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8th day of $QQQ short term down-trend; $AAPL below neckline

GMI

1/6

GMI-2

1/8

What is the GMI?
 

WORDEN T2108

23%

I should have noted yesterday that AAPL had closed Friday below the neckline of its head and shoulders top pattern. If this break down holds, we could see a decline to around $80.

AAPL12212015

7th day of $QQQ short term down-trend; 100% in cash

GMI

1/6

GMI-2

2/8

What is the GMI?
 

WORDEN T2108

20%

The GMI remains on a Sell signal and I am 100% in cash.  The major indexes are in Stage IV Weinstein down-trends. I see no reason to be in this market except on the short side. But the holiday season is a nice time to just take a break from trading. The NYSE is in a BWR down-trend. Note the transition from an RWB up-trend to a BWR down-trend.

NYSE12202015

The Dow Jones 20 Transportation index looks even worse.

DJ2012202015And the SPY is not far behind.

SPY12202015

And then there is the wounded leader, AAPL.

AAPL12202015To survive in this business, one must protect capital and not fight the trend…..

GMI12182015

6th day of $QQQ short term down-trend

GMI

1/6

GMI-2

3/8

What is the GMI?
 

WORDEN T2108

26%

Market looking very weak and treacherous. I remain almost all in cash.

5th day of $QQQ short term down-trend; $AAPL weak, $ALKS has GLB

GMI

2/6

GMI-2

7/8

What is the GMI?
 

WORDEN T2108

30%

Last Sunday night I posted:

“With the major indexes so oversold, it is very possible that they will bounce on Monday. IBD  reports that the put/call ratio was 1.19 on Friday, showing extreme bearishness among option traders, and at a level at which bounces typically occur.”

IBD has now called the beginning of a new market up-trend, after a very brief market correction. The key question remains as to  how far this bounce will go. No one knows for sure, but with end of quarter and year end mutual fund window dressing almost upon us, we could see some strength for a few weeks. The QQQ closed at 113.98 but there is considerable resistance not far above, around 116. I am also concerned with AAPL’s continuing technical weakness, although it did find support at oversold levels on Wednesday.

AAPL12162015

TC2000 sent me an alert for a GLB by ALKS on Wednesday. ALKS rose to an all-time high on above average trading volume.

ALKS12162015

 

4th day of $QQQ short term down-trend; $AAPL still weak

GMI

1/6

GMI-2

2/8

What is the GMI?
 

WORDEN T2108

22%

AAPL continues to weaken–an ominous sign for the market.

AAPL12152015

3rd day of $QQQ short term down-trend; bounce has begun

GMI

1/6

GMI-2

2/8

What is the GMI?
 

WORDEN T2108

16%

The expected bounce from oversold has begun. There were 657 new lows on Monday and 58% of the Nasdaq 100 stocks hit a very oversold level.

2nd day of $QQQ short term down-trend; market bounce and $AAPL H+S top likely

GMI

1/6

GMI-2

2/8

What is the GMI?
 

WORDEN T2108

17%

With the major indexes so oversold, it is very possible that they will bounce on Monday. IBD  reports that the put/call ratio was 1.19 on Friday, showing extreme bearishness among option traders, and at a level at which bounces typically occur. Given the Fed meeting this week, we could get a situation where people have already exhausted their selling in anticipation of a rate hike, and they decide to buy on the news. I am not in the prediction business, however, and will wait for the market to show its hand. What I would not do is to begin selling or shorting on Monday. Such actions may be preferable for me after the next bounce.

This GMMA weekly chart shows that the RWB pattern is gone and the  rebound from the summer decline may have ended. The SPY (dotted line) has now closed below all 12 of its moving averages. If the summer decline was the first leg down of a bear market, the next leg could be major.

GMMASPY12112015

But the QQQ, composed of nonfinancials and tech stocks, looks much stronger and remains in an RWB pattern.

QQQGMMA12112015Nevertheless, the AAPL head and shoulders top pattern I have been writing about appears to still be possible. Note the resistance at the declining 30 week average (red line). Stage IV decline anyone?

AAPL12112015

The GMI remains on a Sell signal. The SPY and QQQ have now closed below their critical 10 week averages.

GMI12112015

 

New $QQQ short term down-trend

GMI

1/6

GMI-2

3/8

What is the GMI?
 

WORDEN T2108

26%

I am more confident of a change in trend after it has lasted 5 days. The GMI has also flashed a Sell signal but is also subject to whipsaw moves. I am on the sidelines waiting for the trend to define itself more clearly.

$QQQ short term up-trend in jeopardy

GMI

2/6

GMI-2

4/8

What is the GMI?
 

WORDEN T2108

27%

Market looking mighty weak to me. GMI could issue a Sell signal with a weak day on Thursday.

46th day of $QQQ short term up-trend; Dow theory warning?

GMI

3/6

GMI-2

4/8

What is the GMI?
 

WORDEN T2108

31%

A lot of bounces off of support are failing. Time to be very defensive. This chart of the Dow Jones Transportation average shows it to be in a Stage IV decline. Is this another Dow Theory sell signal?

DJ2012082015



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