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A green line is drawn on a monthly chart at the highest price bar (ATH) that is not exceeded for at least 3 months (bars). It shows a stock strong enough to reach an ATH that then rests for at least 3 months. When it breaks out to a new ATH (green line breakout, GLB) it can signal the beginning of a major move. A stock that reached an ATH and then declines so a new green line can be drawn needs to overcome all of the sellers who  bought at higher prices (equals overhead supply).  It may never do so. It therefore is a sign of strength when a stock can have a GLB to a new ATH. See the successful GLB tracker on this blog for a few examples of stocks that rose after a GLB.

$QQQ was floating well above its rising 4 wk average (red dotted line) last week. That is a sign of being extended. This week it has returned to this important line of support. We have to see if it will close the week above this line. If it fails to, the next line of support is the 10 week average (blue dotted line). A failure to hold there would be a sign of significant weakness and a possible change in trend. I am mainly in cash in my trading account, having been stopped out of my positions.

I do not know how long this market can continue to rise based on the few stronger large cap stocks. Only 31% of NYSE stocks have closed today above their 40 day averages (T2108 indicator).  In contrast, 55% of the Nasdaq 100 stocks have closed above their 50 day averages. I bought a little GLD after it registered a Blue Dot of Happiness oversold bounce. If this bounce fails I will exit. Are people seeking refuge in gold again? My longer term market indicators remain bullish, however. GMI=5, and it is Halloween!