Short term trend still in doubt; in cash and gold

GMI4/6
GMI-24/9
T210868%

According to the way I define it, the QQQQ short term down-trend   completed its second day (D-2) on Wednesday.   I will be more confident of the new down-trend if it persists for 5 days. The longer term   trend is still up, but there has been a lot of back and forth around the 30 day average.   The QQQQ appears to be finding support around its 50 day average, now at 56.86.   A close below this important average would signal important short term weakness in tech and growth stocks.   IBD already considers the market to be in a correction and cautions readers against making new buys right now.   With stock index futures well under fair value this morning, it looks like we may get a test of critical technical support on Thursday. While I remain fully invested in mutual funds in my university pension, I am largely in cash and in a little gold (DGP) in my IRA account.

A number of people have asked me what stocks I monitor for an indication of how the market leaders are doing.   They are: PCLN,AZO,AAPL,BIDU,CMG,AMZN,GOOG,NFLX,FFIV.   The last 4 are showing weakness, closing below their 10 week averages. I am cautious now, given the   signs of short term weakness in the leaders and in my other indicators.

Leaders weaken; no clear short term trend

GMI5/6
GMI-25/9
T210869%

As you know, I have a list of 9 high price market leaders that I like to monitor.   When the leaders start to weaken, the rest of the market eventually follows. Well, 4 of the 9 leaders have now closed below their critical 10 week averages.   They remain in longer term, Stage 2 up-trends, but are not powering higher now.   This is a good time for me to be to be conservative.   I own only the GLD ETF and am waiting for the market to show a clear short term trend.   The longer term trend remains up.   Sometimes it is better to sit on the sidelines and enjoy the show.

GMI and GMI2 both 4/6; short term trend unclear; RWB: GLD

GMI4/6
GMI-24/9
T210861%

The QQQQ is sitting on its 10 week average.   A close below this critical average would be significant.   The major indexes I follow (SPY, QQQQ) have been above their 10 week averages for about 26 weeks.   I typically can make money in the market only when these indexes remain above their 10 week averages.   I am in cash and still hold a position in gold.   The longer term trends remain up and my university pension remains invested in mutual funds.   The gold ETF, GLD, remains in a strong up-trend with the 4wkavg>10wkavg>30wkavg. Click on weekly chart to enlarge.

Gold has held the bullish RWB pattern for 2 years, with all short term averages (red) well above their longer term averages (blue).