Interest rates continue to rise as evidenced by declining long bonds. The resulting higher rates suck $$$ out of tech stocks and the QQQ. I continue to hide in cash and some SQQQ, which rose 3.3% on Wednesday. See the daily charts of TLT and SQQQ.
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Blog Post: Day 5 of $QQQ short term down-trend; More US new lows than highs–75 lows and 68 highs; In cash or $SQQQ in my trading account; Daily RWB up-trend is over, see my adapted Guppy chart
The white space between the red shorter averages and the blue longer term averages is gone. The RWB up-trend is over. Will it turn into a BWR down-trend? Note that during an RWB up-trend the closing daily prices (dotted line) tend to be above all of the averages. It is almost below all of the averages now.
Blog Post: Day 1 of new $QQQ short term down-trend and GMI=3. Many fallen angels, $SMCI, $AAPL, $CMG; Buying $SQQQ now; Buying $TQQQ on Day 1 of the recent $QQQ short term up-trend would have produced +40% and beaten almost all individual stocks….
Many darling stocks have hit air pockets, SMCI, CMG, AAPL to name a few, see weekly chart. And NVDA has closed below its 10 week average for the first time since January 6, see weekly chart below. Sell-offs are happening even after earnings beats. And we are entering the weak post earnings release period. Many down markets end in October after a wash out–“come back at Halloween.” I have found that about 40% of new QQQ short term down-trends, as I define them, end in 5 days or less. I bought a little SQQQ on Wednesday and will accumulate more as the down-trend progresses, especially if it can pass a fifth day. I am also concerned that the GMI could fall to 2 and trigger a Red signal if the IBD Mutual Fund Index (0muti) closes below its 50 day average. It is right on it now. If inflation cools and the Fed lowers rates it will be off to the races again. But keep in mind that we may also be headed to a government shut down in late September (thank you, Judy).
While I remain invested in mutual funds in my longer term university retirement accounts, I am in cash with a little SQQQ in my IRA trading account. When the QQQ short term trend turns up again, I hope to buy TQQQ. If one had bought TQQQ on Day 1 of the QQQ short term up-trend on 4/28/23 one would have an increase of +40.5% through today’s close. That would have beaten 95% of the Nasdaq 100 stocks and all but 4 of the S&P500 stocks. Why do I not have the discipline to do that every Day 1 of a new QQQ short term up-trend? I guess I would rather try to find the rare needle in the haystack that beats TQQQ. Did any of my readers buy and hold TQQQ?
