My short term trend indicators barely held up on Wednesday. I am largely in cash in my trading accounts. This has been an extremely tough market for me to trade. I need a nice, well defined longer term up-trend!
When a break-out growth stock like QCOR can reverse so quickly (see daily chart below), down 21.8% on Tuesday, it is often a sign of future market weakness. I sold my QCOR at a loss on Tuesday. CSTR, CMI, CAT, BIDU, DDD and ISRG also had declines, although smaller than QCOR’s.
The GMI-2 fell to 2 and IBD now considers the market “up-trend under pressure.” The 10 week average is now below the 30 week average for the QQQ, DIA and SPY. This is a serious sign of potential longer term weakness. In addition, the DIA and SPY both closed below their critical 30 week averages. QQQ is only .35 of a point above its 30 week average. If QQQ closes below its 30 week average, I will exit the market. I have a cardinal rule only to be in the market if it is in a Weinstein Stage 2 up-trend, defined as closing above its rising 30 week average. I am raising cash in my trading accounts and closing out any position that has not worked out the way I anticipated. If the 30 week average of the QQQ curves down, I will go to cash in my university pension.
Markets remain in an up-trend. Adding to QLD. QCOR, which I wrote about in June, had a nice day on Monday, up 14.75%. Check out this monthly chart, where the green lines show the tops of each base. QCOR, which came up in my Darvas Scan, recently broke out of its latest base. Click on chart to enlarge.
Be careful with the release of jobs report Friday morning. Market remains in up-trend, but we could get some quick weakness and then come back strong next week going into 2nd quarter earnings. The T2108 remains at 81%, a very high level. The rise in AAPL and GOOG masked weakness in the Nasdaq 100 stocks. Only 36% of them rose on Thursday.
Stocks held up well on Monday. A lot of my stocks hit new highs, including ASPS, ALXN, DDD. AAPL is akso coming alive as we approach second quarter earnings. This market looks like it wants to go up. I bought some QLD and will average up slowly. There is an abbreviated trading day on Tuesday.