Not the time for me to make large bets. Daily Guppy chart of QQQ looks weak.
While the GMI Buy signal still holds for now, my short term trend count for QQQ has turned down. I do not trust a change in the short term trend unless it lasts for a few days. But I did cut back on my long positions on Monday. I do not like the way the market weakened towards the end of the day. The QQQ and SPY closed near their lows for the day.
TIS had a GLB to an all-time high on Monday.
Now that I have returned from CA, I want to review two stocks I have tweeted about, Z and ATVI. This daily chart of Z shows that it broke through its green line top (GLB) on Friday, on higher than average trading volume. Arrows show high volume, likely fund buying.
This monthly chart shows that the green line was drawn at the peak reached in October, 2015. A recent IPO (initial public offering) that forms a top, consolidates for months and then breaks out to an all-time high can prove to be a rocket stock (For example, FB did a GLB at $45 at month 17). It is critical, however, that the break-out hold and that Z not fall back below its green line. If it does, I will sell and then monitor the stock for support back above the green line. I like to re-enter a stock that rises after a failed break-out.
Another stock that I tweeted about was ATVI. This daily chart shows that ATVI failed its recent attempt at a GLB and found support at its lower 15.2 Bollinger Band and 30 day average (red line). With the weak market on Friday, ATVI closed below its 30 day average. I will exit if it closes below its lower Bollinger Band, around 37.
Meanwhile this market is getting very weak. Without a strong up day Monday, the QQQ short term trend (U-17) will turn down and the GMI may issue a Sell signal. The only thing keeping me in this market is my expectation for a strong end of month and end of quarter rally with mutual fund window dressing. Also, the market indexes look very short term oversold to me. However, we may have to first get through the vote in Great Britain and that may totally destroy the chances for any end of quarter rally. So this is time for me to be very vigilant and to have an exit strategy in place.
ATVI is showing a lot of strength as a BOS stock finding support on its lower Bollinger Band and its 30 day average (red line). Black volume spikes suggest institutional buying. Next hurdle, breaking through its all-time high at its green line (green line break-out, GLB) and holding it.
The QQQ completed its 16th day of its short term up-trend.No tags for this post.
While my short and long term market trend indicators show an up-trend, my modified Guppy charts of the SPY and QQQ paint somewhat different pictures. My modified Guppy chart plots 6 shorter term and 6 longer term weekly exponential moving averages plus a dotted line showing each weekly close. This weekly chart of the SPY shows a clearly developed RWB up-trend. All shorter averages (red lines) are well above rising longer term averages (blue lines) with a white space separating them.
Nevertheless, the GMI remains at 6 (of 6). The current decline may be setting up for a nice snap back rally as we get end of quarter mutual fund window dressing at the end of June. And then on to 2nd quarter earnings. So I am watching the popular growth stocks for good entries and will tweet about stocks I think are bouncing on support (BOS). However, I will not post on this blog again until Wednesday night.
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