General Market Index (GMI) table

If you listen to the media hype, you would think we had experienced a huge decline thus far. However, if you look at longer term trends, the current decline is quite puny. First, let’s look at the short term. My read of this daily chart of the QQQ is that short term bounces have occurred when you got a crossing of the daily 10.4 fast stochastic (red) above the slower 10.4.4 stochastics (blue). This “green dot signal” is shown on the price chart by the green dots. On the lower stochastics indicator chart it is shown by the black arrows. (In my TC2000 club there is a video tutorial showing how to add the green dot signals to charts.) Most of these cross overs have occurred with the fast stochastics (red line) below 50. While anything is possible, I think the next bounce will most likely occur from a much lower level. When the daily 10.4 stochastic declines to  20 or less, it is now 54.5, a quick several day bounce is more likely.

Moreover, the weekly chart of the QQQ is quite ominous. The QQQ has closed below its critical 30 week average for 8 straight weeks and the 30 week average (red line) is now curving down. If this decline in the 30 week average persists, it represents the beginning of a Weinstein Stage IV decline. At the 2000 and 2008 tops I got out of the market when the 30 week average turned down and I got out before the carnage. We may be at the very beginning of a major decline.

Finally, this monthly chart shows that this decline is quite small, thus far. It hasn’t even touched the 30 month moving average (red line)as it did in 2015/16.

And the GMI=0, a very weak reading. This market is for gamblers.

Last Thursday my QQQ short term indicator turned up. So the QQQ short term up-trend count in the GMI table below is now U-2. Given this change and that the IBD says market is in a confirmed up-trend, it is time to look for the strongest stocks hitting all-time highs (ATH). After the 2008 market debacle, I discovered GMCR as it went quickly to an ATH. So here is a list of 11 stocks that hit an ATH last week and had recent quarterly earnings up 19% or more from the prior year: $EMCI $BEAT $CINF $HELE $SHEN $ATNI $AMED $LLY $HCA $CDXS $SUI. The way I trade such stocks is to put them in a watch-list to monitor for one of my buy set-ups. The only exception is if one had a recent green line break-out (GLB). In that case I might buy it right away but sell immediately if it closes back below the green line. This weekly chart shows that LLY recently retested a GLB after breaking through its ATH peak reached in 2000. LLY is already up 60% from its low this year.

LLY has a nice Guppy chart with a weekly RWB pattern.

And a daily RWB pattern.

The GMI remains on a Red signal and is at 2 out of 6.