Both SPY and QQQ gapped up today but both meandered all day pretty much below each’s respective open. That is not good behavior despite the gap gains.
And yet, as I said yesterday, the market will go up until it goes down. So QQQ and its leverage ETF TQQQ again registered another up day, the 10th in a row and SPY is overbought.
Any time now these two major ETFs, representing the NDX and and SPX, are going to have a sell-down (may have to say that again and again until I’m bluer in the face). However, I suspect tomorrow is that day.
There are signs. Less pronounced than before, but again…signs.
Short-term breadth gave a sell signal on the close. The buy signals on the individual stocks in my nifty-50 stock list rolled down from 29 to 26 on buys. The Fear and Greed Index is now in “extreme greed”, a contrarian indicator (although it sill has to turn down to give a sell). As I said, less pronounced.
Again, I need to state since long-term breadth is positive, there are no shorts here, just the possibility of a dip to take some profits, and then to look to buy back in hopefully at some lower level.
SWING TRADING SIGNALS:
PRICE: Positive. Long (Trade Day 9).
SHORT-TERM BREADTH: Negative. Flat (Day 2).
VOLATILITY: Positive, Long (Day 2).
LONG-TERM BREADTH: Positive (Day 7).
CNN MONEY’S FEAR AND GREED INDEX: (76, reaching extreme greed level).
NIFTY-50 STOCK LIST: 26 Buys, falling; 19 Overbought, 2 Oversold, 4 new buys today, 7 new sells.
The rally results so far (nine full days from the open of 7/10):
TQQQ up 13.8 percent.
XIV up 14.8 percent.
UPRO up 5.8 percent.
TNA up 6.5 percent.
The net gain is now 10.2 percent as marked by the Price buy signal on the open of 7/10).
(click on the chart for a larger view)