Market very oversold–bounce coming?

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With the put/call ratio at 1.23 and with many stocks at oversold levels, we will likely get a bounce soon. But the major U.S. market indexes remain in  Stage IV down-trends. I might consider buying an inverse index ETF or some puts to profit from a further decline, but only after the market bounces and hits resistance. It is nice to be in cash on the sidelines.

By the way, this weekly chart of the Shanghai Composite Index shows it to have now begun a Stage IV down-trend. The best is yet to come….

SSEC

$SPY and $DIA are in Stage IV down-trends, $QQQ is next? 100% in cash; $GLD–Stage IV too

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I have told you before that I stayed safely out of the market during the 2000-2002 and 2008 market declines. I did so because I determined that the major indexes had entered Weinstein Stage IV down-trends. The SPY and DIA are now in Stage IV down-trends. Both are below their declining 30 week moving averages. The QQQ is also now below its 30 week average, although the average itself is now flat.  I am therefore in cash in all of my accounts, including my university pension. I actually have been in cash for some time, as I have written. It is impossible to know how far a down-trend will go. The best strategy for me is to wait for definite signs of a Stage II up-trend before I reenter the market on the long side. I fear we are much closer to the beginning of a major decline than to the end….

By the way, this weekly chart of GLD shows that in spite of its recent bounce, gold remains in a multi-year Stage IV down-trend too. (Red line is 30 week moving average.) Gold may not be a safe haven either.

GLDGMMA

GMI goes to 0 (out of 6); $AAPL very sick, along with $CMG; Cramer has a $FIT

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Tuesday was the second day of the new QQQ short term down-trend and the GMI has hit 0………..

With the apparent completion of a head and shoulders top pattern for AAPL, a decline to around $80 is likely. AAPL has also now begun a BWR down-trend with all of the shorter averages (red) now declining below the falling longer term averages (blue). For me, AAPL is a short or at least a stock to avoid. It is about to join the ranks of CMG as a broken stock, at least for now. I only buy stocks in RWB up-trends. Note the difference in the AAPL pattern, before versus after the summer began.

AAPLGMMA

And here is CMG.

GMMACMGAnd yet the CNBC pundits tonight were debating whether one should hold AAPL. A picture is worth a 1000 words. There is no reason for me to hold a stock in a BWR down-trend other than masochism or financial suicide.

And before the open on Tuesday, Jim Cramer was talking up the virtues of FIT. The stock fell more than 18% during the day. Beware the media pundits!!!!!

FIT