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Tuesday was the second day of the new QQQ short term down-trend and the GMI has hit 0………..

With the apparent completion of a head and shoulders top pattern for AAPL, a decline to around $80 is likely. AAPL has also now begun a BWR down-trend with all of the shorter averages (red) now declining below the falling longer term averages (blue). For me, AAPL is a short or at least a stock to avoid. It is about to join the ranks of CMG as a broken stock, at least for now. I only buy stocks in RWB up-trends. Note the difference in the AAPL pattern, before versus after the summer began.

And here is CMG.

And yet the CNBC pundits tonight were debating whether one should hold AAPL. A picture is worth a 1000 words. There is no reason for me to hold a stock in a BWR down-trend other than masochism or financial suicide.

And before the open on Tuesday, Jim Cramer was talking up the virtues of FIT. The stock fell more than 18% during the day. Beware the media pundits!!!!!

IBD switches back to calling the market in a correction. The GMI, however, has remained on a steady Sell signal since December 10 and was not fooled by the end of year volatility. Monday’s action created a huge gap down with the index trading below its lower Bollinger Band. The market closed near its high for the day and the retracement has likely begun. I suspect the market may move up and fill the gap, but I remain skeptical of any near term rally. A lot of technical damage has been done to this market and the market leaders have been wounded. It felt great to watch this decline from the sidelines, in cash.

The GMI remains on a Sell signal but my QQQ short term trend count has turned up. I do not trust a change in trend until it reaches the 5th day. The QQQ met resistance around 114, as I suspected it might. The market indexes are moving around flat moving averages and are subject to whip-saws until a new trend develops. Next year things will become more clear. Until then, I wish a Happy New Year to all of my guests.