Stock Market Technical Indicators & Analysis
Dr. Wish The GMI and GMI-2 are both a their maximum values. IBD still sees the market in a correction………
There is a new ETF that focuses on cyber-security. I thought you might like to investigate HACK. It does look like it is a little over extended though, trading above its top BB. Here is its entire daily chart.
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!)
With the GMI back to 5 and the short term trend about to turn positive, it looks like we may have had another small and short lived correction. IBD still sees the market in a correction and is waiting for a follow-through day to this current snap back rally. I still think this rise could be a brief bout of year end mutual fund buying (window dressing) that could quickly disappear with the new year. So I must be very nimble and ready to exit if the market fails to surpass its recent peak of 2079 on the S&P500 and 106 on the QQQ. Below is the daily chart of each index. This rally seems a little too frenetic to me–climax run? Given that the market always falls quicker than it went up, the next decline will likely be a doozy. Note the 30 day average (red line) of both indexes is flat, which often leads to a lot of whip-saws. Failure of these averages to hold this line on Friday would be a very bearish sign to me.
