New $QQQ short term down-trend–but I don’t trust it

GMI4/6
GMI-23/8
T210858%

While my objective criteria for a short term down-trend have been met, I do not trust it.   If you take a look at this daily chart you will see that each time the QQQ bounced from its lower channel trend line, it was also bouncing up from the lower Bolinger Band (BB).   The space between the upper and lower bands is shaded gray in this chart. To me, the lower BB is a better indicator of potential support.   So on Wednesday the QQQ bounced off of its lower BB, suggesting that we will now get a rise in the   QQQ, but only to the top BB. We are headed for a BB pinch (thanks $Bill). At some point the BB will break up or down with a new move. I have also indicated before that I tend to trust a new short term trend only when it reaches day 5. Since 2006, 41% of short term down-trends lasted 5 days or less.   So, even though the GMI remains on a Buy signal, I am waiting mainly on the sidelines until Mr. Market reveals his true direction. Click on chart to enlarge.

QQQdaily05072014

 

1 thought on “New $QQQ short term down-trend–but I don’t trust it”

  1. it’s very hard to trust these markets when they are clearly manipulated — most likely by the Fed and/or Banks who have funnelled QE into propping up balance sheets of the large banks, the stock market and the real estate markets.

    Michael Lewis, who wrote the great book “The Big Short” about the Real Estate debacle that occured last decade, recently wrote in his new book “Flash Boys” about how the markets are rigged by similar players. Of course you have the head of the SEC, who looks like a sack of potatoes, come out a few weeks later and says from script that our markets are ‘not rigged’. Who do you trust, Michael Lewis, who exposed the corruption that went on at high levels in our Fed Gov’t/Big Banks to create the housing debacle, or a Fed Gov’t official?

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