Blog Post: Day 28 of $QQQ short term down-trend; GMI=0 and Red; I exited in November and do not have to catch the bottom, I can wait patiently for the signs of a new up-trend

GMI0/6
GMI-20/8
T210816%

With the GMI=0 I am content to wait for the end of the decline. I got out of the market in November and I do not have to try to guess the bottom. As long as I get back in at a price lower than where I sold I have done well and avoided all of the stress of a large drawdown. Too many people think they have to catch the bottom–ridiculous! It is so much easier to make money going long when the GMI is on a Green signal.  That occurs when there are two consecutive days with the GMI>3. I will also want to have the indexes in a weekly RWB up-trend. See below that QQQ is in a weekly BWR down-trend with all of the shorter averages (red lines) below the declining longer averages (blue lines). It looks like this may even be the beginning of a major down-trend. However, I do not become attached to a scenario.  I just wait for Mr. Market to tell me his direction.

 

Blog Post: Day 18 of $QQQ short term down-trend; $QQQ on trend channel line, may bounce; Chocolate, $HSY, anyone?

GMI0/6
GMI-21/8
T210827%

QQQ has approached the trend channel line (TCL) I drew weeks ago and may bounce. If you want to learn about trend channel lines you can look up the work of Al Brooks or attend the monthly  Northern Virginia IBD meetups where Vas teaches this type of technical analysis. Vas presents a great lecture to my students every year. I am impressed by how the lines he draws anticipate turning points. I hope he agrees with where I drew this TCL. You can also follow his tweets: @TCLTrader

 

I guess human beings will not give up their chocolate. That is one conclusion I draw from Hershey’s (HSY) strong action this year. HSY had a GLB (green line break-out) to an ATH last December at 182.24. It closed last week at 226.05 (+22% since the GLB) and now has a weekly green bar signal. Last week it bounced its 10 week average and retook its rising 4 week average. An advancing stock has the pattern 4wk>10wk>30 wk, see my chart below. If I were to buy  HSY this Monday I would place an initial stop loss order just below last week’s low of 215.76. However, the odds may be against any purchase working out during this declining market, with a GMI = 0, see table. To learn more about my indicators and strategy you may view my webinars by going to my blog menu and selecting them. Also follow my tweets: @WishingWealth.

I hope many of my readers exited the market last November when I told you I did. No one knows when this decline will end. Based on 50+ years of trading I suggest this decline is still just beginning. Panic has not yet set in. Too many people are looking to buy and the Fed has taken away the punch bowl. If my indicators change, so will I.