Stock Market Technical Indicators & Analysis
The QQQ short term up-trend reached the 5th day but another down day on Tuesday could turn the short term trend down. Only 4 stocks were found by my scan that looks for stocks that hit a new 52 week high and have good fundamentals: DG, GNRC, OKS, ASPS. ASPS hasn’t closed below its 10 day average since October 21! The 10 day average in this daily chart is the blue dotted line. Click on chart to enlarge.
If the market holds on Monday the new QQQ short term up-trend will have reached 5 days. At that point I will add to my position in QLD. It is also the 7th day since my GMI based strategy flashed a buy signal. While I am not ready to release our recent analysis of how this strategy has worked since late 2006, I can tell you that the strategy outperformed a buy and hold strategy while keeping me out of the market during market declines. While past results do not guarantee future results, I am confident enough to go long QQQ or QLD when the GMI has flashed a buy signal and remains bullish. 
Meanwhile, the GMI remains at 6 (of 6) and the GMI-2 is at 5 (of 6). The Worden T2108 is at 59%, in neutral territory. 78% of the Nasdaq 100 stocks closed with their MACD above its signal line, a sign of short term strength. Both the SPY and QQQ have now closed above their 10 week averages for two weeks. The QQQ daily stochastics reached an overbought level and recently that has led to a rapid decline. The fact that the market held on Friday is a very positive sign. Continued strength would signal to me a change in trend and a break out of the trading range it has been in.
My scan of stocks with good fundamentals that hit a new high on Friday yielded 13 out of more than 5,000 stocks: ORLY,ARG,DCI,HIBB,QCOR,CRMT,FICO,HSNI,SWI,DXPE,GNRC,HPY,SMP. Four of these also came up in my DARVAS scan: QCOR,FICO,SWI,DXPE. These stocks are worth researching for possible buys. As this weekly GMMA chart shows, QCOR has been a powerful RWB rocket stock for some time. Click on chart to enlarge.
While the GMI barely held to 6, the more sensitive GMI-2 fell to 3. Another flat or down day in the QQQ will change its short term trend to down. The QQQ daily 10.4 stochastic is in overbought territory at 84 and has crossed below its longer term average. Over the past few months, this pattern has signaled the start of a decline. See the chart to the right. The Worden T2108 fell to 44%, but is still in neutral territory. 
So, I lightened up yesterday on QLD and bought a put on one stock. IBD still considers the market to be in a correction and suggests staying in cash. Only two stocks came up in my good fundamentals+new high scan: ASPS and GNRC. ASPS broke $50 for the first time.