We completed the 6th day of the new QQQ down-trend on Wednesday. The Worden T2108 indicator is at 10%, up a little. I wish I had the courage to buy a little of QLD. The Worden T2108 indicator rarely goes into single digits and is a sign of an extremely oversold market. I saw this interesting article about technical analysis this morning. Technical analysis always works better than fundamental analysis when markets decline a lot. Technical analysis tracks human psychology and behavior. Fundamental analysis is based on company “facts” and subjective interpretations about their business.
Thanks for sharing the link to the article on technical analysis. You have an excellent blog! Keep up the good work.
The T2108 explains the status or condition of the market at a point in time, it does not really give a buy signal. It is not like a candlestick pattern or a moving average crossover or an IBD follow-thru day.
Perhaps with an IBD “day 1” occurring on Tuesday, waiting for the follow-thru day to take place between days 4 and 10 would be that buy “signal”?
I use the T2108 to avoid doing the wrong thing at an extreme. I will move back into the market when the GMI goes to 4 or above. I also pay a lot of attention to my short term trend count. It is too early for me to know whether this will turn into a multi-month decline. It all depends on what happens after the rebound rally is tested.
This past week I got stopped out of stocks or ETFs or sold out things I had a profit in, only to see them all bounce back today quite a lot! Even our doing well in gold clearly bothered the powers that be as they raised the margin and made Gold go down today. I sure would like to see a stock transaction tax to cut down on the schizophrenic volatility induced by the big boys on Wall Street.