General Market Index (GMI) table

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
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GMI-23/9
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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.

Blog Post: Day 20 of $QQQ short term up-trend; 18 stocks on my IBD/MS growth stock list reached an ATH on Friday, see list

@ 10:16 pm
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GMI-24/9
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These stocks are sorted according to current price divided by lowest price the past 250 days. Seven are 2x or more their lowest price the past year. Doublers are worth studying to see if they meet one’s set-up for a low risk purchase. Be sure to note the next earnings report date for each, in column 3. The greatest winning stocks break out to an ATH and then go on to a series of ATHs over many months. Why buy the fallen angels when there are some new ones rocketing to historic heights?

The GMI remains Green. So many people are chasing income instead of growth stocks these days. The crowd is usually wrong and will get back into stocks long after the market has advanced. I noticed for many years that the media proclaimed a bull market about 6 months after the bear market bottom was in.