Blog Post: GMI= 0, was 6 for 24 days at market top; 1,115 US stocks at new lows Monday; I am waiting for T2108 to signal a likely bottom, see monthly chart and rationale

@ 6:44 pm
GMI0/6
GMI-21/9
T210814%

On May 12, we had 1,625 US stocks at new lows. So today’s number of 1,115 is not as extreme. The GMI is now =0. It is so much easier to make money buying stocks when the GMI is Green and =6. The last time the GMI= 6 was November 18, near the market top! It had registered 6 for 24 straight days.

However, the indicator I find most useful in discerning a bottom is the Worden T2108 indicator. It can be found daily on TC2000 or created manually on other charting programs. I post T2108 every day on this blog. T2108 measures the percentage of NYSE stocks that are above their simple 40 day moving average. This monthly chart shows that T2108 is extremely low when it reaches single digits, below the green line. It closed today at 14% and dipped intraday to 9.2%  at the bounce on May 12.

Every year I tell my class that one should back up the truck and buy some SPY, not an individual stock, the next time T2108 is below 10%. I tell these aspiring undergraduates to use a very small percentage of their account and then to accumulate more only as SPY moves up and the bottom is in. However, each time T2108 gets that low I am usually too scared to buy SPY. That is because in order for stocks to become so oversold, the news is usually very scary. Since I went to cash in November, I promise that this time I will buy SPY,  I hope…..

Blog Post: Day 1 of new $QQQ short term down-trend and GMI= RED; How I use my Weekly 10:30 charts for indexes, stocks and mutual funds and gold

@ 9:29 pm
GMI1/6
GMI-22/9
T210826%

Last week I tweeted,  @WishingWealth, how my Weekly 10:30 charts helped me to stay on the right side of the market. As long as the 10 week average is above a rising 30 week average the market is in an up-trend. When the reverse is true it is time for me to be short or in cash. The Weekly 10:30 chart helps me to know the trend but I use finer criteria to time the exact entry or exit.

In addition, I do not want to hold or purchase any security unless it has the 10 week above the rising 30 week. See how these weekly charts show the trend of both a stock and a mutual fund. The 10 week average is the dotted line. The gray line in the background shows the weekly closing price. When the weekly close is below the 30 week average I become defensive and look for a possible exit.

QQQ is in a down-trend.

As is SPY.

And GLD closed back above its 30 week average and may be turning up.

And the GMI is 1 (of 6) and back to Red.


Blog Post: $QQQ short term up-trend could end after 3 days and GMI could go back to Red after 2 days, 100% in cash, these charts tell the story

@ 10:21 pm
GMI2/6
GMI-21/9
T210836%

I have rarely seen my indicators whip-saw like this.  Only one US stock out of 7,022, PAG, passed my weekly green bar scan. Time to be in cash. QQQ is back below key daily moving averages.

And this weekly chart shows a steady down-trend with the 10 week average (dotted) below a declining 30 week average. We cannot fight the tide. How easy it was to profit buying stocks when the 10 week was climbing above the rising 30 week. It makes sense to me to wait for that pattern to reappear.

Similar story for SPY.