Stock Market Technical Indicators & Analysis
Theses 15 stocks traded at an ATH (all-time high) on Friday. Five had a GLB last week: NVTS, NXPI, GFS, ALAB, SKYT. Check them out and draw in their green lines according to the rules I specified at my recent presentation to the MoneyShow. Any that CLOSE below their green line, I would consider to be a failed GLB.
The GMI remains relatively strong, for now.
While the GMI=5 and GREEN, I am very worried about the market internals. There have been 3 days last week with 100 or more US stocks at new yearly lows, a huge departure from recent times. Theses 3 were the only such days since April 1! Before that the next day with 100 or more lows was March 20, with 153. I have found that when the market indexes are climbing to new highs and the new lows are also climbing, the rally is suspect. And now look at interest rates on the 20+ year US bonds. TLT is now in a BWR daily down trend and swooned on high volume last Friday. When bonds fall the interest rates rise. To understand this inverse relationship, think of it as being like a stock paying a dividend. When the price of the stock falls the yield which is a percentage of the price rises. For example, X pays $5 annually and is selling at $100, yield= 5/100 or 5%. If the price falls to $50, then the yield rises to = 5/50 or 10%. Most bonds pay a fixed dividend so that as their price declines the yield rises and visa versa. TLT dropped to 83.33 on Friday.
On Wednesday, NVDA reports earnings.There will be a lot of volatility. I will reduce risk on everything by Tuesday’s close. I need to protect my recent gains.
The GMI table shows that T2108 has declined to 39.72. That means that only 40% of NYSE stocks closed Friday above their 40 day averages, a major sign of general weakness.
The GMI table appears below.
The 10 week average is finally back above its 30 week average and 4wk>10wk>30 wk, 4wk avg=red dotted line. This is a powerful up-trend to ride. However, because QQQ closed the week so far above its 4wk average, I would not be surprised to see this week some retracement to kiss the 4 wk average, currently around 675. That would be a potential buy point for me.
Meanwhile, there has been some nice successful GLBs. INTC had a high volume GLB and has then trended along its 5 day exponential moving average (EMA). Even QQQ has been doing so.
One way to trade a GLB is to find one trending along its 5 day EMA. When it closes below it, I may place a sell stop below that day’s low.
GLBs are also powerful for ETFs. Note the one close below the 5 day EMA. If I had placed a stop below that day’s low I would have retained the position.
The GMI= GREEN. It is amazing how well GLBs have been working! Check out my recent MoneyShow presentation, link on the Webinars tab of this blog, to understand how I find and trade GLBs using TC2000. Get a discount coupon for TC2000 on the blog header too and find your own!
