20th day of QQQQ short term down-trend; Rally on low volume
The late day rally on Wednesday occurred on lower daily volume than on Tuesday and is therefore suspect. There were also more new lows than highs in my universe of 4,000 stocks. Wednesday was the 20th day of the current short term down-trend in the QQQQ. The critical pattern to watch is how the indexes behave when/if they approach their declining daily moving averages. If they bounce down off of their averages and weaken, I will begin to transfer out of mutual funds and into money market funds in my university pension. In my trading IRA, I remain in cash and own a little GLD. The key is to wait until the market reveals whether there will be a change in trend.
Comments ( 3 )
Rick added these pithy words on Thu, 6-3-10 at 7:09 amThanks for the timely updates.
What was the number for GMI-R?
David Olson added these pithy words on Thu, 6-3-10 at 12:31 pmDr. Wish: wanted to give you an update on my trading position. I am net short having purchased SRTY at 49.6. One of the biggest reasons for re-entering this trade is that the major indexes are below their 200 day moving averages and the Russell 2K has yet to follow suit.
Also, the up days are on lower volume than the down days, put/call ratios keep skewing up on up days, inventories in durables goods are rising – which means consumers are not buying as much, and cash levels at retailers remain high due to higher sales of inventory than replenishment.
In my analysis is that I think like a fundamentalist while trade like a technician, the danger in this is that correlation is not always causation, to that end, the technicals remain weak.
David
David Olson added these pithy words on Fri, 6-4-10 at 4:02 pmClosed the SRTY position at 55.4 after such a huge advance.
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