8th day of $QQQ short term up-trend; $AWAY, $ICLR green line break-outs

GMI

6/6

GMI-2

7/8

What is the GMI?
 

WORDEN T2108

63%

AWAY had a large volume green line break-out above its 2011 high on Thursday.  AWAY reported earnings on 2/19. See daily chart below.

AWAYgreenlioneAs did ICLR:

ICLRgreenline

7th day of QQQ short term up-trend; TSLA green line break-out surging

GMI

6/6

GMI-2

7/8

What is the GMI?
 

WORDEN T2108

60%

TSLA, which had a green line break-out last week, rocketed higher Wednesday evening after it released earnings.  Check out this weekly chart.

TSLAweekly02192014

6th day of $QQQ short term up-trend; FB climbs after green line break-out–writing covered weekly calls on FB and GLD

GMI

6/6

GMI-2

8/8

What is the GMI?
 

WORDEN T2108

65%

All of my indicators remain positive.

Given the strong market up-trend, I am looking for some stocks in strong Stage 2 up-trends which have recently broken above their green line base. Facebook (FB) is a perfect example, as this weekly chart shows.

FBweekly02182014FB broke above its green line top (all-time high base of at least 3 months) in September, re-tested that line in November, and now is in a nice up-trend.  Also positive is that FB came public in the last 2 years and has  earnings that are increasing at triple digit rates. I bought some FB and sold weekly  out of the money calls on it.  I am content to collect time premiums for FB that equal  more than 1% each week.  Writing weekly covered calls on stocks and ETF’s appeals to me because the position lasts only a week and can deliver large time premium income. Every Friday I can  reassess whether I want to repeat the trade again.  Alan Ellman and I will be doing a  workshop on covered calls for the DC Metro AAII Chapter  in July. Alan’s books, listed on the lower right of this blog page, are a great way to teach oneself about covered calls.

I am also writing covered weekly  calls on the gold ETF, GLD.  Gold looks to me to be in the beginning of a  Stage 2 up-trend. Check out this weekly chart. GLD is now above its critical 30 week average. It will be in a full Stage 2 up-trend if the 30 week average (red line) curves up. Meanwhile, I am content to collect time premium income each week.

GLDweekly02182014Click here for a CBOE list of weekly options on stocks and ETFs.

Here is a short article about the technique.

Further Thoughts for DC Metro AAII; $QQQ remains in Stage 2 up-trend; $TSLA– green line break-out

GMI

6/6

GMI-2

8/8

What is the GMI?
 

WORDEN T2108

63%

I spent a wonderful morning Saturday presenting a workshop to the DC Metro AAII Chapter. The audience of primarily Boomers was very appreciative of my rather conservative presentation. I stressed the desirability of focusing more on ETF’s than individual stocks in order to lessen volatility and stress levels.

As always, I recalled some points I wish I had made.  First, all should investigate the use of U.S Government I-bonds for ultra safe money.  These are U.S. savings bonds that adjust every 6 months to the level of inflation. Thus they are very safe and their yield will rise if interest rates do.  They will not fall in value like regular bonds can when rates rise. Read all of the rules on I-bonds here. I believe they are better than CD’s or savings accounts. The current yield is 1.38%

I also wanted to tell new readers that they can have the GMI stats mailed to them every day by entering their email address in the box to the right of this post. I do not release your email address to others.  The box by which to subscribe looks like this:

Screen shot 2014-02-17 at 7.26.09 PMYou may also view my Houston TC2000 webinar from 2012 by clicking the link to the right side of this page.

As to this market,  all of the indicators in the GMI and GMI-2 are positive.  Furthermore, the GMI flashed a Buy Signal on 2/12.  Friday was also the 5th day of the new QQQ short term up-trend.  The longer term up-trend is very intact.  Look at the Stage 2 up-trend in the weekly chart of the QQQ.  The QQQ is nicely above it rising 30 week average (solid red line).

QQQweekly02142014Hopefully this nonsense about the Dow chart looking similar to its chart from 1929 has dissipated.  This market looks no way like the one in  1929 leading up the the great crash.  But the market climbs a “wall of worry” so bring on the whiners.  I will become concerned when the pundits start saying that the market has nowhere to go but up….

I have been talking about a bottom in gold (GLD ETF) for several weeks.  Last week GLD closed back above its 30 week average for the first time since January, 2013.  I think it is early, but we might be seeing the beginning of a Stage 2 up-tend. I have been buying GLD and writing weekly calls on the position. The return is about 3% per month on my investment. Check out this weekly chart of GLD. Note the double bottom around 114.50 and the flattening 30 week average.

GLDweekly02142014Finally, TSLA had a green line break-out last week.  It will be interesting to see if the stock surges after earnings are released this week.

TSLAweekly02142014

Here are the GMI stats: (click on to enlarge)

GMI02142014

 

4th day of new $QQQ short term up-trend

GMI

6/6

GMI-2

8/8

What is the GMI?
 

