General Market Index (GMI) table

My indictors in the GMI table below are all positive. But why are so many of my setups failing and why is this market so difficult. I think Darvas once said they shoot the generals first and then get around to killing the rest of the stocks. When NVDA and PLTR report good earnings and decline, it makes me worried. Then when I look at the chart of MSFT I see more weakness. AMZN, TSLA and AAPL have failed GLBs. But GOOGL had a recent successful GLB. The economic news is horrible and we have a looming government shutdown at the end of the month. If the Fed reduces rates, it could be seen as confirmation of a weak economy. And then GLD is climbing to the heavens, evidence that people are scared. So what to do? Follow the indicators or just lay low? Look at this daily chart of QQQ. QQQ hit a wall at the upper 15.2 daily Bollinger Band (BB) on Friday.  The red dots on this chart mark days when the index bounced down off of the top BB. Will QQQ break through this week? If it does, this market is likely going higher. But note that the upper BB is declining.

Check out the strong GMI stats. Go figure.

While the new $QQQ short term up-trend has reached Day 5, I am concerned by the daily chart. It looks like a possible head and shoulders top pattern is forming. I labeled the head and shoulders. Note also the recent red volume spikes on down days. The key for me will be whether QQQ can climb above the right shoulder, at 578. If it should instead decline towards the neckline, drawn in pink, and then close below it, I think QQQ could retrace to its recent green line top around 540. Note that neither SPY or DIA are showing  similar topping patterns. In fact, $DIA recently had a GLB! (see daily chart)

Note the terrific volume on the day of the breakout. Is it also a cup with handle?

And SPY’s recent rise took it to an ATH!

$GOOGL held up beautifully in Friday’s decline, reaching an ATH and showing relative strength. Note its recent GLB. Must not close back below green line @207.05.

Meanwhile the GMI remains Green and registers 6 (of 6).

I told you that 40% of new QQQ short term down-trends end within 5 days. This may be one! The longer term GMI has remained GREEN throughout this period. Let’s see if this Fed induced bounce will hold.

For many years I have posted an analysis showing how the 3x leveraged ETF, TQQQ, outperforms almost all individual stocks during my QQQ short term up-trends. Les Masonson has just published an extraordinary analysis of these ETFs and several TQQQ trading strategies.This book should be in every trader’s library. While I knew how solid Les’ prior books have been, I was unprepared to read the extensive backtesting and analyses of leveraged ETF trends and their history that this book provides. I had no idea there were so many different ETFs based on QQQ. You can read my review of the book on Amazon.

There were so many stocks that bounced from oversold on Friday. I am waiting to see which have a nice follow through this week. If we get a new QQQ short term up-trend, I may gradually accumulate TQQQ.