General Market Index (GMI) table

Leslie  Masonson has an upcoming book on the TQQQ ETF profit machine. It should be available soon. The GMI=4 (of 6) and is still Green.

Given that I am a chicken, I sometimes follow my emotions rather than my rules. I tell you when my actions work and when they do not. Given the reversal of QQQ on heavy volume from all-time highs (red dot) on 7/31 and the subsequent high volume decline on 8/1, I exited my positions in my trading account even though my stop losses had not been tripped- a huge mistake because many of my stocks held up. However, when the market bounced and had a Blue Dot oversold bounce signal, I slowly bought back in. Please remember that I am a chicken in my trading accounts. However, I rarely exit my mutual funds in my university retirement accounts, only when the longer term signals I frequently post about turn down. We are not near that type of signal.

So here is the daily chart of the QQQ with its blue dot signals. Spy also has a similar pattern. The key to trading successfully is to be able to reverse one’s positions when new signals arrive. Many small losses and a few large gains is what I strive to achieve. With the QQQ short term trend count at 73, I expect an end of the current up-trend might occur at any time. On Friday there were 141 yearly highs and 50 all-time highs, but only 46% of the 6200 US stocks rose. However, 65% of the Nasdaq 100 stocks rose. Thus, the strength has occurred primarily among the tech and growth stocks represented by the QQQ. One of the components in my GMI, 10 day Successful New Highs among the 6200 US stocks is only 47% and has been below 50% since 7/29. This means that the majority of US stocks that reached a 52 week high 10 days ago are not higher 10 days afterwards. Break-outs are failing. So I always have one foot out the door in my trading accounts. All of my positions have stop losses and I do not have to be glued to the monitor each day. Stop losses are accurately named. They stop my losses. They are the sine qua non of trading. I studied Latin for 6 years at Boston Latin School. I explained my Blue Dot of Happiness setup in my recent presentation at day 6 of the TraderLion Annual Conference 25. Check out the free recordings for Day 6. As you may recall, Richard Moglen, the leader of the conference is my former illustrious student.

I had written on Thursday after the 8 EMA support line was violated, that I was becoming more defensive, and then we had a tough day on Friday. QQQ and SPY declined on heavy volume. A flat or down day on Monday would begin a new QQQ short term down-trend, after 68 days. If we then break below the green line it would constitute a failed GLB. This chart shows that the 10.1 daily stochastic is well below 20 (5.88), which is very oversold. It needs to turn up above 20 to trigger a blue dot, like it did on June 23 at the start of this nice rise and a GLB (green line breakout).  QQQ is also resting on its lower 15.2 Bollinger Band, which could serve as support. Also, when Mag 7 stocks report earnings and have steep declines (META, MSFT, AMZN, AAPL) it does not bode well for the growth stock market. With the dollar declining with interest rates, GLD may be the place to be. GLD bounced off of its lower 15.2 daily BB and had a blue dot on Friday, see daily chart.

The GMI is at 3 (of 6) and could decline to 2 on Monday. Note how many of the short term components in GMI2 are negative. I am  cautious and defensive until this decline ends.