Federal Reserve raising short term interest rates? Stocks ready to rally?


While the short term down-trend is still in place, a lot of stocks I watch are gaining strength. And surprisingly, short term rates are starting to rise, perhaps in anticipation of a recovery in the economy. First, note that the GMI-R, which is more sensitive to   short term changes, has risen from 1 to 5 (of 10), while the GMI is now back to 2. As the table below shows,

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More new lows than highs; T2108 and stochastic in oversold territory


For the first time since early November, there were more new lows than new highs in my universe of 4,000 stocks on Friday. Furthermore, the Worden T2108 indicator is getting near the level (below 20%) where declines sometimes end.   Friday was the 11th day of the current QQQQ short term down-trend.   We are either at the beginning of a major decline, or near the end of a short term correction.   The best course for me is to wait for the market to tip its hand.   The GMI remains at

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Short term down-trend deepens; QQQQ Guppy chart ominous; In cash


I started teaching two classes on technical analysis last week and will explain more of my concepts and include informational links, as many students will be new readers.   My General Market Index (GMI) keeps me trading with the general market’s trend.   The GMI is a count of 6 short and long term indicators.     Because I like to trade growth stocks, the GMI focuses largely on the NASDAQ 100 stocks, as measured by the ETF, QQQQ.   The Successful New High Index measures whether stocks that hit a new high 10 days ago have risen since that time.   Since I trade stocks at or near new highs, I also like there to be at least 100 new highs in my stock universe of roughly 4,000 actively traded stocks above $5. My daily QQQQ and SPY indicators measure these indexes’ short term trends. The weekly QQQQ indicator is my measure of the longer term trend.   Weekly charts provide me with a more interpretable and reliable picture of the market’s trend.   Finally, my IBD Mutual Fund Index indicator tells me how well growth funds tracked by IBD are doing.   If   funds that invest in growth stocks   are doing well, I am also more likely to make money trading growth stocks. I subsequently added four more   indicators to   the GMI in the form of the GMI-R (revised). The added indicators count whether there are more   daily new highs than lows, and how the QQQQ has performed in relation to three moving averages.   I become very defensive in my trading portfolio when the GMI is less than 4 and consider going to cash.   When the GMI goes to zero, I also start going to cash in my more conservative university pension account, which allows me to trade its contents only a few times each year.   So, with the GMI currently at 1,

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