Dr. Wish

Up-trend in 7th day: T2108: 58%, out of over-sold territory; homebuilders recover; GMI: 2; GMI-R: 4

@ 7:46 am

The markets continue to improve.  The QQQQ sort term up-tend has completed its 7th day.  The Worden T2108 indicator (58%) is well out of over-sold territory, but still far from being in over-bought territory (>70%).  The GMI and GMI-R remain at 2 and 4, respectively. It is important to watch what the market is doing and to tune out everything else.

Xhb

This daily chart shows that the homebuilders ETF, XHB, is starting to recover.  It is above its 30 day average (red line) and the 10 day average (dotted line)  is now above its 30 day average.  This is the first time these technicals have looked so good, since the rise last August and September.  (About a week ago I sold  cash secured Dec. 12.00 put options on XHB.) The short term trend for homebuilders has changed to up, at least for now……..

Up-trend solidifies; T2108 highest since early September (54%); GMI: 2; GMI-R: 4

@ 7:58 am

The GMI and GMI-R are back to 2 and 4, respectively.  The QQQQ short term up-trend has continued for 6 days, and typically an up-trend lasts for a while after it passes 5 days.  The Worden T2108 indicator climbed 22, to 54% and is now at its highest level since September 2nd.  73% of Nasdaq 100 stocks closed above their 30 day average, the most since August 28th.  This market continues to gain technical strength.  I find that I must tune out the media, who are embracing  an ever declining bear market.  Last weekend I became optimistic after studying my charts and then became very anxious when I listened to the Fox channel business shows on Sunday morning.  The pundits tend to drive with their hands on the rear view mirror. The truck/car is moving up and I am slowly jumping aboard.  I can always jump off when it changes direction.  I am gradually accumulating the ultra long index ETF's, QLD and DDM. Two of the stocks on my IBD 100 lists hit a new high yesterday, CWT (a water stock) and ALGT (I own some).  In addition, it looks like all of the cash secured puts I wrote about several posts ago will expire on Friday unassigned, and highly profitable for me.  In early January I will consider selling a new batch of cash secured puts. My university pension funds will remain in cash until the longer term trends turn up. Until they do, I consider this to be a short term rally within a solid down-trend.  But short term rallies are tradeable for me……