General Market Index (GMI) table

Draw green dot signals on charts; $SSTI $SFIX; GMI to turn Green? Trade deficits bad?

@ 7:45 pm
GMI4/6
GMI-27/9
T210861%

One of my favorie buy set-ups occurs with stocks or ETFs in a nice up-tend (Stage 2) that have a green dot signal. I explained the green dot signal in an earlier post. If you have TC2000, you can go to my club (Dr. Wish) and access the tutorial that David, my co-instructor, made for our students for automatically placing green dots on charts. Just go to my club in the publishing center in your TC2000 Library tab (Club= Dr. Wish)  and select the video from the list at the bottom. There are also tabs at the top of this blog to access these resources. My blog glossary explains the many scans I have also stored in my club.

Here is the daily chart of the QQQ with green dot signals. Note that all green dot signals do not work and if it were possible to predict in advance which ones will, I would be living on my own island. The nice thing about the green dot set-up is that if the bounce fails, I can get out quickly with a small loss–the crucial sine qua non of trading success. Note the recent green dot, calling the QQQ’s current rise.

Last March, I opined about SSTI at 23.54. It subsequently took off without me and I have been waiting for another entry. Well, it had a green dot on Friday. Note the series of higher green dots.

$SFIX, a recent IPO,  had a green line break-out (GLB, see glossary)  to an all-time high (ATH) on the weekly chart, Friday and a green dot (see daily chart). (I exit immediately if a stock closes back below its green line.)

 

I also posted in my club today a watchlist of 60 stocks that hit an all-time high (ATH) on Friday, ATH07032018– I should have labeled it 07062018!   If the market advance resumes, stocks rapidly hitting all-time highs can be among the leaders. So I will watch this list for future green dots.

All of the above are educational resources and are not intended to serve as advice or recommendations. One needs to experiment with these tools and learn how to use them, if at all. In late August, I begin a 14 week class of 200 undergraduate freshmen who are right out of high school. I wish someone had taught me technical analysis at their age…..

The GMI may turn Green and the QQQ short term trend count may turn up with an up day on Monday. Note the QQQ has closed above its 10 week average for 10 weeks, compared with the SPY, at only 1. The fact that the market did not sink amidst the trade wars is very bullish. How long will it last?

Many years ago I attended a lecture during which a very smart pollster questioned our country’s complaints about a trade deficit. He said, if other countries want to sell us their goods and products for our paper money, what is the problem? I add, since the U.S. is the most prosperous economy in the world is it not a fitting sign of strength for the U.S. to be able to buy a lot more than it sells to other countries?

 

 

$SPY sitting on 30 week avg and below 10 wk, $QQQ stronger

@ 8:09 pm
GMI2/6
GMI-23/9
T210849%

This is a critical week for the market. Failure of the SPY to hold its 30 week average (solid red line) will suggest to me a failed rebound and the likely beginning of a Stage 4 down-trend. Weakness is likely now anyway because of the end of the 2nd quarter and associated mutual fund window dressing. The 4 week average (red dotted line) is now curving down, a sign that the recent rebound is over. The time to be in the market is when the 4 week average is climbing, as was the case during much of 2017. That is when making money on the long side is much easier. The SPY would have to retake its 4 week average for me to buy stocks again.

The 4 week average of the QQQ is also turning down, but the QQQ is stronger, as it remains well above its 30 week average.

The GMI remains Red, at 2 of 6. I changed the 6th component of the GMI2, substituting  an oversold daily stochastic for a close of the QQQ above its 5 month average.

World markets weaken more; $GS and global banks weak

@ 9:17 pm
GMI5/6
GMI-26/9
T210863%

Last weekend I wrote that only 6 of 38 country index ETFs I follow were above their rising 30 week moving averages (Stage II up-trend). Now there are only 3–US (SPY), Ireland (EIRL) and Israel (EIS). The markets around the rest of the world are flashing signs of weakness. I have sold all my positions  in my trading accounts and remain in cash in my university pensions. Chickens live to fly another day. If one cannot be out of the market then s/he may be addicted to the thrill of trading. All of my trading gurus, including Jesse Livermore, have said that there is a time to be on the sidelines.

After failing to hold its green line break-out (GLB, see glossary) earlier this year, GS is now in an unfolding Stage 4 down-trend. When GS is ill, it is ominous for the entire market. (see weekly charts)

The global bank index is also forming a Stage 4 decline. I rest my case.

Meanwhile, reflecting the strength of the US markets, the GMI is at 5 (of 6).