ETF

Up-trend in 7th day: T2108: 58%, out of over-sold territory; homebuilders recover; GMI: 2; GMI-R: 4

@ 7:46 am

The markets continue to improve.  The QQQQ sort term up-tend has completed its 7th day.  The Worden T2108 indicator (58%) is well out of over-sold territory, but still far from being in over-bought territory (>70%).  The GMI and GMI-R remain at 2 and 4, respectively. It is important to watch what the market is doing and to tune out everything else.

Xhb

This daily chart shows that the homebuilders ETF, XHB, is starting to recover.  It is above its 30 day average (red line) and the 10 day average (dotted line)  is now above its 30 day average.  This is the first time these technicals have looked so good, since the rise last August and September.  (About a week ago I sold  cash secured Dec. 12.00 put options on XHB.) The short term trend for homebuilders has changed to up, at least for now……..

Up-trend solidifies; T2108 highest since early September (54%); GMI: 2; GMI-R: 4

@ 7:58 am

The GMI and GMI-R are back to 2 and 4, respectively.  The QQQQ short term up-trend has continued for 6 days, and typically an up-trend lasts for a while after it passes 5 days.  The Worden T2108 indicator climbed 22, to 54% and is now at its highest level since September 2nd.  73% of Nasdaq 100 stocks closed above their 30 day average, the most since August 28th.  This market continues to gain technical strength.  I find that I must tune out the media, who are embracing  an ever declining bear market.  Last weekend I became optimistic after studying my charts and then became very anxious when I listened to the Fox channel business shows on Sunday morning.  The pundits tend to drive with their hands on the rear view mirror. The truck/car is moving up and I am slowly jumping aboard.  I can always jump off when it changes direction.  I am gradually accumulating the ultra long index ETF's, QLD and DDM. Two of the stocks on my IBD 100 lists hit a new high yesterday, CWT (a water stock) and ALGT (I own some).  In addition, it looks like all of the cash secured puts I wrote about several posts ago will expire on Friday unassigned, and highly profitable for me.  In early January I will consider selling a new batch of cash secured puts. My university pension funds will remain in cash until the longer term trends turn up. Until they do, I consider this to be a short term rally within a solid down-trend.  But short term rallies are tradeable for me……

GMI: 2; GMI-R: 4; Up-trend imminent? T2108: 38%

@ 11:00 am

The GMI has risen to 2 (of 6) and the more sensitive GMI-R to 4 (of 10).  Monday was the 69th day of the current QQQQ short term down-trend–and if the QQQQ holds today, it will be the start of a new short term up-trend.  While my longer term indicators remain in a down-trend, this looks like the first short term up-trend in  the QQQQ since the last one ended on August 29.  63% of the Nasdaq100 stocks closed above their 30 day average, the most since August 28.  The Worden T2108 indicator is now at  38%, the highest level since September 19, and well out of bottom territory.  Over 90% of the stocks in the Nasdaq100 and S&P500 stock indexes have a MACD above their signal line.  Bottom line:  This is not a time for me to be short.  I have begun to nibble at the ultra-long indexe ETF's, DDM (for the Dow) and QLD (for the Nasdaq100).  But, my major buying will come if these indexes hold on Tuesday.  I always wade in slowly and only add to my position if prior purchases are showing a profit.  When I am crossing the street and a truck is bearing down on me, I do not argue about its presence or hope that it will stop–I get out of the way or jump on board.  If a new up-trend becomes evident, I will jump on board. The reasons for the change in trend always become clear well after the turn.