GMI falls to 5; Gold in Stage 4 downtrend; Is TSLA beginning one?

@ 7:02 am
GMI5/6
GMI-24/9
T210849%

My market indicators are weakening, with the GMI back to 5 (of 6) and the GMI-2 at 4 (of 8).   I am much more defensive in my trading accounts. My longer term university pension remains 100% invested in mutual funds.

I wanted to show you why I have been bearish on gold for a long time.   This weekly chart of GLD shows that it has been in a Stage 4 down-trend since early 2013. I would not own GLD (or any stock) until it comes back above its 30 week average (red line).

WeeklyGLD11212013

With that in mind, take a look at the weekly chart of TSLA.   TSLA is now below its 30 week average.   It is too early to know if it will enter a Stage 4 decline, but I would not own TSLA until it comes back above its 30 week average (red line). I alerted readers several weeks ago when TSLA was at 173 and broke below its 10 week average (blue dotted line), a critical sign of weakening in a growth stock.

TSLAweekly11212013

 

 

28th day of QQQ short term up-trend but GMI-2 down to 4 (of 8); ONVO tanks with 3D stocks; Getting defensive

@ 5:53 am
GMI6/6
GMI-24/9
T210853%

While the GMI remains at 6 (of 6) my most sensitive short term indicators have weakened, with the GMI-2 now down to 4 (of 8). We are likely in the post earnings release period when stocks weaken until we get close to the next quarter’s earnings release,   in January. With the GMI at 6, the longer term up-trend remains intact.

Meanwhile ONVO and the other two 3D stocks I follow swooned on Tuesday.   ONVO fell almost 25% on its highest trading volume ever, an ominous sign of weakness. It also failed its green line break-out. Below are the daily charts for ONVO, DDD and SSYS. When a hot sector like 3D fails badly, it often foreshadows a decline in the greater market.   I have become defensive and have greatly reduced my holdings in my trading accounts.

ONVO11192013DDD11192013SSYS11192013

 

27th day of QQQ short term up-trend; Bollinger Band constrains QQQ and gives me an edge

@ 9:24 pm
GMI6/6
GMI-27/9
T210857%

QQQ fails to break above top Bollinger Band (15,2) and bounces down.

QQQdaily11182013I look for support at the lower band, around 81.77. I find that the 15 day 2 standard deviation   Bollinger Bands are very useful for identifying short term support and resistance levels for the index ETF’s. Just look at the daily chart below to see how prices stay within the bands. A move outside the bottom band is often a sign that the index will reverse up. However, if the lower band is broken and starts to turn down, it often tells me that a larger decline is imminent. While not perfect, the BB’s give me an edge when interpreted   in the context of other confirming indicators. You can plot Bollinger Bands yourself on most stock charting programs.   Freestockcharts.com is a simpler, free version of TC2000 (the subscription software I use).

QQQBBchart