Blog Post: Day 10 of $QQQ short term down-trend and GMI still Red; $NVO, maker of obesity drug, Wegovy, barrels ahead to close at ATH after recent GLB–60 Minutes story to propel it higher?

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On Sunday, 60 Minutes had a feature story about how obesity is being increasingly seen as a medical condition that can be treated by the new generation of drugs for diabetes that reduce weight considerably. These drug injections are very expensive and not covered by most medical insurance for treating obesity. Hollywood stars are most likely able to afford this treatment. However, on Sunday,  60 Minutes announced that Rhode Island will now cover the cost of such drugs for state employees to treat obesity.  NVO’s drug, Wegovy, should benefit from this new breakthrough in insurance coverage and may explain why the stock has been so strong. GLBs have often failed this year but if one bought the GLB of NVO on November 30, one would currently be up +8.5%. This chart specifies the day of the GLB (green line break-out). NVO has closed the year at an ATH (all-time high). LLY is also working on a similar drug and may benefit too.

The GMI is 1 (of 6) and still on a Red signal.

 

Blog Post: Day 1 of $QQQ short term down-trend; GMI=0 and turns Red; Best to hold cash and receive income form money market funds; I agree with this wise quote from Nicolas Darvas

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My attempts to nibble at a few things the past few weeks have not worked out. Break-outs have been failing. During past significant market declines I waited to ge back in until the key indexes climbed above their 30 week averages and the average curved up. There was plenty of time to profit once that happened. I leave it to the day traders and gamblers to try to catch brief bounces. I love this quote from the great Nicolas Darvas:

I think this says it all. I will, of course, alert my readers to when the storm clouds have dissipated. With the GMI at 0 (of 6) and Red,  I see no reason to attempt to go long equities now. Happy Holidays to all!!!!!

 


Blog Post: Day 20 of $QQQ short term up-trend; Markets are on a precipice but at oversold levels that often lead to a rise, stay tuned this critical week

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This week will be very volatile and tell me whether the October bottom will hold. Among US stocks on Friday, there were 86 yearly highs and 245 lows. Only 14 stocks reached an ATH (all-time-high). On the plus side, SPY and DIA are still above their 30 week averages. But QQQ is below its falling 30 week average (Stage 4)but above its 10 week average. A close this week below its 10 week average would signal to me a likely new leg down. Here is the weekly chart for QQQ. On the plus side, its 10 (blue dotted line) and 4 week (pink dotted line) averages are rising. But they were rising last August before the subsequent decline.

My prime signal to get heavily back into this market is for QQQ to rise above its 10 and 30 week averages and for the 10 week to climb back above the 30 week. Take a look at this 10:30 weekly chart and see what happened at the 2020 bottom and compare it to the current pattern. The gray solid line is the weekly close which os below the 30 week average. When the 10 week retakes the 30 week and the 30 week rises, the bull will be back.

On the other hand, with the daily 10.4  stochastic indicator (red line) now below 20 (18.63), QQQ is at an oversold level where rebounds often occur.

The GMI has weakened to 3 (of 6) but is still on a Green signal.