General Market Index (GMI) table

Often times a major advance is characterized by the stock or ETF tracking its 4 week moving average. When it closes the week below that average it often means the rise is weakening or ending. The long rise from October 2019 through February 20202 lasted 21 weeks. In only one of those weeks did QQQ close the week below its 4 week average (red dotted line) although sometimes it traded intraweek below the average. When the stock’s weekly low is floating above the average, it often returns to kiss it. This is what happened last week. The QQQ returned to kiss the 4 week average. It is critical that it close above it next Friday. The QQQ has closed above its 4 week average the past 4 weeks. However, a strong up-trend has  the 4wk>10wk>30Wk, as was the case during the prior 21 week advance.

The GMI remains Green at 4 (of 6) but the shorter term GMI-2 has weakened to only 3  positive elements (of 8). New highs are still rare these days.

I have repeatedly shown that the way to beat most stocks during an up-trend is to simply buy the triple leveraged bullish QQQ ETF, TQQQ. As long as the QQQ is in an up-trend, TQQQ rises more than almost all individual stocks. Since my QQQ short term trend indicator turned up on April 7, TQQQ has advanced 33%. Of all stocks in the major indexes (DIA, QQQ, SPY) only TSLA advanced more (+38%). In my big watchlist of IBD and MarketSmith type growth stocks, only 2% (18/809) beat TQQQ. For my time and money, I would rather buy TQQQ in an up-trend than try to identify in advance the rare needle in the haystack stocks that will beat it. My strategy is to take a small position in TQQQ as soon as there is a new QQQ short term up-trend. If the up-trend continues, I add more at higher prices over time. However, because TQQQ also falls 3x faster than the underlying index, I must have a strategy to protect gains.

The GMI remains RED and at 3 (of 6). It could turn GREEN this week. The SPY and QQQ have now closed back above their 10 week averages.