I will be sharing the platform with Alan Ellman at the DC AAII workshop on July 15. Alan is an expert on teaching people how to use options for generating income. Many of his terrific books are listed on my site. Alan’s site is here. I will be talking about assessing the market and picking GLB growth stocks in a yellowband up-trend that might be useful for people applying Alan’s techniques. Alan is a retired dentist and real estate investor who taught himself successful stock investing and has specialized in teaching people how to use options for income. He is a very engaging and passionate speaker about this topic and I thoroughly enjoy listening to him. You may also get an opportunity to meet my stock buddy, Judy.
The market is divided again short term but all 3 index ETFs remain in longer term Stage 2 up-trends, above their rising 30 week averages (red line). The SPY and DIA also remain above their critical 10 week averages (dotted line). But the QQQ is now below this important level and the GMI has now turned Red. If I had to guess at the resolution, I would say that tech stocks have completed their post earnings release lull swoon and are setting up a rise into release of 2nd quarter earnings. I would therefore not be surprised to see a rebound this month. But my job is to follow the trend and not try to predict it. So my approach is to be defensive yet ready to move up with the market if growth stocks move up.
Here is the yellowband chart of QQQ. Note recent red volume spikes and QQQ closed below 10 week average (dotted line).
SPY remains above 10 week average.
DIA looks strongest.
In this pugnacious world environment, the defense stock ETF, XAR, is hitting all-time highs, after its GLB last November.
The GMI= 2 and has now been below 3 for two consecutive days, triggering a Red signal. A Red signal can often come at the bottom of a decline and may not persist. A GMI= 0 is a much more significant sign of weakness fir me. All 8 of my more sensitive indicators in the GMI2, focusing mainly on the QQQ, are negative.