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The QQQ, SPY and DIA are now below their critical 30 week averages. The collapse of the China markets may have serious repercussions for the rest of the world’s markets. I am all in cash with a few short positions. The key is to conserve one’s capital so that s/he can   invest when the clouds recede. I am not yet pulling my university pension accounts out of mutual funds yet, but I will, if the 30 week average of the QQQ and SPY turn down. Below is the weekly chart of the QQQ. Note that the index has   rarely closed below its 30 week average (solid red line). The last time was during October’s decline. Will the index bounce as it did then?

Sold some of my long positions on Tuesday. Market is treacherous right now. Mainly in cash in my trading accounts.

When the markets open strongly down, I look for stocks in my watch-list that are holding up.   There were a number on Monday that showed great relative strength and I nibbled at them. These include OPK, ITCI, AMBA, PANW, and INGN.   If they hold, I will add to my positions. If they fail I will sell them immediately. I also bought a little TQQQ. I must preserve my trading capital. So I do not marry my stocks and separate from each one immediately if it misbehaves. The fact that the market held on Monday in the face of the Greek no-vote is a sign of strength. When the market fails to go down on bad news, it is telegraphing strength. We might see a rally into earnings and then a decline into September/October as the Fed readies to raise rates. IBD notes that the put/call ratio has been holding above 1.0. Extreme bearishness among option traders is a great contrary sign of impending strength. And with an oversold 10.4 daily stochastic of 22.72 in the QQQ (up from 17 on July 2nd) , we are in the area where the QQQ usually rebounds. Hence my purchase of TQQQ, the 3X bullish leveraged ETF for the QQQ.