I have closed out most of my positions, with the current market weakness. I still own an ultra bullish gold ETF, DGP. The last time the GMI registered 3 was on November 23, during the last weak period in the market. IBD says we have had 5 recent distribution days for the Nasdaq and 4 for the Dow and S&P500 indexes. Distribution days are high volume advances or declines in the indexes and are used by William O’Neil to help determine a likely change in the general market’s trend. For more information on this terminology, see William O’Neil’s book, How to make money…, listed to the lower right. A few more declines would reduce the GMI quickly to confirmed sell territory. Meanwhile, the short term trend of the QQQQ has turned down, after 65 days of an up-trend. The longer term trend (weekly) remains up.
I therefore remain mainly in cash and will consider buying an inverse (bearish) index ETF like QID or SQQQ that rises when the market declines. When I think the market’s trend is changing I slowly accumulate the appropriate ultra bullish or bearish index ETF.
The price of gold has been surging, as shown by the ETF, GLD. It will be interesting to see if it breaks through the area where it was turned back three times in Nov and Dec.