The QQQ bounced up from oversold last week and is closing the gap down that occurred on May 23rd. I am watching closely to see if it can break above 58.05 and remain there. If the QQQ can’t and bounces down off of that area, I expect a continuation and perhaps, a deepening of this short term down-trend. 
Friday marked the 5th day of the short term down-trend, and once a trend lasts this long, it usually continues for a bit. The QQQ has now closed below its important 10 week average, while the SPY bearly (pun intended) remains above its 10 week average. Both indexes are bouncing off of oversold levels, so the rise could last a few days. With the GMI at 2, I remain mostly in cash with a few hedged long positions. IBD continues to call the market in a correction and remains cautious about making new buys. Since the QQQ peaked on April 27, the Nasdaq 100 index has declined 3% and 64% of its component stocks have declined; only 16% are up 5% or more. During the same time period, 58% of the S&P500 component stocks have declined; 13% are up 5% or more. Why fight these odds by going long stocks?
Hello Dr. Wish,
Thanks for the blog and the post. You say – “Both indexes are bouncing off of oversold levels,…”
How do you measure Oversold levels? T2108 reach 37. Do you consider that Oversold? What else do you look at?
Thanks for all you do for us.
Carlos
Perhaps a follow-thru day will take place this week and then IBD will change its outlook.
Stoichastic and RSI indicator is an important overbought/oversold indicator