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

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IndicatorsGMI: 3/6GMI-2: 4/8T2108: 40%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 … [Read More...]

Still in cash; it’s “Sell in May” time

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IndicatorsGMI: 5/6GMI-2: 6/8T2108: 77%With very few stocks hitting new highs, my strategy of buying strength is not very profitable. I am torn between following my GMI indicators, which are on a Green signal, and my reasoning, which suggests that the market is misjudging the length and severity of the current economic decline. I prefer to remain on the sidelines.  In addition, SPY still appears to be in a Stage IV decline. See this weekly chart. If this rebound fails, it will get bloody. And it is Sell in May and go away, come back at Halloween time. [Read More...]

Day 2 of new $QQQ short term up-trend; Correction–24% of new QQQ short term up-trends last only 2-5 days, 61% last 6-47 days

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IndicatorsGMI: 2/6GMI-2: 4/8T2108: 14%In a prior post I gave the figure for the length of new down-trends but meant to give the figure for new up-trends. I trust a change in short term trend more once it reaches beyond 5 days. This is especially true for a change to a down-trend, where 39% end within 5 days. I became defensive on February 24 when that short term  up-trend extended beyond the high of 88 days from 2006-2019 shown in this table and the up-trend subsequently ended at a record 91 days. [Read More...]

Two indicators of an extremely oversold condition: Put/call ratio= 1.21 and T2108=9

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IndicatorsGMI: 1/6GMI-2: 2/8T2108: 9%I finished transferring all of my university pension accounts from mutual funds to money market funds. I know that the put/call ratio and T2108 are at levels where bottoms or bounces have typically occurred. But this time may be different with a pandemic on the horizon. I would rather take the chance of missing a 5-10% rise than experiencing a 20-40% decline. So I am safely in cash on the sidelines. My trading account holds a little UGLD and SQQQ and remains near record levels. The speed of this decline suggests to me that we may be in the early stages of a bear market. [Read More...]

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