Blog Post: Day 3 of new $QQQ short term down-trend and the GMI turns RED; the 10:30 weekly chart shows the long term trend for $QQQ remains intact

@ 9:31 pm
GMI1/6
GMI-24/9
T210851%

I am on the defense in my trading account. I hold some SQQQ, a 3X leveraged ETF which is designed to  rise three times as much as QQQ falls. It is the opposite of TQQQ which rises three times as much as  QQQ rises. I noted last post that in the past few years 40% of the new QQQ short term down-trends have ended within 5 days, so I must be nimble and act fast if the current down-trend should end this week.

It is disconcerting that the GMI has now turned Red. While QQQ remains in a Stage 2 up-trend, the GMI is telling me to be on the defensive. Breakouts will be more likely to fail. And with fewer than 100 stocks hitting new highs each day, betting on stocks at new highs to continue rising is a difficult game to play right now. The strength of new highs  is also measured by the first component in the GMI table. Only 34% of the stocks that hit a new high 10 days ago closed higher Friday than they closed 10 days earlier. QQQ has now closed below its 10 week average, a significant sign of technical weakness. The last time this occurred was last March near the beginning of the new up-trend. Unless QQQ should close below its 30 week average I remain invested in my long term conservative accounts.

The 10:30 week chart below tells the story. The gray line plots the weekly closes. The red line is the 30 week average and the dotted line is the 10 week average. As long as the 10 week average is rising above the rising 30 week average it is a strong Stage 2 up-trend.

 

If QQQ should close below its 30 week average, the sole remaining positive component of the GMI would turn negative and the GMI=0. I exit the market when that happens. Note that the two stochastics indicators in the GMI2 are <20. QQQ is very oversold short term and a bounce could occur soon. I do not follow the GMI2 total at all. The GMI2 table is there just to remind me to record its components after each market close. The GMI2 components are not all positively correlated with the market. Note that SPY and DIA remain above their 10 week averages. The tech stocks in QQQ are the source of its weakness.

 

Blog Post: Day 1 of new $QQQ short term down-trend and GMI=3. Many fallen angels, $SMCI, $AAPL, $CMG; Buying $SQQQ now; Buying $TQQQ on Day 1 of the recent $QQQ short term up-trend would have produced +40% and beaten almost all individual stocks….

@ 9:47 pm
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GMI-24/9
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Many darling stocks have hit air pockets, SMCI, CMG, AAPL to name a few, see weekly chart. And NVDA has closed below its 10 week average for the first time since January 6, see weekly chart below.  Sell-offs are happening even after earnings beats. And we are entering the weak post earnings release period. Many down markets end in October after a wash out–“come back at Halloween.” I have found that about 40% of new QQQ short term down-trends, as I define them, end in 5 days or less. I bought a little SQQQ on Wednesday and will accumulate more as the down-trend progresses, especially if it can pass a fifth day. I am also concerned that the GMI could fall to 2 and trigger a Red signal if the IBD Mutual Fund Index (0muti) closes below its 50 day average. It is right on it now. If inflation cools and the Fed lowers rates it will be off to the races again. But keep in mind that we may also be headed to a government shut down in late September (thank you, Judy).

While I remain invested in mutual funds in my longer term university retirement accounts, I am in cash with a little SQQQ in my IRA trading account. When the QQQ short term trend turns up again, I hope to  buy TQQQ. If one had bought TQQQ on Day 1 of the QQQ short term up-trend on 4/28/23 one would have an increase of +40.5% through today’s close. That would have beaten 95% of the Nasdaq 100 stocks and all but 4 of the S&P500 stocks. Why do I not have the discipline to do that every Day 1 of a new QQQ short term up-trend? I guess I would rather try to find the rare needle in the haystack that beats TQQQ. Did any of my readers buy and hold TQQQ?

Blog Post: Day 70 of $QQQ short term up-trend, it could end on Wednesday; 91 US new highs and 68 lows; Two stocks had high volume GLBs: $CEIX and $IHG, see daily and monthly charts

@ 9:41 pm
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GMI-24/9
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Even as many stocks are weakening many stocks hit ATHs (all-time-highs) on Tuesday and these 2 had a GLB (green line break-out) into new high ground after consolidating for at least 3 months. Note the above average volume. Each reported earnings on Tuesday.  They are worth investigating. A close below the green line would be a failed GLB and reason to exit. Note the black dots showing oversold bounces.

Here are their monthly charts.