Dr. Wish

In spite of the bad numbers on Wednesday, the short term up-trend in the SPY and QQQQ remains up.   A couple of more declines could change that.   Nevertheless, my longer term indicator is now negative again.   As I said yesterday, the key is whether the 30 week average starts to curve down.   For now it is flat and could yield a lot of whipsaw moves.   Note the weekly GMMA chart of the QQQQ below shows that all of the shorter term averages (black) are still above and sitting on the flat longer term averages (red). So we are not in an extreme down trend yet. Time to be defensive until the primary trend becomes clear. Remember, by definition,   a trend follower only identifies a top (or bottom) after it has occurred.

Tuesday was the 13th day of the current QQQQ short term up-trend.   With a big down opening coming, I must watch key support levels.   A weekly chart of the the major indexes suggests we may have completed the top of the right shoulder of a head and shoulders top.   The longer term up-trend of the QQQQ will turn negative for me with a close of the QQQQ below 46.17 . The comparable figure to watch on the Dow is a close below 10,480.   The 30 week average (red line) is about as flat as one can get, meaning we could be in a market of whipsaws for a while.   However, if the 30 week   average for these indexes begins to decline, I will exit all markets.   Note the potentially bearish weekly chart of the Dow below (click on chart to enlarge).