How I use Yellowband up and down trends; $FIZZ, $SHOP, $IGT, $JCP, $QQQ

I wrote a few posts ago about a key chart pattern that I noticed in the 1990s, called yellowband. It is a way of staying focused on the longer term trend of a stock. A yellowband up-trend is a stock on a weekly chart that closes repeatedly above its rising 10 week average that in turn is consistently above its rising 30 week average. A yellowband down-trend is simply the reverse. The following charts illustrate yellowband patterns. Some charts show the transition from up to down trends. I discovered the value of the yellowband pattern in the 90s. I primarily buy stocks that are above or near their last green line break-out (GLB) that have a yellowband up-trend. I try not to sell as long as the yellowband is intact unless I see unusually high volume selling or a climax top. A close below the 10 week average is a significant technical signal for me to exit or reduce my position. If I had diligently checked a stock’s yellowband pattern I would not have been shaken out and exited many great stocks too early during the past few years. A picture is still worth 1,000 words….

The QQQ remains in a yellowband up-trend and recently found support at the 10 week average, a good place for me to enter or add to a position..

And the GMI remains Green.

Will post again on Wednesday evening.

 

 

 

5th day of $QQQ short term down-trend; Commodities, $DBC, heading down; Bonds, $TLT, rising; Biotech ETF, $IBB, at 2-year high

GMI4/6
GMI-26/8
T210847%

The QQQ short term trend will turn up if we get a level or up move in that ETF on Thursday. The nontech stocks are doing much less well. The T2108 is at 47%, lowest since June 7 when it also hit 47%. T2108 measures the percentage of NYSE stocks that closed above their simple 40 day average price. This weekly chart of the commodity ETF, DBC, shows them heading down again, perhaps to test the January, 2016 lows.

And treasury bonds are climbing, suggesting that traders are scared and seeking safety or predicting a weak economy. As TLT rises, longer term interest rates are declining.

One note of strength–biotechs at 2 year highs!