Stock Market Technical Indicators & Analysis
The odds are against one making money by buying growth stocks at new highs. Only 22% of the stocks that hit a new high 10 days ago closed higher Tuesday than they closed 10 days ago. And there were only 70 new highs out of 5,950 U.S. stocks. With odds like these one is gambling by staying long. I am in cash with the GMI=2 and likely to turn Red tomorrow. Even the Dow is weakening.
And the Russell 2000.
QQQ is just below 30day and 50 day averages. Should be resolved soon.
This chart shows that QQQ has fallen back below all 12 daily moving averages. Could form a daily BWR down-trend. The pundits are talking about rotation from tech to value stocks. But in my experience, tech has always led. It could be we are seeing a top in tech to be followed by a top in the other stocks after the laggards rise a little. Sell in May is also on the horizon. This is the time to be in cash and on the sidelines. The market discounts the future. It rose during the pandemic as it focused on the coming recovery. It would not be unusual for the market to decline during the economic recovery as it foresees inflation, higher rates and an exploding budget deficit. I prefer to stand back and wait for Mr. Market to reveal his intentions.
Note that the QQQ has been below its 10 week average for 4 weeks while SPY has remained above for 7 weeks. The GMI remains on a Green signal. Beware if it Turns Red.
