My post from the bear market bottom; weak TJX; GMMA shows QQQQ in strong up-trend

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“Last week, a person who knows nothing about the market asked me how to short stocks.   This is reminiscent of the  stories of the shoeshine boys providing stock tips, near the roaring 20’s market’s top.   The sentiment is just too negative right now.   Does this mean the market has to turn up?   Not necessarily, but the market is always an assessment of competing probabilities.  â€œ (Post on 3/8/2009, GMI: 0, T2108: 7%)

I wrote the above words last March, which turned out to be just as the market successfully tested its bear market lows and   began the current rise.   The Worden T2108 indicator was   in single digits, a rare screaming oversold buy signal.   When people around me who never traded asked me how to short stocks it turned out to be a key contrary signal that the market decline was near an end.   Similarly, I remember when a friend who knows little about the market asked me if he should refinance his house to invest in the market–back in 2000 near that market’s top………

I have noticed that the pundits have been saying that TJX , the discount retailer chain, is a good buy. I therefore was struck by the GMMA daily chart below, which is flashing warning signals. With the short term averages (black lines) now below the longer term averages (red), this is not a stock I would want to own.   It may even be a good short play.   You do know that analysts sometimes tout a stock so that their big clients can unload their long positions to the unsuspecting public. (The “NA” on the chart shows when IBD wrote about TJX in its New America column.) Another stock with similarly weak technicals is PWRD.

TJX--GMMA

Meanwhile, the GMI and GMI-R

Read moreMy post from the bear market bottom; weak TJX; GMMA shows QQQQ in strong up-trend

All indicators positive; beware of gold, STEC, GMCR

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My indicators are all positive again.   There were an amazing 398 stocks in my universe of 4,000 that hit a new high on Friday.   59% of the 4,000 stocks closed above their 10 week averages.   Nevertheless, two rocket stocks I have written about weeks ago are now in downtrends, STEC and GMCR.   GMCR has now closed below its 30 week average.   I hold no stocks that close below this critical average.   It may be wise to buy some puts on these stocks. While gold is still in an up-trend, it declined on Friday with the highest daily volume in more than a year.   Gold may have completed a climax run.   Be careful not to give back all of your hard earned profits.   The dollar is rising and bonds were weak. Maybe higher interest rates are coming. Meanwhile, the GMI

Read moreAll indicators positive; beware of gold, STEC, GMCR

Up-trend continues–check out the Guppy Chart of the QQQQ

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I received few comments regarding my trading philosophy.   Does that mean you all agree with me?   Your comments really do make a difference and inspire me to continue this blog.   So, please keep them coming.   In a few weeks I will begin teaching two courses on TA at the University of Maryland.   I expect that many of my students will be following this blog and I will probably post more content.   The GMI is at

Read moreUp-trend continues–check out the Guppy Chart of the QQQQ

Up-trend continues; some Darvas rocket stocks; daily stochastics declining

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There are a number of stocks that came up in my “Darvas Scan” that are     trading near five year highs and have good technicals and fundamentals. These stocks include: NEU, PCLN, AMZN, NFLX, EGO, LZ, CML, ABV, CBD, WCRX, EW, WES, CPLA.   Some of these stocks may turn out to be rockets if the market up-trend continues.   Meanwhile, the GMI

Read moreUp-trend continues; some Darvas rocket stocks; daily stochastics declining

Market up-trend back on track after bouncing off of Bollinger band; Gold shines, STEC falters.

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Well, the indexes again bounced off of their lower Bollinger bands and the market’s short term up-trend resumed. Note the 5th bounce that I just added in red to the chart I posted on 10/19 after four bounces.  BOLLINGERQQQQ1108 Review that post if you want to understand the logic of Bollinger bands. If only I had the patience to wait for the bounce to enter my long positions! Maybe next time.   The QQQQ is even back above its 10 week average!   So, as much as I hate being whipsawed by the recent decline, if I flew solely by instrument, I would have to be long again.   But watch out for a possible right shoulder forming in a head and shoulder pattern.   If the QQQQ falters before it surpasses the peak reached on 10/21, we could see a large drop, especially if QQQQ closes below the neckline, around 40.6 .   So, if I go long, I will place some close sell stops and monitor QQQQ’s   progress very carefully.   Meanwhile, the GMI is

Read moreMarket up-trend back on track after bouncing off of Bollinger band; Gold shines, STEC falters.