WORDEN T2108

60%

All of my indicators are positive.If QQQ holds on Friday, I will add to my position in TQQQ.

 

GMI: Buy; 3rd day of $QQQ short term up-trend; $NPSP breaks out

GMI

6/6

GMI-2

8/8

What is the GMI?
 

WORDEN T2108

56%

All of my GMI indicators are now positive. I believe NPSP had a cup and handle break-out on Wednesday.  Check out this weekly chart. NPSP reports earnings om February 18.

NPSP02122014

I hope to see you at my AAII workshop this Saturday.

GMI hits 5 (of 6); Dr. Wish speaking at DC Metro AAII Chapter meeting this Saturday

GMI

5/6

GMI-2

8/8

What is the GMI?
 

WORDEN T2108

56%

Tuesday was the 2nd day of the new QQQ short term up-trend. Another strong day Wednesday will lead to a GMI Buy signal.

I am presenting a workshop this Saturday, February 15,  for the DC Metro Chapter of  AAII.  Click here for informationClick here to register. I hope to meet many of you there!

New $QQQ short term up-trend; $GLD still turning up? $TSLA has green line break-out

GMI

3/6

GMI-2

8/8

What is the GMI?
 

WORDEN T2108

50%

Monday’s close marked the beginning of a new QQQ short term up-trend.  The GMI remains on a Sell signal for now, however.  I got out of SQQQ and bought a little TQQQ.  If the new up-trend persists through Friday, I will be more confident of this new up-trend………..

Meanwhile GLD still looks like it is turning.  In this daily chart, note the 30 day average (red line) is now curving up. But given that GLD touched its upper 15/2 Bollinger Band on Monday, it may pull back a little.

GLDdaily02102014

TSLA had a green line break-out on Monday on above average volume.  Check out this daily chart. (click on to enlarge)

TSLA02102014

Is this the end of the correction? 14 stocks at all-time highs!

GMI

2/6

GMI-2

7/8

What is the GMI?
 

WORDEN T2108

49%

The truth is that no one knows for sure.  IBD does still label the market in a correction. As I define it, the QQQ short term down-trend completed its 10th day on Friday.  Another flat or up day on Monday will end the down-trend and begin a new QQQ short term up-trend. I am  most certain of a change in trend when it persists for at least 5 days, however.  I sold most of my SQQQ on Friday and will sell the rest on Monday if the QQQ holds.  I will then buy a very small position in TQQQ and will only add to it at a higher price later in the week, probably on Friday. If a new short term up-trend begins and it is for real, then I will have many days on which to accumulate TQQQ.  The key is to not rush in but to ease into the new move.  On the other hand, if the QQQ weakens a lot on Monday, I will buy back some more SQQQ and ride the continuing down-trend.  One must be agnostic in this business and ride whatever trend becomes apparent…..

Newhighs02082014As my readers  know, I do not like to go long stocks in a general market down-trend.  I find it to be very useful, however, to watch the new high list during declines because stocks appearing on it are exhibiting unusual strength. Any stock that can come through a correction and trade at a new high is demonstrating a lot of technical support. It is also much easier to find winners when there are only a handful of new highs. On Friday, only 14 stocks (out of 6,000) came up in my new 52 week high and good fundamentals TC2000 scan.  All had recent quarterly earnings up at least 25% and  increases in revenues.  I think these stocks are worth researching for possible purchase in case a new up-trend begins. They appear to the left, sorted by recent EPS change, with the biggest earners at the top.  Thus, the top six stocks each had quarterly earnings up more than 100%.  Funny how stocks with big earnings increases appear on the new daily high list even during a market correction. It is noteworthy that all of these stocks are at or very close (GMCR) to trading at their all-time highs.  Now that is a show of strength…….

I prefer to buy strong stocks when the GMI is on a Buy signal.  The GMI closed Friday at 2 (of 6) but the more sensitive and short term GMI-2 rose to 7 (of 8). The GMI flashed a Sell signal at the close of trading on  1/27 and remains so. I am therefore mainly in cash in my trading accounts but I do have a small position in SQQQ and GLD.  My position in GLD is based solely on the technical pattern.  It just looks like it is in a Stage 1 base. Note from this table that the QQQ has now closed  back above its 10 week average, a very promising sign of strength. We will learn this week if the short term decline is likely over. Do not forget, however, that the QQQ remains in a longer term Stage 2 up-trend, as defined by Stan Weinstein.

GMI02072014

 

 

9th day of QQQ short term down-trend

GMI

1/6

GMI-2

3/8

What is the GMI?
 

WORDEN T2108

44%

It remains to be seen whether this bounce will last and turn into a new short term up-trend.  With the 30 day average of the QQQ curving down, I expect more weakness. There were only 72 new 52 week highs in my universe of almost 6,000 stocks on Thursday.



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