Dr. Wish

$QQQ short term up-trend reaches 65th day, still cautious

@ 6:25 am
GMI5/6
GMI-27/9
T210866%

IBD went back to call the market in a resumed up-trend.   As I said yesterday, the QQQ was on critical support and could bounce.   And AAPL re-took its 10 week average. The QQQ’s rise occurred on lower volume than the preceding day’s decline, however.   Only 68% of all stocks rose, compared with 89% of the Nasdaq 100 stocks.   There were only 246 new 52 week highs in my   universe of almost 6,000 stocks on Tuesday, compared with more than 300 on each of the days before Tuesday’s rally. So this advance was not as deep as one might think and was concentrated in the tech stocks.     While I took on more long positions on Tuesday, I am ready to exit if this rally fades.

 

End of $QQQ short term up-trend Tuesday?

@ 6:30 am
GMI5/6
GMI-24/9
T210860%

After 64 days, the QQQ short term up-trend could end on Tuesday with a down or flat day.   (IBD now declares uptrend under pressure.) It was a great, long ride! The QQQ is on several levels of support that I monitor, so that index could bounce up by Tuesday’s close.   If it does, the key for me   is whether that bounce will hold through Wednesday. A failed bounce could lead to a large decline. I cut back on my holdings in my trading accounts on Monday. Remember, a market always falls faster than it went up, and this market rose pretty fast.

63rd day of $QQQ short term up-trend; $AAPL sends signs of weakness

@ 6:35 am
GMI5/6
GMI-27/9
T210869%

I told you that I have successfully traded AAPL by holding it when it closes above its 10 week average and exiting when it closes below. AAPL has now closed below its 10 week average (blue dotted line) and I have exited the stock.   This weekly chart of AAPL   also shows that AAPL remains in a Stage 2 up-trend (above its rising 30 week average, red line) with support around 493.   But do I want to hold it if it falls to there?

AAPLweekly01102014

Another way to look at it is through the Guppy GMMA chart.   Note that AAPL has now closed below 5 of its 6 shorter moving averages (red lines).   The dotted line is the closing price each week. This indicates considerable weakening of its up-trend.Screen shot 2014-01-12 at 11.49.33 AM

With AAPL being a heavily weighted ingredient in the QQQ showing weakness, this index may also have trouble continuing its up-trend.   Furthermore, the up-trend is 63 days old, rather long for a short term up-trend.   With more than 60% of advisers in the Investor’s Intelligence most recent poll reporting that they are bullish, I suspect this is not the time to be hanging on to a lot of positions in tech and growth stocks.   I am ready to exit quickly if the GMI and GMI-2 weaken.

GMI01102014