QQQ passes 12th day of short term up-trend; buying again

GMI5/6
GMI-25/9
T210855%

In spite of all of the bad news about raising the debt ceiling, the up-trend continues. With the GMI and GMI2 each registering 5 (of 6), I must respect this up-trend.   I do not think we would be seeing such buying in GOOG or AAPL if this market were going to enter a prolonged down phase.   I began worrying about the tech stocks when AAPL could not go to a new all-time high.   But it did so on Friday after consolidating for 20 weeks, and GOOG climbed almost 13% ($68).   The bulls are still alive. The Worden T2108 indicator is at 55%, in neutral territory.   The QQQ and SPY have spent 3 weeks back above their 10 week averages.   And the QQQ now has the strong 4wk>10wk>30wk averages pattern.   So, I am slowly wading back into this market.

QQQ short term up-trend reaches 7th day; weekly Guppy chart shows resumption of up-trend; AAPL strong

GMI5/6
GMI-25/9
T210874%

I am impressed by the action of the leaders on Friday, especially of AAPL (which I have bought call options on).   Five of my nine leaders rose on Friday.   Growth stocks are back in vogue. The GMI and GMI2 are both at 5, of 6 and both the QQQ and SPY are above their 10 week averages.   I therefore must not fight this up-trend.   Options expire on Friday and then we are into 2nd quarter earnings releases.

A reader asked me to post the GMMA chart for the QQQ.   The weekly chart below (click on chart to enlarge) shows that the market has held support and the shorter term averages (red lines) have turned up.

Nevertheless, I am still worried about whether the debt limit talks will be resolved on time.   I remain largely in cash in my university pension until the situation is resolved.   And yes, I realize I let the news and my emotions take priority over the market’s action.   But sometimes it pays to be on the sidelines so I can sleep at night.

My more speculative money is in the market in some call options in tech stocks.   When AAPL rises during a steep market decline like Friday’s, it indicates to me a lot of underlying technical strength.   And I love my new iPad!   I can easily access TC2000 on it and run scans and my favorite charts. I buy AAPL cautiously, however, knowing that any bad news about Steve Job’s health would likely send the stock on a sharp decline.

Amazing snap-back, but will it hold?

GMI6/6
GMI-24/9
T210870%

IBD has today labeled the market in a resumed up-trend, even though there was never a classic follow-through day.   See today’s IBD for their rationale (or rationalization). And my indicators are now positive, maybe too positive.   The GMI is now 6. In just a few days, the T2108 indicator has risen to 70%, near where markets top.   And the daily stochastic that I follow for the QQQ is now near 100% and as high as it got on recent   up-moves. Friday was only the 3rd day (U-3) of the new QQQ short term up-trend.   This was an amazing reversal in just one week. The key to this market is whether this rise will extend to a new recovery high or peter out before.   If the market cannot close at a new high (QQQ above 59.34), the ensuing decline could be violent.   It is not a good idea to fight the trend of the market, however—and the trend is up, for now. I would like to see this new up-trend   get to at least 5 days before I start to slowly wade back into   this market.