The markets are going back and forth around the key support levels I monitor. With options expiration coming on Friday, I think the best course for me is to take very small positions until the short term trend becomes evident. With most first quarter earnings announcements already out there is less major news to move individual stocks. It is the expectation of better earnings that pushes stocks higher, but second quarter earnings will not begin to be released until April. We are in the relatively calm period between earnings releases. However, as we all know, major world events can also influence the short term course of the markets. I remain in a gold ETF and a little short the QQQQ. The longer term trends of the indexes I follow (SPY, DIA, QQQQ) remain up.
Dr. Wish
GMI back to 4; Raising cash and adding SQQQ and DGP
The market averages are very volatile and have come back down to critical support again. The new QQQQ short term up-trend is in jeopardy. I am raising cash in my trading account and am slowly wading into the ultra bearish QQQQ ETF, SQQQ. SQQQ is designed to go up 3x as much as the QQQQ (Nasdaq 100) declines. I enter the inverse ETF’s when the market indexes weaken. If a true down-trend develops, I will add to my position in SQQQ. SQQQ rose 4.7% on Tuesday, as the QQQQ declined -1.6%. By buying the inverse ETF’s, one’s account can grow as the market declines. It is very important to be cautious as I wait for the market to reveal its short term trend. The longer term trend remains up, for now.
I also own the ultra long gold ETF, DGP. DGP strives to rise 2X as much as gold does. DGP rose +3.4% on Tuesday as GLD rose +1.7%. Note that DGP (and GLD) is in a picture perfect Weinstein Stage 2 advance and has found support at the 30 week average (red line) repeatedly during the past 2 years. Click on weekly chart to enlarge.
QQQQ Short Term Up-trend resumes; Worden workshop coming to DC; RWB stock: PRGO
The GMI rose to 5 and the GMI-R to 7 on Monday. I began a new QQQQ short term up-trend count. I still will feel more confidence in the new up-trend if it reaches day 5. Nevertheless, it is okay for me to go long again in my short term account. My university pension account has remained 100% long in mutual funds the entire time. There were 367 stocks at new 52 week highs in my universe of 4,000 stocks on Monday, a sign of strength…
The students in my classes use the TC2007 stock charting program to analyze stocks. The Worden people, who offer the program, are coming to the Washington, DC area this Friday and Saturday. The one day workshop is free in the morning and will take place at the University of Maryland Conference Center in College Park. I use TC2007 to run all of my analyses and statistics. UMDSMC participants may want to attend the workshop on one of these days. It is how I learned to use the TC2007 software. I will attend the workshop on one of these days.
A stock on Monday’s new high list that is at its all-time high and and a RWB rocket stock is PRGO. Note in the weekly chart below that PRGO has appeared in IBD’s New America column of visionary companies twice in 2010. I always want to buy the strongest stocks that are near all-time highs. In the stock market, the strong get stronger, until they top. When they top, I always have an exit plan to limit losses. Most people want to buy a stock that will go to the moon, but are reluctant to buy stocks that are launched and heading to the stars. People looking for bargains in the stock market often end up with losers.
