Stock Market Technical Indicators & Analysis
I do not trust a new QQQ short term up-trend until it lasts 5 days. The GMI remains on a Sell signal. The daily 10.4 stochastics for the QQQ and SPY are very over-bought and beginning to turn down. I remain mainly in cash. Here is the daily chart of the SPY (S&P500 ETF). Will it hold the 30 day average (red line)?
While the longer term trend for the QQQ remains down with the GMI on a Sell signal, the short term trend has just turned up, after completing 33 days of a short term down-trend. The QQQ is rebounding from the January decline and it remains to be seen whether this rebound will fail and the down-trend resume. This weekly chart of the QQQ clearly shows the rebound is in its third week. I think the QQQ has severe resistance around the 105 level. Note the 30 week average (red line) is still declining.
The QQQ daily stochastic is overbought at 90, and the QQQ is approaching its upper daily 15.2 Bollinger Band, around 105.40. This rally may only have a few days or % more to go. And the SPY remains in an ominous BWR down-trend.
Time will tell if the bottom is in or if we go down again….
I presented a workshop for three hours yesterday to the DC metro AAII meeting, about 80 wonderful attendees. I taught them how I use modified GMMA charts to determine the general market’s and an individual stock’s major price trends. I then showed them that the QQQ and SPY were in BWR (longer term blue moving averages above shorter term red moving averages with a white space between them) down-trends. I did not show them my watchlist of 38 index ETFs from around the world. All but one, perhaps Ireland (where US companies are moving their corporate homes), are in fully developed BWR down-trends. Here are just a few:
Brazil:
India:
United Kingdom:
Emerging Markets:
Israel:
Ireland is the strongest of all, but a budding down-trend now:
I could have shown you the others, but you can trust me that 37 of 38 world market ETFs I looked at are in solid BWR down-trends. Are we scared yet? The last time I saw anything like this was in 2007 when all of the bank stocks were in BWR down-trends. How are the banks doing now?
Bank of America, BAC:
Citicorp, C:
Goldman Sachs, GS:
Wells Fargo, WFC:
Are the Dow Jones Transports turning around as some pundits have opined?
How about the Dow 30 index?
The GMI remains on a Sell signal and I am mainly in cash. Plenty of time to get back in later once the market has turned up. When will that occur and from what level? Nobody knows (but don’t hold your breath)….. For some insight, go to the movies and see The Big Short.
