Month: June 2010

According to my indicators, the market has moved to an up-trend.   The GMI is now 4 and the GMI-R is 7.   Wednesday was the first day of the new QQQQ short term up-trend.   I am slowly adding to my positions   in QLD and other growth stocks. I remain vigilant for any signs that this rally will fail.   The key is to have many small losses and a few large gains.   Anyone who cannot tolerate and take small losses quickly should not be in the stock market.

The GMI is now at 3 and the GMI-R is 6.   As I wrote yesterday, it was possible that the major indexes would turn and break through their key moving averages.   This happened, and if the QQQQ holds on Wednesday, I will start a new short term up-trend count.   I like the QQQQ to stay above its key average for two days before I identify a change in trend.   The fact that the Worden T2108 Indicator is recovering, now at 42%, suggests a meaningful swing to the bull side. 94% of the NASDAQ 100 stocks have their MACD above its signal line, a sign of short term strength.   Many pundits are talking about the possibility that this rise is just   forming   the right shoulder of a head and shoulders top. The fact that many predict this top, makes me more skeptical that it is true.   So I have closed out my shorts and have taken beginning positions in QLD and a few growth stocks.   If this rally continues, I will add to these positions.   If the up-trend fails, I will sell out.

While a number of my internal indicators are getting stronger, the market indexes failed to break through important moving averages on Monday.   The GMI is at 0, and the GMI-R is at 3.   The Worden T2108 Indicator, at 27%,   is moving up out of oversold territory.   On Tuesday, the averages will likely either break above their key moving averages or resume the decline.   Monday was the 28th day of the QQQQ short term down-trend.