Dr. Wish

GMI flashes “Sell”

@ 7:00 am
GMI2/6
GMI-21/9
T210852%

With the GMI having registered less than 3 for two consecutive days, it has now flashed a Sell signal.   Friday was also the second day of the new QQQ short term down-trend.  I am in cash in my IRA and margin accounts.   I want to see what happens with the resolution of the fiscal cliff negotiations before I re-renter the market. Because of the limitations on trading, I am still 100% invested in mutual funds in my university pension–for now. Only two of the four oversold market indicators I watch are oversold, indicating this market could fall further. One of them, the Worden T2108 indicator, is at 52%, in neutral territory.

Day one of new QQQ short term down-trend

@ 7:00 am
GMI2/6
GMI-21/9
T210857%

I will become more confident of this new short term down-trend if it can reach day 5.   For now, I own some calls on SQQQ and am almost 100% in cash in my margin account.   Things are too volatile for me to trade right now. The prior 21 day short term up-trend of the QQQ generated no trading profits. Another day with the GMI below 3 will send a GMI Sell signal.   Stay tuned. (I have two types of signals.   The first is the QQQ short term trend count. The second is a more significant general market, GMI signal.   I take both signals into consideration in timing the market.)

QQQ short term up-trend may end on Thursday

@ 7:00 am
GMI3/6
GMI-21/9
T210859%

IBD now sees market “up-trend under pressure.”   By my count, a flat or down day on Thursday will begin a new short term down-trend in the QQQ.   Note that the GMI-2 declined to 1. I posted mid-day on Wednesday to inform readers that I was reducing my long positions in the QQQ even more.   I now have a small long position and a larger short position in the QQQ leveraged ETF’s.   I am 100% cash in my margin account.   The market volatility scares me in the midst of the political brinksmanship   in Washington. However, the fiscal cliff mess may actually be a cover for a developing bear market.   A rally from a last minute resolution may not last long? The year after a Presidential election sometimes brings a weak market, even without extreme political melodrama.