time, the QQQQ increased +11%, QLD by +23% and TYH by +36%. The TYH beat all but 3 of the Nasdaq 100 stocks and QLD beat all but 12 of them. I repeatedly learn the virtue of just holding the QLD or TYH ETF’s rather than trying to find the few individual stocks that beat these amazing ultra ETF’s.
Tech stocks begin 5th bounce down?
It looks like TYH, the ultra 3x bull tech ETF, has begun its 5th decline after hitting the top of its short term channel. The longer term trend remains up.
Up-trend continues; GMI strong but T2108 is at 83%
All of my indicators are still in up-trends, with the GMI at 6 and the GMI-R at 10. The Worden T2108 indicator is at 83%, not far from the highest levels that it typically gets to, around 90%. I continue to hold QLD and a few other individual stocks.
Meanwhile, the QQQQ has completed the 43rd day of its short term up-trend and has been above its key 10 week average for 9 straight weeks. No one knows when an up-trend will end. We must wait for the critical technical signals. A trend follower must always get out after the top, after the down-trend has revealed itself. The key is to ride the elevator up and exit near the top floor, before it drops to the basement.
Techs still toppy short-term? T2108 near over-bought.
The TYH tech 3X ETF is still coming down from the top of its short term channel. T2108, at 81%, is getting close to over-bought territory.
TYH signaling short term tech decline? QQQQ in up-trend; AAPL and IMAX break out.
I thought you might like to see why we may be at the beginning of a short term decline in the tech stocks. TYH is the 3X ultra long tech ETF and it appears to be in a rising channel. TYH recently hit the top of the channel, which has been followed by a decline four times in the recent past. Nevertheless, the tech stocks remain in a longer term up-trend. The question is whether to sell a little now, or just hold on to see if the channel holds. Regardless, it seems to me that this may not be the time to take on new tech positions. Much better to buy closer to the bottom of the channel, if it holds.
But the long term Stage 2 (a la Weinstein, see his book to lower right) up-trend remains intact. Note, however, that the QQQQ does appear to be a little extended on this weekly chart too, having closed at the bottom of its last 5-day range.
Even as AAPL breaks from base. (All charts built using Worden TC2007)
Note on this daily chart that IMAX broke out to an all time high last week (on huge volume). My extraordinary stock picking friend, Judy, has been talking about IMAX since the stock was around $2. She of course bought it way back back then. It takes a while for the rest of us to catch up to Judy. She says the technical innovations in the recent 3D IMAX release, Avatar, is as big as when movies went from black and white to color. So, I own IMAX and am watching the story unfold.
