32nd day of QQQ short term down-trend; go with the trend; Dow 30 and S&P500 indexes looking weak

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GMI-21/8
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The GMI is back to 1.   It does not pay to try to ride counter-trend bounces.   Better to be short or in cash.   Since the current short term down-trend in the QQQ began on April 16, the QQQ has declined -4.8%.   During that time 77% of the Nasdaq 100 stocks have declined.   However, 14 stocks did rise 5% or more.   What are the chances one would have known to just hold or buy those 14 stocks?   Almost 5x as many (61%) of the Nasdaq 100 stocks declined 5% or more.   Those are pretty bad odds for profiting by going long.   During this period, QID rose almost 9% and SQQQ almost +13%.   Again we learn that the best approach is to buy a leveraged ETF that tracks the Nasdaq 100 index as soon as a change in the short term trend is identified. When the next QQQ short term up-trend begins, I will buy QLD or TQQQ and announce it in a post.

Meanwhile, this weekly chart of the Dow 30 shows that the index is below its 30 week average (red line) a possible sign of a beginning Stage 4 decline.   The S&P500 index has a similar pattern.   Only the QQQ remains above its 30 week average, reflecting greater relative strength in the nonfinancial tech stocks. If the QQQ comes back below its 30 week average I will start to go to cash in my university pension.

 

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31st day of QQQ short term down-trend; Stage 4 down-trend in gold

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The GMi has risen to 2 and the GMI2 to 3.   The Worden T2108 Indicator is at 30%, in neutral territory.   I am still waiting to see how far this bounce from oversold territory will go.   I own calls on DDD (one of Judy’s picks) and own puts on   GLD.   I remain largely in cash as I wait to see if this rally can strengthen. This weekly chart of GLD shows a Stage 4 pattern of weakness.   Gold weakens as the dollar firms. Click on chart to enlarge. A close of GLD below support, around 148, could trigger a steep sell-off.

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30th day of QQQ short term down-trend

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I had hoped to produce a new video this weekend but was unable to get to it.   Thank you for all of your nice comments.   If you missed my video on “sell in May”, please go to last Monday’s post and select the link. The GMI remains at 1 and the GMI2 is at zero. It remains to be seen how long this bounce from oversold levels will last.   I remain largely in cash in my trading accounts.

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28th day of QQQ short term down-trend; Two new Judy’s picks: DDD, SSYS

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On the sidelines with small positions. Watching for definitive signs of a real turn. Meanwhile, here are two new Judy’s picks:   SSYS, DDD. I have a position in DDD.   Both of these have recently bounced off of support and are in the emerging 3D printer business. My stock pick buddy, Judy, loves this 3D concept.

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27th day of QQQ short term down-trend; GMI remains on a sell signal; GLD and commodities are weak

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GMI-21/8
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The market remains in a short term down-trend within a longer term up-trend.   I am mainly out of the market and in cash in my trading accounts and remain invested in mutual funds in my university pension. The time for me to be in stocks is after the GMI has given a buy signal. The last GMI signal was a sell in early May.

I own some put options on GLD.   Gold still looks weak to me, especially with the dollar getting stronger.   Look at this recently strong daily chart pattern of the bullish dollar ETF, UUP. Click on chart to enlarge. As the dollar rises in value, it takes fewer of them to buy an ounce of gold, and GLD and other commodities decline.

DBC, a commodity tracking ETF, is back to where it was in December.

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