The QQQQ down-trend continues, as the index failed to break through the critical area I monitor. It makes me wonder whether Thursday’s huge decline really reflected the possibility that some heavy hitters decided that this market was toppy and wanted to exit. The action of a few large players could have set off a selling stampede to preserve profits, given that the market had been going up for 3 months straight. It remains to be seen whether this short term down-trend will turn my longer term trend indicators down. I am sitting comfortably on the sidelines, mainly in cash, but will begin to focus on some shorting. (See my reply to a comment yesterday about the use of stop loss orders.)
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6th Day of QQQQ Short Term Down-trend; Critical test near
The more sensitive GMI-R is now up to 5, but the GMI is at 2. We are close to the critical point where this rebound will hit resistance and falter or break through. In a few days we will learn whether this down-trend can change to an up-trend. The QQQQ, now at 48.62, needs to close two days above 49 to signal a new short term up-trend.
5th Day of QQQQ Short Term Down-trend; QID and Cash
GMI and GMI-R unchanged. Tuesday was the 5th day of the new QQQQ short term down-trend. Own a little of QID, the ultra short QQQQ ETF. Still mainly in cash. Good time to be on the sidelines in my trading account.