The market continues to recover, with the T2108 well into neutral territory. It remains to be seen whether the market can break through its longer term averages. Meanwhile, the GMMA monthly chart below shows that QSII has emerged from a multi-month base. Judy and I have been talking about QSII for some time, and I currently own some of QSII. (Click on chart to enlarge.) With the GMI at 1, I remain very cautious.
The QQQ short term up-trend survived on Monday. I am holding on to a few small long positions……
A reader asked me to plot SLV like I did GLD yesterday. SLV tracks silver. The chart for SLV is much more negative than the one for GLD. Note the huge down volume from the peak and the break below the 30 week average (red line). Silver may be entering a Stage IV decline. Click on chart to enlarge.
According to how I define short term trends, QQQ is still in an up-trend, having completed its 12th day on Friday. We will see whether it will hold this week. The GMI is still 1 (of 6) and the GMI-2 is zero. The T2108 is at 20%, in low, neutral territory. The T2108 indicator reached 7%, very oversold, at the August market bottom. Note that the SPY has closed below its 10 week average for 9 weeks but the QQQ for just one week. This reflects the fact that the Nasdaq 100 Index (QQQ), unlike the S&P500 Index (SPY) contains no financial stocks. And as in 2008, the major weakness is showing up in the financial stocks.
My stock buddy, Judy, asked me where I thought gold would find support. I sent her the weekly chart of GLD below. Note how well GLD has found support at the 30 week average (red line) since the current up-trend began in early 2009. Since then GLD has been in a perfect Stage II advance. Support should therefore be around $154. Click on chart to enlarge.
I remain partially invested long in this market, but will exit all positions if the short term up-trend ends.
Thursday was the 11th day of the QQQ short term up-trend. A down of flat day wil change my trend count to negative. Time to be defensive. The Worden T2108 indicator is at 19%. It got to 7% at the bottom on August 8. Anytime T2108 gets into single digits it has been a good time to buy a bullish index ETF like SPY, DIA or QQQ. However, right now it looks like a continuing Stage 4 decline (see weekly GMMA chart of SPY below). My university pension is 70% in cash.
With the leaders like AAPL, AZO, AMZN and CMG hitting new highs, it seems like the tech/growth stocks are turning up. Monday was the 8th day of the new QQQ short term up-trend. SBUX and MAKO, a Judy long time pick, also hit new highs. On the other hand, NFLX, a dethroned stock, hit the skids again. Anyone who understands Stage Analysis should have seen this decline coming over a month ago. Technical analysis gets me out before the decline accelerates. I am slowly putting my university pension money back into mutual funds.No tags for this post.