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What is copper telling us about the world economy? In GLD, short, and in cash

@ 7:00 am
GMI0/6
GMI-R0/10
T210819%

So many of the indicators and stocks I look at are looking very weak.   A lot of people say that copper prices are correlated with economic growth.   Copper is a key material in so many products related to building and economic development. While looking at my watchlist of indicators, I happened to see this weekly chart of copper.   By my analysis, copper looks like it is getting ready to enter a major Stage 4 (See Weinstein book below for a discussion of stage analysis) down-trend.   I can’t trade futures in my IRA account and I can’t short stocks.   But I could buy some put options on SCCO, whose chart tracks the price of copper quite closely. Regardless, I think that this chart of copper is an ominous sign for the world’s economy…..

Another ominous sign is that the GMI and GMI-R   are each at zero.   The markets are in short and longer term down-trends and it makes no sense to hold stocks or long positions now, except for gold (GLD).   So I am short a few index ETF’s and own GLD. I do not know how long this decline will last, but things do not look good right now.   Friday was the 22nd day of the current QQQQ short term down-trend.   The Worden T2108 is at 19%, which is in oversold territory but not at an extreme level.   One promising sign is that 54% of the Nasdaq 100 stocks had their MACD above their signal line, a sign of short term strength.

Anyone hanging on to long positions probably has an addiction to trading or gamboling.   One needs to have a plan to minimize market risk.   It is so much easier to make money owning stocks when the GMI is above 3.

IBD says market in new up-trend; I am not yet convinced; Some possible rocket stocks

@ 7:00 am
GMI1/6
GMI-R4/10
T210823%

According to my trend rules, the QQQQ just completed the 21st day of its short term down-trend.   The longer term weekly indicator is now positive, making the GMI one.   And the Worden T2108 Indicator is now at 23% and out of deeply oversold territory.   IBD has reported that the Nasdaq Composite has now had a follow through day on the rally that began last week   and that the market is now in a confirmed up-trend.   They may be right, but I need more of an advance before I would identify a new short term up-trend.   The GMI-R is now at 4 of 10, and this index is more sensitive to short term changes in trend.   So, I remain mainly in cash in my IRA, waiting to see if we get a definitive up-trend.

Meanwhile, if a new up-trend is imminent, one place to look for new leaders is in the small list of new daily highs.   The following stocks hit new highs on Thursday, are near multi-year peaks,   and should be watched: MCK, AMMD, CSTR, QSFT, RDY, DGIT*, VASC, GIS, TGH, DTV*, UHS, ALK, THS, CMG, NTAP, WPI, SAM*, ABC, NEOG, LNCR, DISCA, EPB, CRM, EW.   I suspect that within this list are some new market leaders, if the market trend turns up. The three stocks with an asterisk reported triple digit earnings increases for the most recent quarter.

20th day of QQQQ short term down-trend; Rally on low volume

@ 7:00 am
GMI1/6
GMI-R2/10
T210821%

The late day rally on Wednesday occurred on lower daily volume than on Tuesday and is therefore suspect.   There were also more new lows than highs in my universe of 4,000 stocks. Wednesday was the 20th day of the current short term down-trend in the QQQQ.   The critical pattern to watch is how the indexes behave when/if they approach their declining daily moving averages.   If they   bounce down off of their averages and weaken, I will begin to transfer out of mutual funds and into money market funds in my university pension. In my trading IRA, I remain in cash and own a little GLD.   The key is to wait until the market reveals whether there will be a change in trend.