It is interesting that the media pundits, including Cramer, are dubious about this being the bottom of the decline. Bearish talk like that makes me more optimistic. But, alas, I trade on the market’s behavior, not on the media’s hopes and fears. There were three 52 week new highs and 170 new lows in my universe of 4,000 stock on Thursday. Buying stocks at or near new highs is a losing proposition now. AAPL. GMCR are holding up, but for how long? I remain in cash in my IRA and margin account. I am hoping to get out of some of my university pension mutual funds on Friday. I want to reduce exposure to this market. I must admit, though, that the weekly GMMA chart below still does not look very bearish right now. All shorter moving averages (red) are still above or just touching their longer term averages (blue). We are either in a mild correction or at the beginning of a major decline. (Click on chart to enlarge.) Time will tell……..
Dr. Wish
Day 6 of QQQ short term-down-trend; T2108 = 10%
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.
5th day of QQQ short term down-trend; in cash
Bottoms take a while to put in. I do not trust this one yet. We are only five days into the new short term down-trend. But with the T2108 at 8% we are in extremely oversold territory. I am in cash, safely and calmly watching from the sidelines.