General Market Index (GMI) table

Blog post: 19th day of $QQQ short term down-trend; daily BWR down-trend on deck?

@ 10:53 pm
GMI4/6
GMI-22/9
T210859%

This chart shows that QQQ has fallen back below all 12 daily moving averages. Could form a daily BWR down-trend. The pundits are talking about rotation from tech to value stocks. But in my experience, tech has always led. It could be we are seeing a top in tech to be followed by a top in the other stocks after the laggards rise a little. Sell in May is also on the horizon. This is the time to be in cash and on the sidelines. The market discounts the future.  It rose during the pandemic as  it focused on the coming recovery. It would not be unusual for the market to decline during the economic recovery as it foresees inflation, higher rates and an exploding budget deficit. I prefer to stand back and wait for Mr. Market to reveal his intentions.

 

Note that the QQQ has been below its 10 week average for 4 weeks while SPY has remained above for 7 weeks. The GMI remains on a Green signal. Beware if it Turns Red.

Blog Post–My 2012 Houston TC2000 Users Group video is available at my blog’s Topics/Webinars Tab; I gained a lot by watching!!

@ 6:54 pm
GMI4/6
GMI-24/9
T210864%

My undergraduate students have an assignment to review it. This slide presents my approach at that time. The video explains each of these rules. Today, I add stocks from the MarketSmith Growth250 list.

 

The GMI remains on a Green signal. I do not remember a market when the QQQ type growth stocks diverged so much from other stocks. I still think the demise of the leaders could foreshadow a general market decline. They always shoot the generals before the troops. If the QQQ can retake its 10 week average I will feel more assured about the market.

 

 

 

Blog post: Split market with $QQQ below 10 week average and $DIA, $SPY and $IWM above; This week should tell us which index is the leader; Commodities ETF, $DBC, in Stage II up-trend

@ 7:28 pm
GMI2/6
GMI-23/9
T210854%

This week the GMI flashed a Red signal, when it had two consecutive daily readings below 3. The start of the QQQ short term down-trend on February 23rd had already alerted me to exit the long side in my IRA trading account. When the GMI turned  Red, I also transferred some other pension money out of stocks. No one knows how the market will react to the COVID stimulus bill and the likely associated rise in interest rates. I do know if rates continue higher it will suck money out of riskier stocks and into less volatile interest bearing securities. One thing that seems for sure to me is expected upward pressure on commodity prices as the world economies recover and focus on rebuilding infrastructure. I therefore hold a small position in the commodity ETF, DBC, shown below. Note from this weekly chart that DBC has advanced each of the past six weeks. Note also the unusual trading volume last week as it had a weekly green bar (WGB) signal. I would sell if it traded below last week’s low of $16.51. Moving stops up to the low of each subsequent WGB can be a profitable strategy. DBC is in a Weinstein Stage II up-trend, above its rising 30 week average (solid red line) since October.

In contrast, the high volume break-down in QQQ is troubling. If QQQ does not hold its 30 week average, it could enter a major decline.

 

The GMI has kept me on the right side of the market for years. However, it is heavily focused on QQQ which is weak as other types of stocks remain strong. The question remains which index will prove to be the leader.