6th day of QQQQ short term down-trend

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It was nice to be mainly in cash during Tuesday’s decline.     I own a little QID, which rises 2X as much as the QQQQ falls.   I will wait for the short term trend to turn up again before I acquire any long positions.   The key to success in the market   is to lose little during market down-trends. As long as the QQQQ remains below its 10 week average, I will not buy growth stocks. (Click on weekly chart to enlarge.) The longer term trend remains up, in a Stage 2 advance.

7 thoughts on “6th day of QQQQ short term down-trend”

  1. “Nice to be out in this week’s downtrend”. Psychological fear? However, in and out of market costs fees, and you lose some of the momentum when you re-enter. I feel the short term correction is overdone compared to the long term positive fundamental reality. So, I am weathering the short term volatility until the bull rally restarts. I am staying the course with a stop ABOVE my entry point in SXCI!!!

  2. I think one advantage us individual investors have is agility. And with only a few positions at any time, the trading costs aren’t too prohibitive.

    Dr. Wish – do you pyramid your buys when you enter a position? A lot of folks seem to recommend that approach, but I always feel comfortable making my biggest purchase once the first one is shown to be correct (i.e. I would buy $1k, then $4k, then $3k, then $2k to build a $10k position if a stock continues to do well). What is your general approach to building a position?

  3. You are correct that with discount brokers, transaction costs are irrelevant. I never let them keep me in a losing position. Losses dwarf commissions. I use both types of buying techniques, large initial buy and accumulating a position in stages. It depends on my confidence in that trade and the market’s trend.

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