All of my indicators are still in up-trends, with the GMI at 6 and the GMI-R at 10. The Worden T2108 indicator is at 83%, not far from the highest levels that it typically gets to, around 90%. I continue to hold QLD and a few other individual stocks.
Meanwhile, the QQQQ has completed the 43rd day of its short term up-trend and has been above its key 10 week average for 9 straight weeks. No one knows when an up-trend will end. We must wait for the critical technical signals. A trend follower must always get out after the top, after the down-trend has revealed itself. The key is to ride the elevator up and exit near the top floor, before it drops to the basement.
General Market Index (GMI) table
My post from the bear market bottom; weak TJX; GMMA shows QQQQ in strong up-trend
“Last week, a person who knows nothing about the market asked me how to short stocks. This is reminiscent of the stories of the shoeshine boys providing stock tips, near the roaring 20’s market’s top. The sentiment is just too negative right now. Does this mean the market has to turn up? Not necessarily, but the market is always an assessment of competing probabilities. “ (Post on 3/8/2009, GMI: 0, T2108: 7%)
I wrote the above words last March, which turned out to be just as the market successfully tested its bear market lows and began the current rise. The Worden T2108 indicator was in single digits, a rare screaming oversold buy signal. When people around me who never traded asked me how to short stocks it turned out to be a key contrary signal that the market decline was near an end. Similarly, I remember when a friend who knows little about the market asked me if he should refinance his house to invest in the market–back in 2000 near that market’s top………
I have noticed that the pundits have been saying that TJX , the discount retailer chain, is a good buy. I therefore was struck by the GMMA daily chart below, which is flashing warning signals. With the short term averages (black lines) now below the longer term averages (red), this is not a stock I would want to own. It may even be a good short play. You do know that analysts sometimes tout a stock so that their big clients can unload their long positions to the unsuspecting public. (The “NA” on the chart shows when IBD wrote about TJX in its New America column.) Another stock with similarly weak technicals is PWRD.
Meanwhile, the GMI and GMI-R
All indicators positive; beware of gold, STEC, GMCR
My indicators are all positive again. There were an amazing 398 stocks in my universe of 4,000 that hit a new high on Friday. 59% of the 4,000 stocks closed above their 10 week averages. Nevertheless, two rocket stocks I have written about weeks ago are now in downtrends, STEC and GMCR. GMCR has now closed below its 30 week average. I hold no stocks that close below this critical average. It may be wise to buy some puts on these stocks. While gold is still in an up-trend, it declined on Friday with the highest daily volume in more than a year. Gold may have completed a climax run. Be careful not to give back all of your hard earned profits. The dollar is rising and bonds were weak. Maybe higher interest rates are coming. Meanwhile, the GMI