I wrote yesterday that it was critical that Tuesday’s bounce up off of support needed to hold on Wednesday to continue the short term up-trend. It did not, with the SPY and DIA leading the QQQ lower. Tuesday’s bounce was totally reversed. I am largely in cash in my trading accounts now as I wait for the dust to settle. (During Tuesday’s bounce, I had closed out my hedge in SQQQ.) So many people have been counting on a strong end of year. This weakness could set that up, but I am not going to bet on it.
One of my few remaining positions is a biotech which Judy alerted me to years ago. It rose on Wednesday, indicating considerable relative strength. Here is the daily chart for NVAX.
dr wish, at what levels do you consider the short ratio to be a factor to watch for when considering initiating shorts? is >20% considered extreme? i remember capturing that from yahoo finance…thanks!
A few question on the GMI timing chart you had posted a while ago.
1. Is it based only on GMI-1? And not on GMI-2?
2. Is there any additional weight given to #3 in GMI-1 (QQQ over 30dma) in plotting the timing chart? I recall an occasion when though GMI-1 had flashed a buy, you were not yet long the market. I did not understand why?
3. Buy signal is GMI-1 => 4 for two consecutive days and sell signal is GMI-1 <= 2 for two consecutive days?
4. The buy and sell signals are executed on the third day following the "two consecutive days" requirement?
thanks
GMI counts 6 components equally. It issues a sell signal when it is <3 for two days and a buy when it is >3 for two days. The GMI will likely be <3 for second day on Monday = Sell signal. GMI-2 is not used in the buy and sell signals.
I do not focus on short ratio.