Rebound continues, but for how long? Look at this daily chart of the SPY. SPY is way below the long term trend line (blue line) that it recently broke. We now have a lower bottom. Will we get a lower top? Stay tuned…….
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15th day of $QQQ short term down-trend; skeptical of rally
The Worden T2108 has held and is now back to 20%. It is very important to study carefully the quality of the next rebound. I suspect the rebound will not break the current down-trend and that the decline will resume with a vengeance. If the major indicators rebound to their 30 week averages, I will transfer some of my university pension money out of mutual funds and put it in money market funds. It will take a lot for me to trust any market rally. This decline is still relatively small and I have not seen enough panic to suggest a sturdy bottom.
14th day of $QQQ short term down-trend; the current mini-decline
Isn’t it nice to be in cash on the sidelines during this decline? The GMI issued its Sell signal on 9/26. All of the pundits are rushing to explain the decline by things happening now. However, the GMI picked up on a decline long before these events. One must follow the market, not the news. The GMI will likely flash a Buy signal long before the news turns positive. Remember how most pundits were skeptical of the market’s rise that began in 2009!
The market will retest Wednesday’s lows and I suspect even if they hold, the market will eventually go lower. This still mini-decline could turn out to be the prologue to a major bear market. It takes a while for the 30 week average to curve down. Time will tell. Meanwhile, take a look at the weekly chart of the SPY. Note how small the current decline appears compared with the decline in 2011.
