General Market Index (GMI) table

Blog post: 46th day of $QQQ short term up-trend; GLB: $DXCM, $MITK, $PKI, $AAPL on the precipice; Government shut down in October?

@ 9:48 am
GMI6/6
GMI-25/9
T210838%

I see few media articles discussing a government shut down in October. Here is an exception. While a lifting of the debt limit may eventually be passed by Democrats  as part of a reconciliation bill, I would not rule out hysteria about it until then. This could add to market volatility the next few months along with  a resurgent pandemic. For all of these reasons and the “air pockets” in leading stocks last week I am getting very defensive in my trading accounts……

Still, some stocks are strong. For example, this weekly chart shows that DXCM broke out  with a GLB last week.

MITK had a beautiful GLB and cup and handle pattern.

And PKI followed through on its recent GLB.

But this daily chart shows AAPL sitting on its green line. If it closes back below it will be a significant omen for the market.

 

Meanwhile, the GMI remains Green and at 6 (of 6).

Blog post: The power of the GLB: $XPEL, $MSFT, $AAPL, $AMZN, $NET, $COST, $QQQ……..

@ 9:55 pm
GMI6/6
GMI-27/9
T210833%

Most people are afraid to buy stocks breaking out to an all-time high (ATH) but still say they want to jump on a rocket stock heading towards the moon! Go figure. Buying a GLB (green line break-out) can lead to huge gains. I draw a green line on a monthly chart at the ATH bar after it is not surpassed for at least 3 months. The concept is to buy a strong stock that has rested and then breaks out again. Not all GLBs work. I sell immediately if the stock closes back below the green line and buy it back if it retakes it. Here are some examples, all weekly charts. You may have heard of some of these and there are many more…….

The GMI is at 6 (of 6). All components are positive. Be careful with a Fed meeting this week and the possibility of a delay in raising the U.S. debt limit.

 

 

 

 

Blog post: 36th day of $QQQ short term up-trend and GMI=5 (of 6) and Green; I went to cash in my trading account last week; One reason, daily MACD histogram turned red, see chart

@ 7:19 pm
GMI5/6
GMI-24/9
T210829%

In the past, I exited mutual funds in my  university pension accounts only after the longer term trend had turned down. That has not happened yet. In my more tradable IRA accounts I exit the market more frequently when some weakness becomes apparent to me. I do not want to give back all of my recent gains. So when the major indexes appeared to me to be weakening, I sold my TQQQ and other stocks and went to the sidelines.

One indicator suggesting weakness is the 12/26/9 daily MACD histogram that turned red Friday, after days of declining. The chart below shows this relationship. The MACD histogram reflects the difference between the MACD line (blue) and the signal line (purple). When the MACD line crosses below the signal line the histogram turns negative, or red. Note what happened to QQQ when the histogram turned red in March and May. The MACD is a measure of momentum and as the histogram lines decline it indicates waning strength of the move. Similarly, when the lines are rising it indicates strength. During most of the recent QQQ short term up-trend since 5/24,  the histogram has been black, indicating that the MACD was above the signal line. But notice how it has been declining and turned red on Friday. The  histogram does not have to remain red for long, but it signals to me at least current short term weakness. By the way, the histogram for SPY also turned red on Friday. Check it out for yourself!