19th day of $QQQ short term up-trend

GMI

6/6

GMI-2

8/8

What is the GMI?
 

WORDEN T2108

75%

All components positive, but the T2108 is at 75% and getting near overbought territory. Also, 24% of all stocks are up 5% or more over the past 6 days.  That is quite rare.  We could get some weakness before we reach end of quarter mutual fund window dressing.  Then on to second quarter earnings……

What a market top looks like

I teach my students to let the action of the market reveal its true nature.  Ignore the interpretations of the media pundits, who are typically most interested in selling their advice. Many of these pundits have been warning of an imminent market top.  They have their many logical scenarios and use fundamentals and statisitcs  to back up their  prophesies.

I prefer to use my technical tools to characterize market tops and to compare them to the current market. Below are some GMMA monthly charts of the SPY (S&P500 index ETF) at the 2000 and 2008 market tops.  These monthly charts display 12 exponential moving averages plus the monthly close of the index (dotted line).  The red lines are shorter term averages and the blue lines are longer term averages.  As long as the red lines are rising above the blue lines so that there is a white space between them, we have the powerful RWB (red white and blue) pattern and the market is advancing.  When the red lines converge with and fall below the blue lines leaving a white space between them we have the BWR pattern and the potential for a significant decline.

Market tops take months to develop, leaving plenty of time for the watchful investor to exit the market. Note the pattern of the SPY as it formed a top in 2000-1:

GMMASPYmonthly

And again in 2007-8:

GMMASPYmonthly2008

Compare these patterns to the current pattern of the SPY:

SPYGMMAmonthly2014

I see nothing resembling a topping pattern.  Do you????? (The red arrows show the month of May from a prior Sell in May analysis.) To the contrary, the market looks like full speed ahead……

And the GMI, with all components positive, is still on the Buy signal flashed on April 22nd.  Since April 22nd, SPY is up +3.9%, the QQQ is up +6.0%, and the DIA is up +2.6%. In addition,   the 3x leveraged ETF, TQQQ is up +18.3%,  AAPL is up 21.4% and GMCR is up +23.7%.  I see again proof  that if I do not want to spend time searching for the rare individual stock that will greatly out perform the indexes, the best bet is for me to wade into the TQQQ during an up-trend. That is what I have been doing…..

GMI06062014

17th day of $QQQ short term up-trend

GMI

6/6

GMI-2

7/8

What is the GMI?
 

WORDEN T2108

68%

AAPL splits after Friday’s close.

16th day of $QQQ short term up-trend; $AAPL to zoom?

GMI

6/6

GMI-2

7/8

What is the GMI?
 

WORDEN T2108

61%

Keeping an eye on AAPL, which I continue to own.  It is trading at the equivalent of around $92 if it were to split now.  Once the split shares trade next Monday, how long will it take to reach $100 per share,  equaling $700 on the unsplit shares?  I would not be surprised to see AAPL zoom over $100, especially by the end of the 2nd quarter mutual fund window dressing period at the end of June. We shall see……

Below is the weekly GMMA chart of AAPL.  It clearly continues in a RWB rocket pattern, which I first wrote about last November.  Click on chart to enlarge.

AAPLwklyGMMA06042014

 

15th day of $QQQ short term up-trend

GMI

6/6

GMI-2

7/8

What is the GMI?
 

WORDEN T2108

64%

AAPL split is imminent.

14th day of $QQQ short term up-trend

GMI

6/6

GMI-2

8/8

What is the GMI?
 

WORDEN T2108

66%

Short and longer term trends remain up.

All of my short and longer term indicators are positive

GMI

6/6

GMI-2

8/8

What is the GMI?
 

WORDEN T2108

66%

The GMI is at 6 (of 6) and the more sensitive GMI-2 is at 8 (of 8). Friday was the 13th day of the current QQQ short term up-trend (U-13).

GMI05302014

 

12th day of $QQQ short term up-trend; Gold breaking support

GMI

6/6

GMI-2

8/8

What is the GMI?
 

WORDEN T2108

66%

GLD has now closed below its critical 30 week average (red solid line). It could be forming the right shoulder of a head and shoulders bottom formation or be starting a new leg down. Time will tell. Click on chart to enlarge.

GLDwkly05292014

11th day of $QQQ short term up-trend

GMI

6/6

GMI-2

8/8

What is the GMI?
 

WORDEN T2108

64%

All of my indicators are positive.

10th day of $QQQ short term up-trend; $CAVM green line break-out

GMI

6/6

GMI-2

8/8

What is the GMI?
 

WORDEN T2108

66%

IBD finally calls market in up-trend, after follow-through day on Tuesday.  On the other hand, Tuesday was the 10th day of the current QQQ short term up-trend, as I call them.  TQQQ has provided me with some nice gains since then.

CAVM had a high volume green line break-out to an all-time high. Check out this daily chart.

CAVM05272014

 

 



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