GMI= 2 (of 6) and on a Red signal, indexes up against resistance; GLB: $DORM and $FN


During this down-trend there are still a few growth stocks (about 10) hitting all-time highs (ATH). DORM is one, as shown by this weekly chart. Note last week’s above average volume at the Green Line Break-out (GLB, see blog glossary). I wrote about FN last week.


The indexes are right up against resistance after the snap back rally. Daily stochastics are very over bought. This week should tell whether we re-test the lows or break through.

Once again, green dot indicator predicted bounce


You can learn about the green dot indicator in my prior posts. It is a daily 10.4 stochastic cross and indicated by a green dot on the price chart and the arrow on the stochastic chart below. When a stock or index ETF is in a sustained up-trend (QQQ is not) buying on the green dot signal often works for me. During a down-trend one can sometimes also get a tradable bounce. You can access at my TC2000 Club a video showing how to add the green dots to the price chart.




The GMI remains at 0 (of 6) and on a Red signal.

Time for cash


The market remains incredibly oversold.  However, with the GMI at 0 (of 6) and still on a Red signal, it is time for me to remain in cash.There are few times since its inception in 1986 that the Worden T2108 has been below 6%. It closed Friday at 5.65%. Only 62 US stocks (of 4929) have a daily and weekly RWB chart pattern (see glossary for definitions). That is a ghastly statistic!



Stage IV decline imminent–in cash


In 2000 and 2008 I went to cash in all of my accounts and avoided the market carnage. The major signal that I followed was the curving down of the 30 week moving average of the QQQ. This time I have been in cash earlier because I am more conservative as I approach retirement. I know its seems counterintuitive, but the QQQ now appears to be entering a Weinstein Stage IV decline. If this is true, the down-trend is just beginning. The only thing to get me back into this market on the long side would be if the indexes can close back above their 30 week averages and the averages begin to rise. This strategy has worked great for me.

On Friday there were 21 new highs and 763 new lows in my US stock universe of over 4900 stocks. With odds like that, why try to buy stocks at new highs hoping that they continue higher? ? The best tactic of late has been shorting stocks that are trading at new lows.

All 6 of my GMI and 8 of my GMI2 indicators are negative.