Blog Post: Day 15 of $QQQ short term up-trend, GMI back to 4 (of 6); How to use hourly/daily/weekly GMMA charts to analyze the market.

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While the QQQ is in ints 15th day of a short term up-trend, I find it useful to look at how its adapted GMMA charts look. This consists of 12 exponential moving averages with different periods and a 13th average equal to 1 which shows the current price. In an up trend one wants to see the closing price (dotted line) leading all of the other averages higher. The 6 shorter averages are red and the 6 longer averages are blue. I draw it on a white background. When the red averages are rising above the blue leaving a white space between them I call it a RWB up-trend. The opposite is a BWR down-trend. These charts also reveal bases when all of the red lines come together, thus showing no price differences over the 6 shorter time periods.

This hourly chart shows that the QQQ is in an hourly RWB uptrend that is forming a small base with the red lines converging. I am watching for a move up or down out of the base this week.

The daily chart also shows QQQ in an RWB up-trend. So QQQ is resting within a longer term daily up-trend. Will it fail as it did last April?

However, the weekly chart shows that QQQ remains in a longer term BWR down-trend. Note the strong weekly RWB up-tend in all of 2021. That is the type of market where people can make a lot of money. I will consider wading into  the market in my conservative university retirement accounts when we get a new weekly RWB up trend. Such an up trend can last for months and give me considerable opportunity to profit. The time to exit from an up trend is when the white space disappears as it did at the end of 2021. GMMA charts are also useful for analyzing individual securities.

 

The GMI declined to 4 when QQQ closed back below its 30 week moving average on Friday. But it remains on a Green signal.

Day 10 of $QQQ short term up-trend, since Day 1 QQQ (+9%), TQQQ +27.7%, beating all Nasdaq100 stocks and all but 2 S&P500 stocks, ENPH (+37.7%) and SEDG (+28.3%)

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If I had bought TQQQ on Day 1 of the QQQ short term up-trend, I would have beaten almost all stocks. I  have demonstrated this strategy many times. The key is to buy TQQQ on Day 1 even though the new up-trend is most suspect. I have also written that a change in the short term trend trend is most reliable after it reaches Day 5. The key to this strategy is to slowly accumulate the triple leveraged ETF. I hope some of my readers have done so. The GMI remains Green. The longer term trend is still down, however.

Blog post: Day 5 of $QQQ short term up-trend; $GPC has GLB to ATH on Friday, see charts; Comp rating= 98 and RS=93; $RYAN also has a GLB; See video to chart RWB patterns

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I ran a scan of stocks near their ATH that had hourly, daily and weekly RWB patterns. Seven of 7,421 stocks came up. Two of them had GLBs last week, GPC and RYAN. GPC has the better fundamentals on MarketSmith and broke out on above average volume. RYAN is a recent IPO and trading volume last week was below average. Be very careful buying GLBs during this market down-trend. Many fail. When only 7/7421 of US and foreign ADRs were this strong technically, it tells me how weak individual stocks are. This description of RWB patterns, which I have edited to include hourly time frames, can be found in this blog’s glossary tab.

RWB (red white and blue) pattern

This is the term I use for plots that produce a pattern with 6 red shorter term exponential weekly (or daily or hourly) averages rising above 6 longer term weekly (or daily or hourly) exponential averages such that there remains a white space between the two sets of averages. This assumes a chart with a white background.  The 6 shorter term exponential averages are 3,5,8,10,12,15 weeks and the longer term exponential averages are 30,35,40, 45,50,60 weeks. I also add a 13th dotted line (a moving average of 1 period) that shows the close each week (or day or hour). A strong rocket pattern has all averages lined up with each average rising above the next longer average and the closes above all 12 averages leading them higher. My charts are an adaptation of Daryl Guppy’s GMMA charts. His book is listed at the bottom of this blog page. Richard Moglen has produced a free video showing how to set this chart up.

Below are weekly charts.