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The market is not out of the woods. IBD still calls it in a correction.   And the GMI is only 1 (of 6).   The market is no longer oversold.   I am watching AAPL for clues of the market’s trend. A close of AAPL above 591 would suggest significant strength. But its 10 week average is about to cross below its 30 week average, a sign of weakness.

Meanwhile, FB continues to show strength, now closing at $24.32.   The daily Guppy GMMA chart shows that the short term averages (red lines) are now rising above the long term averages (blue lines), a major sign of strength. I own some FB.

IBD still sees the market in a correction.   Monday’s trading volume was lower then Friday’s.   Monday was the 29th day of the current QQQ short term down-trend.   The T2108 indicator is at 30%, well out of oversold territory.   The key to the market is how this rally performs.   The market is not out of the woods because of a couple of days of advances.   This could be a dead cat bounce.   Only time will tell. I may not be able to post on Wednesday.

80% of the Dow 30 stocks have a daily 10.4 stochastics reading that is oversold–below 20.   This is the highest percentage since I began tracking this statistic last December.   In addition, the T2108 indicator is 17% (lowest since May 18th) and   the put/call ratio closed at   1.16% on Thursday.   A put/call ratio above 1.2% is always followed by at least a bounce.   The QQQ short term down-trend reached its 27th day on Thursday.   The downtrend that ended last June reached 44 days. There were 413 new lows on Thursday in my universe of stocks, the most since October 4 2011, when the market retested a major correction low. IBD still sees the market in a correction.

By now the decline is accepted and appreciated by everyone.   The percentage of advisors that are bullish has come well off of its highs, above 50%, and is now at only 38%.   I closed out my position in SQQQ and am now 100% cash in my trading accounts.   I want to assess the strength of the next   attempt to rally before I take another position.   The closer that T2108 gets to single digits, the more optimistic I become. The GMI remains on a sell signal since October 22.

This weekly chart of the QQQ since 2011 shows the GMI buy and sell signals. Note the low trading volume on this decline, compared with the volume at the August, 2011 bottom. Click on chart to enlarge.