General Market Index (GMI) table

Blog post: 36th day of $QQQ short term up-trend and GMI=5 (of 6) and Green; I went to cash in my trading account last week; One reason, daily MACD histogram turned red, see chart

@ 7:19 pm
GMI5/6
GMI-24/9
T210829%

In the past, I exited mutual funds in my  university pension accounts only after the longer term trend had turned down. That has not happened yet. In my more tradable IRA accounts I exit the market more frequently when some weakness becomes apparent to me. I do not want to give back all of my recent gains. So when the major indexes appeared to me to be weakening, I sold my TQQQ and other stocks and went to the sidelines.

One indicator suggesting weakness is the 12/26/9 daily MACD histogram that turned red Friday, after days of declining. The chart below shows this relationship. The MACD histogram reflects the difference between the MACD line (blue) and the signal line (purple). When the MACD line crosses below the signal line the histogram turns negative, or red. Note what happened to QQQ when the histogram turned red in March and May. The MACD is a measure of momentum and as the histogram lines decline it indicates waning strength of the move. Similarly, when the lines are rising it indicates strength. During most of the recent QQQ short term up-trend since 5/24,  the histogram has been black, indicating that the MACD was above the signal line. But notice how it has been declining and turned red on Friday. The  histogram does not have to remain red for long, but it signals to me at least current short term weakness. By the way, the histogram for SPY also turned red on Friday. Check it out for yourself!

Blog post: $AAPL and $AMZN and $FB have GLBs, augurs well for $QQQ up-trend, now in 31st day; look at $GOOGL post GLB; GMI remains Green at 6 (of 6)

@ 7:14 pm
GMI6/6
GMI-27/9
T210844%

These weekly charts show that several of the FAANG stocks have recently had GLBs to all-time highs. Since these stocks are heavily weighted in the Nasdaq 100 index (QQQ) it is likely that this ETF will continue to advance. However, if these stocks should close back below their green lines it would signal major weakness.

Look what happened after GOOGL had its GLB last October.

 

Blog post: GMI is at 6 (of 6) and up-trends remain intact; the $QQQ short term trend count is U-27; my profitable strategy of holding $TQQQ during a $QQQ short term up-trend;

@ 7:38 pm
GMI6/6
GMI-27/9
T210848%

In the GMI table below I provide my QQQ short term trend count. It is currently U-27, indicating the 27th day of the current up-trend which began on 5/26. I try to post in my daily blog the current QQQ short term trend count. I have found that a profitable strategy for me is to make an initial purchase of TQQQ, the 3x leveraged bullish QQQ ETF, on U-1. I then slowly accumulate TQQQ as the trend persists. I have found that this strategy repeatedly beats the performance of holding most individual stocks. Since U-1 on 5/26, TQQQ has advanced +23.3%.  During the same period only 4% of the Nasdaq100 stocks, 1% of the S&P500 stocks, none of the Dow 30 stocks, and 6% of all US stocks out performed TQQQ. In other words, holding TQQQ during an up-trend beats more than 94% of individual stocks. Everyone must make a clear choice of their intentions. Are you trying to find the needle in the haystack rare stock that will out perform TQQQ, or are you interested in a higher probability approach to making money?  For me, I would rather go with the odds and focus on owning TQQQ. But I must be watching for a change in trend so that I exit TQQQ quickly. TQQQ moves up or down about 3x as much as QQQ………

The GMI is heavily weighted towards growth stocks and Nasdaq 100 stocks (QQQ). The GMI is back to 6 (of 6) and keeps me on the right side of the market’s trend. The GMI is flashing a Green signal. It will turn to Red when the GMI registers <3 for 2 consecutive days.