General Market Index (GMI) table

$QQQ short term up-trend holds but GMI turns Red; $MNST bounces and $ATHM has GLB

@ 11:19 pm
GMI2/6
GMI-23/9
T210835%

The QQQ short term up-trend held on Friday. However, the GMI has turned Red. I revised Thursday’s GMI to 2, when I discovered that its IBD mutual fund component had turned negative. With Friday’s GMI reading of 2, it triggered a Red signal. In recent years, a GMI of Red has sometimes occurred briefly at the bottom of a decline, so we will have to wait to see what happens this time. When the GMI reads 0, I become very defensive. Furthermore, the put/call ratio was 1.14 on Friday, indicating a significant amount of bearishness among options traders, which usually occurs a day or so before the markets bounce. The QQQ found support on its daily 15.2 lower BB (and 50 day average) on Friday, see daily chart below. If QQQ holds above 140.89, I suspect we will get a decent bounce.

Another stock that bounced last week from its lower BB and 50 day average and may move on to a GLB to an all-time high is MNST. I nibbled at MNST on Friday and placed a sell stop below Friday’s low.

During weak markets, few stocks hit new all-time highs and it is easier to identify possible leaders. As this weekly chart shows, ATHM had a GLB last week on above average volume. ATHM is likely extended now, and I will wait for a good entry, if this market holds.

 

The GMI registered below 3 for two consecutive days, triggering a change to Red.

 

 

 

$AAOI and $INGN get hit, beware September/October

@ 9:23 pm
GMI5/6
GMI-25/9
T210852%

When you get la leading stock like AAOI suddenly collapsing it suggests to me that there are more air pockets that will burst.

And look at INGN

I know that the trend in the averages remains up. But with so many stocks collapsing as they announce earnings, I think that we will have a rough post earnings period coming up. September can be a cruel month for bulls. I remain in cash in my trading accounts but 100% invested in my university pension.

Warnings signs appear for the $QQQ; GLB: $BCO

@ 7:49 pm
GMI4/6
GMI-26/9
T210859%

While the GMI remains Green and the QQQ short term trend remains up (U-12, see table below), I am concerned by the lack of follow-through on a lot of GLBs (green line break-outs) recently and the number of high volume down days on the QQQ. Look at this daily chart of the QQQ. Most of the high volume days have been down days (red spikes).

These are what IBD calls distribution days. They can signal a top. And once earnings are out, we will enter the post-earnings lull when the market often weakens. I have seen a lot of declines in September/October. While I still hold some small long positions, I will run quickly if they falter. People have become complacent and now think that the market must always rise. I have been watching the markets since the 1960s and have seen repeatedly that the good times eventually end. The real winning traders are those who protect their accounts when the market declines.

Almost every stock that came up on my scans this weekend reports earnings this week. I will therefore not list them. Here is one stock that reported good earnings last week that is flying high on marihuana and had a GLB (breaking its 2008 peak). While TC2000 sent me my programmed alert of this GLB  after Wednesday’s open, I was away and missed the break-out. I think BCO is still worth watching now that it is smoking….

Wha a nice weekly yellowband advancing pattern! Is BCO too high or on a roll?

Here is the GMI table.