Trend change imminent; World markets in free-fall

GMI

2/6

GMI-2

3/8

What is the GMI?
 

WORDEN T2108

36%

The GMI registered 2 after Friday’s close and will likely be 2 or less again on Monday, triggering a GMI Sell signal. If so, I will close out my few longs and accumulate a leveraged inverse ETF (SQQQ). The T2108 is at 36% and has a long way to fall before our markets are at the level where declines typically end. (See weekly chart below.)

GMI12122014T2108wkly12142014

I am very concerned that many of the world’s markets are in free fall and we tend to pretend that the U.S. market is immune from the fall-out. Do we really think that the U.S. economy exists in its own cocoon? Take a look at the recent weekly charts of some of the foreign ETF’s:

TRF: Russia/East Europe:

TRFEWZ: Brazil:

EWZEWG: Germany:

EWGEWC: Canada

EWCEWW: Mexico:

EWWUSX–X: China:

USX--XCEE: Central Europe, Russia, Turkey:

CEEAre we worried yet? Or maybe it’s just a benign and temporary oil price precipitated scare….. (would you like to buy a bridge?) I’m not going to wait around to find out. (I have told you I trade like a chicken.)

 

 

34th day of $QQQ short term up-trend; $ALDR-another biotech green line break-out

GMI

4/6

GMI-2

3/8

What is the GMI?
 

WORDEN T2108

45%

QQQ, DIA and SPY  are  all on support. Friday will tell the resolution. Meanwhile, in the midst of all of this market volatility, ALDR had a  green line break-out to an all-time high on Thursday.

ALDR12112014

$QQQ short term up-trend in jeopardy; mainly in cash; $NVAX strong

GMI

4/6

GMI-2

3/8

What is the GMI?
 

WORDEN T2108

45%

I wrote yesterday that it was critical that Tuesday’s bounce up off of support needed to hold on Wednesday to continue the short term up-trend. It did not, with the SPY and DIA leading the QQQ lower. Tuesday’s bounce was totally reversed. I am largely in cash in my trading accounts now as I wait for the dust to settle. (During Tuesday’s bounce, I had closed out my hedge in SQQQ.) So many people have been counting on a strong end of year.  This weakness could set that up, but I am not going to bet on it.

One of my few remaining positions is a biotech which Judy alerted me to years ago. It rose on Wednesday, indicating considerable relative strength. Here is the daily chart for NVAX.

NVAX12102014

 

32nd day of $QQQ short term up-trend

GMI

6/6

GMI-2

3/8

What is the GMI?
 

WORDEN T2108

55%

Stocks reversed up off of support. It is critical to this short term up-trend that these levels hold on Tuesday.

30th day of $QQQ short term up-trend

GMI

6/6

GMI-2

3/8

What is the GMI?
 

WORDEN T2108

54%

The GMI-2 has fallen to 3, reflecting the short term weakness in the major indexes. There were more new lows than new highs on Monday. I still have calls on SQQQ to hedge my long positions. Be careful!

9 Biotechs and 1 ETF near green line break-outs (all-time highs): $AGIO,$ALXN,$BSTC,$CMRX,$ENTA,$ILMN,$JAZZ,$KITE,$RGLS,$BIB

GMI

6/6

GMI-2

6/8

What is the GMI?
 

WORDEN T2108

59%

Most of the stock gurus whom I respect have written that one can make the most money by investing in  companies that have visionary, often revolutionary products. When Nicolas Darvas made millions  in the 1950s he invested in rockets, as the country became involved in a race to space. Other more recent examples are the PC revolution, the internet, and now Elon Musk’s foray into electric cars, solar energy and commercial space travel. Today we are in the middle of a huge revolution in biotechnology as scientists begin to use their understanding of the human genome to make new drugs and medical  treatments never thought possible. There is  a revolution occurring in the biotechnology sector and astute investors who own these firms will be well rewarded when a new drug or breakthrough treatment is announced.

A major way that I have developed to alert me to promising new stocks that are being heavily accumulated is my green line technique. On a stock’s monthly chart I draw a green line at the highest price the stock has ever reached and has not surpassed for at least 3 months.  The green line signifies the top of a base or consolidation period at which the stock has rested for a few months. When a stock pushes through its green line top, especially on unusually high trading volume, I take notice.

I have put together a list of 9 biotech stocks and one ETF that have recently passed their green line tops. These are stocks which I then research to assess the probable developments that are causing buyers to push them to all-time highs. Biotechs often do not have earnings. It is the possibility of future earnings to be derived from newly developed exciting products that ignite buyers’ imaginations. I just want to hitch a ride on a rocket. By the way, I own some of these stocks.

Their weekly charts, in alphabetical order:

AGIO12072014ALXN12072014BSTC12072014CMRX12072014ENTA12072014ILMN12072014JAZZ12072014KITE12072014RGLS12072014And one leveraged ETF…..

BIB12072014The GMI remains at 6 (of 6):

GMI12052014

 

29th day of $QQQ short term up-trend

GMI

6/6

GMI-2

6/8

What is the GMI?
 

WORDEN T2108

59%

28th day of $QQQ short term up-trend; $NVAX and avian flu in Canada

GMI

6/6

GMI-2

7/8

What is the GMI?
 

WORDEN T2108

62%

Keeping an eye on NVAX, now that bird flu is picking up in Canada. Judy told me about NVAX years ago.

NVAXdaily12032014

27th day of $QQQ short term up-trend

GMI

6/6

GMI-2

6/8

What is the GMI?
 

WORDEN T2108

60%

26th day of $QQQ short term up-trend

GMI

6/6

GMI-2

6/8

What is the GMI?
 

WORDEN T2108

57%

QQQ had a down day with the highest daily trading volume since 10/31. Let’s see if it can do 2 in a row.



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