The QQQQ is resting right on support. A decline on Monday would signal to me the beginning of a new short term down-trend. There were only 7 new highs and 8 new lows in my universe of 4,000 stocks on Friday. GOLD broke to an all-time high last week and GLD, the gold ETF, closed back above its 10 week average. This is an ominous sign, with the dollar in a down-trend. Buying stocks at new highs may not be a good idea now. Friday was the 42nd day of the current QQQQ short term up-trend. The Worden T2108 is now down to 79%. And most troubling, only 24% of the Nasdaq 100 stocks have a MACD above their signal line.
A lot of my cash secured puts expired on Friday. I am going to wait to take on new positions in June options around June 1. Better to be defensive now and not give back all of the profits made since the March bounce. I am mainly in cash again.
Would you consider going short with some QID if we break support this week?
Hi Dr. Wish, do you use software to “back test” your trading strategies? Do you do that in your worden telechart software? Do you know of any other software that is good and inexpensive for this purpose?
Also, one suggestion for future strategy posts is advice on how to manage one’s position in a stock/ETF after deciding to buy it; for example, it would be useful to learn more on strategies for averaging up into a stock and selling the stock. It seems like what happens too often is I pyramid up, buying more stock as it rises, and then I end up being lightly invested during its rise (buying a little at a time) and heavily invested when it peaks and drops to my stop loss (after having purchased it over the past few months). Your strategy post on buying put options as insurance was interesting, and I’m interested in more strategy posts like that! Thanks.
you should clarify that when you say “GOLD closed at an all time high”, you are talking about the company with they symbol GOLD … and not the metal itself, which did not close at an all time high last week. GOLD (the metal) Spot price closed at 931.9 last week, below the 1033 it reached about 1 yr ago. Still GOLD, the metal, is in a long term uptrend, and likely to go higher.
1. I will get out of QLD and into QID if a down-trend develops.
2. I have manually back tested my strategies over the years. As a research analyst, I know how tempting it is to systematically test various strategies. But the pitfall is to become so engrossed in these sophisticated methods that one loses track of the primary goal of making $$$. I plan to post more tutorials in the future–thank you.
3.I intentionally put “GOLD” in caps to show I was not talking about the metal. Sorry for the ambiguity.
Professor,
How important is the IBD mutual fund index in your market index? Could the IWP ( iShares Russell Midcap Growth Idx) be substituted as a representative index for those of us without IBD access?
I have no idea of the correlation between IWP and the IBD mutual fund index. I have learned that as long as the IBD fund index is above its 50 day average I can make money going long growth stocks. Still, it is only one of the 6 indicators in the GMI.