My oversold indicator count is now 4 out of 4. I am looking for a bounce. For example, the T2108 is at 19%, heading towards an area where a bounce might occur and the put/call ratio was greater than 1.0 at Wednesday’s close. I am still in cash and a little short. Since October 8, the first day I identified a new short term down-trend for the QQQ, the QQQ has declined -8.9% and SQQQ (3X inverse ETF for QQQ) has advanced +29.9%. Since the GMI flashed a Sell signal on October 22, the QQQ has declined – 5.7% and the SQQQ has advanced +18%. Clearly the short term down-trend signal provided a better entry, but it is less reliable than the full GMI based signal (I think so but have never tested this hypothesis). The leveraged index ETF’s perform really well when I catch a multi-week trend move. However, they can reverse quickly.
Month: November 2012
24th day of QQQ short term down-trend; in cash and short
The failure of the market and AAPL to bounce back does not bode well for the long side of this market. Best to be on the sidelines in cash or a little short.