The QQQ short term down-trend only lasted 4 days. I have written that short term down-trends often last under 5 days and that I do not trust a short term trend change until it persists for at least 5 days. The GMI Sell signal also only lasted for 4 days. As of Friday’s close the GMI signaled a new Buy. IBD still sees the market in a correction.
I expected December to end strong because of mutual fund window dressing. But when the GMI issued its Sell signal, I shed most of my long positions. The bounce we have had looks a lot, technically, like the bounce we had in mid-October. The QQQ bounced from its lower 15.2 daily BB. So maybe it will persist. If I fly by instrument I would go long here. But my instinct is to hold back for a while. I just do not trust this bounce. Are the problems that precipitated the recent decline really over? So, for now, I am mainly in cash. (I may prove to be the ideal contrary indicator!)