37th day of $QQQ short term up-trend–extended?

GMI

6/6

GMI-2

8/8

What is the GMI?
 

WORDEN T2108

70%

All of my GMI indicators remain positive. Since the GMI Buy signal on 4/22, the QQQ has advanced +9.3%, the SPY is up +5.5% and the DIA is up +3.4%.  The QQQ leveraged ETF’s are up:  QLD +19.4% and TQQQ +30.5%.   One of the best ETF performers has been SOXL, up +34.5%. During this same time period, AAPL is up +23.8%. The TQQQ beat all Nasdaq 100 stocks but VRTX, which was up +44.7%.  Anyone hold VRTX since April 22? Once again I see the value of buying and holding the 3X leveraged ETF during a GMI identified up-trend, rather than trying to identify in advance the rare individual stock that will outperform it.

This daily chart of the QQQ shows that its  pattern from the past week resembles one from last May (the areas in the green ovals).  Note that the 15.2 Bollinger Bands (BB) constricted and then broke out into an expansion with the upper and lower bands moving apart.   The QQQ is currently climbing its rising upper BB.  In May, this pattern lasted 4 days before the index leveled off for about one week.  On Thursday, the current BB expansion completed its 5th day with  QQQ climbing its upper BB. Tuesday’s and Thursday’s closes were outside the BB, often a sign of being extended.  Note in this chart that the QQQ has closed above its top BB only three times. I would  be surprised to see the QQQ close outside its top BB again on Monday…….

QQQdaily07032014

The GMI remains at 6 (of 6):

GMI07032014

 

 

36th day of $QQQ short term up-trend

GMI

6/6

GMI-2

8/8

What is the GMI?
 

WORDEN T2108

71%

Be careful.  A lot of stocks I follow are extended and reversed down on Wednesday.

35th day of $QQQ short term up-trend

GMI

6/6

GMI-2

8/8

What is the GMI?
 

WORDEN T2108

75%

This market is getting red hot–T2108 is at 75%. Major indexes traded above their top Bollinger Bands on Tuesday. I am raising stops.  I do not want to give up a lot of my gains.

34th day of $QQQ short term up-trend; $GLD rising again

GMI

6/6

GMI-2

8/8

What is the GMI?
 

WORDEN T2108

72%

This daily GMMA chart shows the renewed strength in GLD. All of the short term averages are above the rising long term averages (blue lines). It also shows a beginning RWB pattern. Click on chart to enlarge.

GLDGMMA06302014

End of 2nd quarter on Monday; $SPY and $QQQ in Stage 2 Up-trends–with $AAPL

GMI

6/6

GMI-2

8/8

What is the GMI?
 

WORDEN T2108

71%

All GMI components are positive.

GMI06272014SPY remains in a Stage 2 up-trend (weekly charts):

SPYweekly06262014As is the QQQ:

QQQweekly06272014

As is AAPL.

AAPLweekly06272014See you at my AAII work shop on July 19?

32nd day of $QQQ short term up-trend

GMI

6/6

GMI-2

8/8

What is the GMI?
 

WORDEN T2108

68%

End of quarter is on horizon.

31st day of $QQQ short term up-trend; $AAPL to pop?

GMI

6/6

GMI-2

6/8

What is the GMI?
 

WORDEN T2108

70%

AAPL found support at its lower BB and 30 day average (red line) on Wednesday.  If all is well with the stock, I expect it to rise from here, at least to its top BB, around 94.  Click on chart to enlarge.

AAPLdaily06252014

30th day of $QQQ short term up-trend

GMI

5/6

GMI-2

6/8

What is the GMI?
 

WORDEN T2108

67%

GMI and GMI2 weakening but still out of trouble.

29th day of $QQQ short term up-trend

GMI

6/6

GMI-2

7/8

What is the GMI?
 

WORDEN T2108

70%

Window dressing period is here.

RWB patterns in $QQQ across time periods; $PTLA and $STZ; See you in July?

GMI

6/6

GMI-2

7/8

What is the GMI?
 

WORDEN T2108

70%

I have written before that an RWB pattern, where short term averages (red lines) are well above rising longer term averages (blue lines) such that there is a white space in between them, is typical of rocket stocks.  I decided to create these modified GMMA charts for four time periods to get an idea of how the QQQ is likely to behave.

The first chart shows the longer term weekly chart, which is exhibiting a classic RWB pattern. It looks like the QQQ has emerged from a nice consolidation period where the red lines converged into a tight pattern (indicating little price change) well above the blue lines: (click on charts to enlarge)

QQQGMMAwkly06202014

The daily chart shows a similar RWB pattern and the emergence of QQQ from a base at the end of May:

GMMAQQQdaily06202014The hourly chart shows very recent congestion, but it looks like the red lines are back above the blue lines and are turning up.  Thus the QQQ ended Friday with a small show of strength, but the QQQ needs to break the 93 level to come out of this short term consolidation.

QQQGMMAhourly06202014Finally, the 5 minute chart shows more clearly the end of day strength on Friday, with the red lines breaking above the blue lines in a RWB pattern.

GMMAQQQ5minute06202014

So what does all of this mean to me?  Consistent with the GMI and its Buy signal from April 22nd, the market, as measured by QQQ, looks like it remains in a strong up-trend.  As a longer term swing trader I  focus on the weekly and daily charts.  The hourly and 5 minute charts are useful only if I want to pinpoint areas for  entries or where to put sell stops.  I sometimes have TC2000 send me an automatic email alert when the price of the index I am following crosses below or above one of these key moving averages…..

By the way, my stock buddy, Judy, alerted me to a new drug stock she is excited about and I bought a small number of shares. (Judy had bought the stock much lower because if she likes a concept she is willing to buy early and wait for a rise.) It may be worth researching this very speculative stock, PTLA, especially if it can break above its green line top, around $31. PTLA is developing some promising new drugs. Here is PTLA’s weekly chart. I think it to be an important technical signal when a recent IPO forms a multi-month base and then breaks to a new all-time high. I am watching PTLA very closely for signs of a high volume break-out above 31.

PTLAweekly

I also took a small position last week  in STZ, as it broke out of a cup and handle consolidation on high volume. Check out this weekly chart.

STZweekly06202014

If you are interested in learning more about my strategies for tracking the market, you may want to attend the July AAII work shop that Alan Ellman and I are presenting in Virginia on July 19.  Alan is very skilled at teaching people how to sell covered call options on their stocks to earn income.  He makes the process relatively easy to understand. For those of you who cringe at the mention of the word “options,” you need to know that writing covered calls is considered a very conservative way to use options.  Anyone who keeps a portfolio of stocks and does not sell covered calls on them is potentially missing an opportunity to earn $$$ from their stocks at the same time as they lower potential losses if their stock declines. Check out Allan’s books on the lower right of this page. I hope to see many of you there.  Here is the link to register for the meeting……

And here is the weekly GMI table.  Let me know if you find any errors, Rick  :-)

GMI06202014

 



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