General Market Index (GMI) table

Dissecting $AAPL’s GLB (Green line break-out); thank you Nicolas Darvas

@ 6:11 pm
GMI6/6
GMI-27/9
T210860%

AAPL hit an all-time high of $233.47 on October 3, 2018. After that high was not exceeded for 3 months, I drew in a green line, designating a green line top. I could then set an alert on TC2000 to alert me when AAPL traded above the green line. It had a green line break-out (GLB) one year later on October 11, 2019. Note the above average trading volume that day confirming the break-out.  AAPL has now advanced +12.5% since the GLB. Note that after the GLB, AAPL re-tested the green line for a few days, a common occurrence. If it had CLOSED back below the green line, I would have sold my position.  I would then have repurchased it if it retook the green line. I have found that the GLB strategy works really well for me in a strong market. The idea is to buy a stock that has advanced to an all-time high, then rested for 3 months or more and subsequently closes above the green line on above average trading volume. The fabulously successful trader,  Nicolas Darvas, concentrated on buying stocks breaking to all-time highs during a rising market. Every person should read his book, How I made…listed below. (It is the first book I require my students to read.)

Note that during the time of the GLB and for weeks before, AAPL had been in a nice daily RWB up-trend.

GMI remains at 6 (of 6).

All 6 GMI components remain positive; $TQQQ strategy highly profitable again

@ 9:24 am
GMI6/6
GMI-27/9
T210857%

If one had bought TQQQ at the close on October 14 when my $QQQ short term trend indicator identified a new up-trend, s/he would now have a 15.98% gain and outperformed 92% of the Nasdaq 100 stocks and 91% of the S&P500 stocks. Once again, it is clear that buying TQQQ at the beginning of a QQQ short term up-trend can be a highly profitable strategy and frees one from having to find the rare stock that will do better. The GMI turned Green on October 16, and TQQQ has advanced +12.6% since then. To trade TQQQ, which is a 3X leveraged ETF, one must also have a strategy for exiting when the trend turns down. Stay tuned….. (will post again Tuesday night)


Mark Minervini presented to my students on Friday–magnificent! GLB tutorial on youtube; the value of hourly charts: $DOCU

@ 9:07 pm
GMI6/6
GMI-27/9
T210861%

Mark Minervini presented for three hours to my class on Friday, in-person. It was an extraordinary experience. Mark has a huge commitment to advancing financial literacy education for young people.

One of my students has produced tutorials based on my course and loaded them on youtube. Check them out here. Or search for Richard Moglen on youtube. His tweets are available at: @RichardMoglen.

Ever wonder if it pays to look at hourly charts?  I have been looking at DOCU as a possible GLB (green line break-out). Below is its daily chart. It shows the stock consolidating below the green line. Note there is nothing unusual in its volume pattern the past few weeks. After the large earnings related spike in early September, volume has been declining. Note the two recent green dot buy signals.

 

Now look at the hourly chart. You can see 3 clear spikes in volume at the last hour each day, which I marked with arrows. Each of these spikes in buying were not visible in the daily volume charts. Clearly, some big buyers are coming in at the close to accumulate the stock. While this buying does not guarantee a break-out, it does suggest to me that a rise may be imminent.

The GMI remains Green and is at 6 (of 6).