General Market Index (GMI) table

Blog Post: Day 6 of $QQQ short term up-trend; 96 US new highs and 39 lows Friday; This week will show whether debt negotiations squabbles will create havoc with the markets, hide in precious metals? See daily charts of $GLD and $SLV

@ 9:44 pm
GMI5/6
GMI-25/9
T210846%

The GMI and $QQQ short term up-trend survived close calls last week. Normally the end of earnings period brings about market softness, and it is Sell in May time. I am mainly in cash and hold some GLD. We should know by Tuesday, after the White House meeting, whether we are likely to have a repeat of the 2011 debt ceiling crisis. If we do, then gold and long term treasuries should do well, based on my review of 2011 trends during that fight over raising the debt. Scared investors hide out in precious metals. Once we get by a possible debt crisis I will be more comfortable owning stocks.  On Friday, GLD gapped down but closed near its daily high. It is important that it hold Friday’s low of 185.77.  That is near the 30 day SMA and 21 day EMA.

Silver (SLV) chart looks almost identical to that of gold.

 

The GMI = 5 (of  6) and remains on a green signal. Note  that QQQ’s 10 wk avg has been above its 30 wk avg for 11 straight weeks. That tells me the bear market bottom is likely established, unless it fails.

Blog Post: Day 1 of $QQQ short term up-trend; GMI remains Green; It still looks to me like the market bottom is in, see charts and the new indicator added to GMI table

@ 7:44 pm
GMI4/6
GMI-27/9
T210848%

We had an unusual 2 day long new QQQ short term down-trend last week. I had noted that 40% of short term down-trends last 5 days or less but this was a rare, very brief one. And the GMI came close to turning Red las week, but held. My 10:30 weekly chart below shows QQQ (and also DIA and SPY, not shown) remains with its 10 week average above its 30 week average. And now the 30 week average is turning up, a powerful sign of a beginning Stage 2 up-trend. This is the pattern of new longer term up-trends.

Here is the bottom in 2020.

And in 2019

And in 2009

But this whipsaw pattern happened in 2016, indicating that past performance does not guarantee future results. No indicator is 100% perfect and we need to remain flexible and nimble. But to me, the odds favor a new major up-trend–until they don’t. If the index (gray line) closes the week back below the 30 week average (red line) is is an early sign of weakness and all bets are off.

The GMI remains on a Green signal. I added a new statistic to the table: the number of weeks the QQQ 10 wk average has closed above its 30 wk average. This captures the prime signal of the longer term up-trend I noted in the 10:30 week charts I discussed above.

 

Blog post: Day 25 of $QQQ short term up-trend; 2 indicators on my daily chart spell possible trouble for $QQQ; 2 ETFs rose during the 2011 debt crisis

@ 9:15 pm
GMI5/6
GMI-23/9
T210846%

Equities mostly stay within their upper and lower Bollinger Bands. I use the 15.2 BB. When the bands contract it indicates reducing volatility. At some point the stock breaks out of the constricted bands and volatility explodes. The problem is one does not know in advance which direction it will go. On Friday, QQQ bounced up off of the lower band, see arrow on daily chart. The MACD histogram pattern is another useful indicator for gauging the  likely direction and strength of a move. This daily chart shows the 12/26/9 MACD histogram bars being red (negative values) for 8 days,  revealing weakness. This means the MACD is declining below its signal line, also shown on this chart. I also remain very cautious because the Sell in May period is imminent. I think there will be a huge debt limit debacle in June or July. Few market pundits are talking about it, which worries me. I went back and reviewed what ETFs rose during the 2011 debt stand off when S&P lowered the US treasury ratings. I found that gold and US treasuries rose. I am therefore holding some UGL and TLM. Both are 3x leveraged ETFs for gold or 20 year treasuries, respectively. I may be too early on this but I am watching these ETFs closely for signs of life. The GMI, shown below,  remains Green at 5 (of 6) but the very sensitive indicators in the GMI2 are weak. Be careful.