Month: March 2009

QQQQ remains in short term up-trend within a longer term down-trend; IBD100-Nicolas Darvas type stocks near all-time highs

@ 2:42 pm
GMI1/6
GMI-R4/10
T210838%

This is an extremely difficult market for me to interpret.   The QQQQ completed the 3rd day of a short term up-trend, and the QQQQ completed its first week back above its 10 week average.   There were 6 new highs and 25 new lows in my universe of   4,000 stocks on Friday.   The last time there were more than 100 new highs was September 19, 2008.   And there are very few stocks that have recently hit a new high and continued climbing.

The GMI is at 1(of 6), and the more sensitive GMI-R is at 4 (of 10).   On the other hand, 94% of the Nasdaq 100 stocks closed with their MACD above its signal line, a testament to the recent strength of the QQQQ.   With the T2108 at 38%, the market is no longer severely oversold, but it could still move up. Note that the QQQQ has been above its 10 week average for one week, while the SPY has been below it for 10 weeks.   Unlike the QQQQ, the SPY contains financial stocks…

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Buying Nicolas Darvas type stocks; New QQQQ short term up-trend

@ 12:04 am
GMI2/6
GMI-R5/10
T210845%

My short term indicators are coming back, although we are not out of the woods yet.   The GMI is now at 2 and the more sensitive GMI-R is at 5 (of 10).   The QQQQ short term down-trend ended after 21 days, and an up-trend has begun.   However, there were only 11 new highs and 17 new lows in my universe of 4,000 stocks on Wednesday. When the QQQQ is in a short term up-trend, I buy QLD (the Ultra long Nasdaq100 ETF)   and look for growth stocks.

Some of the stocks I have written about have came back to life, including TSYS, AMZN and NFLX.   I own some of these.   I ran my “Darvas” TC2007 scan, looking for stocks that would   meet the criteria that he used to select growth stocks.   Among the 11 Darvas stocks in my 4,000 stock universe are six that have also been on the IBD100 lists during the past year:   NFLX, SNDA, GMCR, QSII, LINC and SXL.   I especially like NFLX, GMCR and QSII because they are close to their all-time highs, which was a major requirement used by Darvas when he traded his way to two million dollars during a 2 year period in the late 50’s.   There is no guarantee that these stocks will do well, but I like to make pilot buys in such stocks, put in a stop loss, and then let the market tell me which, if any, will be winners. I then slowly buy more of the winners. To do well in the market, one has to keep the many losses small and pile into the few big winners.

Jon Stewart: media pundits failed us–but I wrote last June that banks and markets looked sick

@ 11:33 pm
GMI0/6
GMI-R2/10
T210822%

It’s is great that Jon Stewart informed the world last week that the media pundits at CNBC   failed to provide accurate information about the impending financial crisis.   But by using technical analysis, I warned my readers last June what the charts were telling me and transferred my pension money   out of mutual funds to money market funds:

“Look at this weekly chart of   Bank of America (red line= 30week average; click on chart to enlarge). Other bank stocks with similar charts include : WB, UBS, STI, and DB.   When major bank stocks are in a free-fall, can the rest of the market be far behind?” (Posted on June 8, 2008)

The media pundits and the financial advisers are self-serving when they try to convince us that we need their wise counsel.   I say that one can rely on the market itself to alert us to danger. I use the TC2007 charting program to analyze the market trend and post my conclusions on this blog.   I know a lot of you have used my blog to protect yourselves….

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