Dr. Wish

Isn’t it nice to be in cash on the sidelines during this decline?   The GMI issued its Sell signal on 9/26.   All of the pundits are rushing to explain the decline by things happening now.   However, the GMI picked up on a decline long before these events.   One must follow the market, not the news. The GMI will likely flash a Buy signal long before the news turns positive.   Remember how most pundits were skeptical of the market’s rise that began in 2009!

The market will retest Wednesday’s lows and I suspect even if they hold, the market will eventually go lower.   This still mini-decline could turn out to be the prologue to a major bear market. It takes a while for the 30 week average to curve down. Time will tell. Meanwhile, take a look at the weekly chart of the SPY. Note how small the current decline appears compared with the decline in 2011.

The GMI actually registered ‘0’ on Monday, but I missed it.   The QQQ has closed below its 30 week average now for two days. Since 9/26 when the GMI issued a Sell signal, the QQQ has declined -5.9%.   The SPY is down -5.2% and the DIA is down -4.5%.   Meanwhile, SQQQ (the 3X bearish QQQ ETF)   is up +18.5% during the same period. I wish I had the courage to buy SQQQ every time the GMI issues a Sell signal. Did any of you?   I will just have to wait to buy the TQQQ the next time GMI issues a Buy signal…

I love to watch the new high list when the market is declining.   Here can be found the stocks that are so good they are being supported throughout the dcline.   There were 54 new highs on Tuesday. A few of them, 17,   are above their recent green line tops:   FIZZ, SAFT, TRNO, NU, IGU, SGNT, ANCB, NFBK, CASY, BABY, APT, HPY, POR, AKR, MGEE, CCI, XEL. These stocks are near all-time highs and worth researching for possible leaders in the next market rise, which will eventually come.

Sorry I posted late yesterday morning. If you missed that post about how I identify a bottom, please go back to that post.

Put/call ratio=1.41, bounce coming?!