My Favorite Posts

GMI at 3, $DIA and $SPY have closed below their critical 30 week averages; in cash and short and $GLD;

@ 9:17 am
GMI3/6
GMI-24/9
T210840%

I successfully avoided the 2000 and 2008 market debacles by getting out when the major indexes closed below their declining 30 week averages. Such a pattern could indicate the beginning of a Weinstein Stage IV decline.  The DIA and SPY have now closed below their declining 30 week averages.

Here is DIA in 2007-8 top.

And QQQ in 2000.

The QQQ is the strongest of the 3 index ETFs and is still above its rising 30 week average. If it closes back below its green line, it would be a sign of a failed GLB and major technical weakness.

I am too near retirement and therefore a chicken. So I pulled all of my money out of the market on Friday. It is nice to be on the sidelines. When my indicators look good again, I will re-enter the market. I am short in my trading account with a small position in the 3x inverse ETF, SDOW, and  GLD. Be careful. The worst of the decline may be yet to come.

 

 

$QQQ now has rising 4WK>10WK>30WK Averages –first time since February, signifying strong up-trend; Worden T2108 approaches 90%

@ 9:23 am
GMI5/6
GMI-27/9
T210887%

Weekly chart, 4wk=pink dotted line, 10 wk=purple dotted line, 30 wk=red solid line.

A note of caution, the Worden T2108 indicator from TC2000 is approaching 90%, indicating that almost all NYSE stocks are now above their 40 day simple moving average of price. While not a foolproof indicator of overbought and impending weakness, it bears watching. I post T2108 each day.

Note my mantra to back up the truck and buy a market index when T2108 is in single digits worked again. If only I had the courage to follow my own advice when that happens, which occurs when everything looks frightening. It takes real fear and an unexpected event to bring T2108 into single digits. T2108 stayed around 2% for 3 weeks in March, 2020. As the famous quote about his market success goes,  “I buy when the blood is running in the streets.”

 

13 Needles in a haystack; $TNK, $ZM, $CHWY, $QDEL, $TDOC, $CTXS, $LMNX, $NET + 5 more………

@ 7:55 pm
GMI0/6
GMI-23/9
T21084%

When the market is in a down-trend it is much easier to identify the few gems that are resisting the downward pull of the  general market, or even flourishing. Such stocks (like  GMCR in 2009) may become the new leaders when the market turns. Stocks in a nice short term up-trend have a daily Red White and Blue (RWB) pattern with the six shorter term averages (red lines) rising well above the longer term averages (blue lines) so there is white space between them.  I prefer to buy stocks in a daily RWB up-trend.

I created a set of column filters in TC2000 to find stocks in daily RWB up-trends that closed over $20 on Friday. In my IBD/MarketSmith watchlist of stocks that have been mentioned by these great services (plus a few others I identified), I found just 13 stocks out of more than 800 that met my criteria for being in an RWB up-trend. They are, in random order, TNK, ZM, CHWY, QDEL, TDOC, CTXS, LMNX, NET, SHEN, GSX, ZTO, SAFE, and EHTH (see table below).

These companies, of course,  need to be assessed for other technical and fundamental criteria before considering their purchase. I usually do not buy such needles in the haystack in a declining market–the odds are against my profiting. It is obvious to me, however, why some of these stocks are rising during this market decline. ZM, CTXS, TDOC, EHTH and GSX likely benefit from the multitudes now going online to communicate and purchase goods.

Also, I love CHWY, based on my own wonderful experience ordering food and toys for my newly inherited dog. CHWY has been said to  be the Amazon of pet supplies. And owners pamper their pets in hard times. I set an alert in TC2000 to tell me when CHWY makes a GLB, at $41.18,  but may buy a smidge now (just before earnings) in case it pops with earnings.

As Jesse Livermore and I, much later, have observed, a recent IPO that forms a peak (green line top), consolidates, and then closes at an all-time high on above average trading volume (GLB), can be a screaming buy as long as it keeps closing above its prior peak (green line). Here is CHWY’s daily RWB chart.

And its monthly chart showing its green line top.

ZM is another example of a GLB for a recent IPO.—Note ZM’s daily RWB pattern before its GLB at 107.34.

 

Only 27 of 4,000+ US stocks met my criteria for a daily RWB up-trend, including the 13 already mentioned above. Several of these others are biotechs: MRNA, BNTX, IOVA.  WDFC, not a biotech, has a nice chart pattern. Here are the 13, along with their projected next earnings release dates. CHWY reports this week. One day I will post the column filter formulas for a daily RWB in my TC2000 Club. Remember, buying strong stocks in a down-trend is especially risky and requires a strategy  to cut losses quickly.

 

The GMI remains at 0 (of 6) and on a Red signal.