Arrow shows trading after hours! Better to exit when the RWB pattern first disappeared. Best to hold stocks in RWB up-trends.
Blog Post: Day 12 of $QQQ short term down-trend; Adapted GMMA charts of $BA, $NFLX, and $CAVA illustrate the patterns to look for before trading any stock or ETF
We want to buy or hold stocks/ETFs that are closing repeatedly (dotted line) above all of the shorter averages (red lines) which in turn should be rising above the longer term averages (blue lines) so that there is a white space between them=RWB pattern. The opposite pattern, BWR, shows a down-trend. BA shows a RWB pattern turning into a BWR pattern. There is no excuse for riding a BWR pattern. This is a daily chart. A weekly chart shows longer term patterns the same way. When the white space disappears it is time to exit until a new trend develops. NFLX and CAVA are also showing signs of weakening. Wait until a stock closes back above all of the red lines. We want the closing prices (dotted line) to be leading the red lines higher.
CAVA is no longer in a RWB up-trend.
Blog Post: Day 11 of $QQQ short term down-trend; Only 17% of NASDAQ 100 stocks closed above their 50 day averages; Revised GMI table now includes the Weekly 10.4 Stochastic, a key indicator of a rising market or stock, see $QQQ and $NVDA; Cash is King!
I recently discovered that the weekly 10.4 stochastic is a great indicator for an advancing market or stock. I am now recording the value in the last line of my GMI table, see below. Look at this weekly chart of QQQ. Note that the strong advancing market typically has a weekly 10.4 stochastic >=80 for many weeks in a row. This stochastic basically shows whether a stock is currently near the top of its range over the past 10 weeks. A daily stochastic with a value >80 is typically considered to be a sign of being overbought. But for a weekly time period it tells me that the stock or index is currently close to the top of tis 10 week price range. Isn’t that what we want to see in advancing market indexes or individual stocks? QQQ’s current 10.4 weekly stochastic is now=55, indicating to me the end of the recent multi-week advance. Most of my scans for strong stocks now require that the stock have a weekl y10.4 stochastic>80 for 5 or more weeks in a row. That is a strong rising stock. Here are two examples. Try it out.
