Dr. Wish

QQQQ counter-trend rally completes 11th day; Apple of my I-phone?

@ 9:12 pm
GMI3/6
GMI-R6/10
T210871%

While the Nasdaq 100 tech rally completed its 11th day, the rise has failed to produce many new highs.   There were 8 new highs and 20 new lows in my universe of 4,000 stocks on Wednesday.   71% of the NYSE stocks closed above their 40 day averages, reflecting the strong   but not severely overbought reading in the T2108 indicator.

Four of the 8 stocks at new highs are on my IBD100 lists:   SNDA, MNRO, AZO and ROH.   MNRO has a strong chart, rising on large volume.   Both AZO and MNRO are in the auto parts/repair business.   During a recession, people keep their old cars longer and must eventually repair them.

I remain cautious and largely in cash.   I maintain small long positions in QLD (the ultra long QQQQ ETF), AMZN, NFLX, AAPL and GMCR.   My sons tell me the new iphone release this summer will be extraordinary.   This anticipated   development may be why AAPL is holding up pretty well lately.

Is the bear market over? Check out my “Guppy” charts

@ 10:59 pm
GMI3/6
GMI-R6/10
T210870%

Everyone wants to know if the bottom of this bear market is finally in place. The truth is that only liars and lucky people can really call a bear market bottom close to its occurrence.     I noticed years ago that the pundits on TV usually felt comfortable calling a new bull market about six months after the actual bottom.

The true trend follower rides the current trend until his/her indicators suggest a new trend has begun.   But all trends are not   equal.   Within a longer term down-trend there are short term up-trends.   Currently, we have had a daily up-trend within a weekly and monthly   down-trend. Day traders who monitor trends by the minute or hourly, for example, can trade numerous up and down trends within the longer term trend.

Thus, each person needs to determine his trading time interval when trying to trade trends.   And one can trade different pots of money using different time trends.   So I will not commit my university pension money to the long side of the market when the weekly trend is down.   I stay in cash during such periods. But I may trade with my IRA funds during a daily up-trend that is occurring withing a weekly down-trend.   However, I have had more success trading consistent with the weekly trend and tend to stay mainly in cash even in my IRA during a weekly down-trend.   It is hard to resist buying some recovering stocks during a rally like we have just had, even though my longer term trends are still down.

Read more

6th day of QQQQ short term up-trend; Worden T2108: 63%

@ 9:02 pm
GMI3/6
GMI-R6/10
T210863%

The QQQQ rally finished its 6th day on Wednesday. There were 10 new highs and 12 new lows in my universe of 4,000 stocks on Wednesday.   IBD 100 stocks (from my lists the past year)   at new highs are:   SNDA, CPSI, TNDM, ROH, SGP, MYGN and QSII.   TNDM and QSII hit all time highs.   The T2108 indicator is now at 63%, the highest level since January 13th.   The market is not overbought until the T2108 rises to around 75%. So this market could climb a lot higher.   The QQQQ remains in a counter trend rally, until it fails or the longer term trend turns positive.   I will wait for the GMI to rise to 5 or above before I commit my university pension funds to the market.   I have successfully avoided   this bear.   In the meantime, I trade on the long side in my IRA.   I am slowly accumulating QLD as this up turn strengthens.