Friday, September 19, 2014

Friday, September 19th Update

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Timer Status:

Short-term timer: CASH
Intermediate-term timer:  CASH
Long-term timer: LONG
Long-Cash Ratio: 0.675, decreased -5% from previous day
% Longs in the Database: 40.3%, down 1.2% from yesterday

Slope Table:



(right click on the image to open in a new tab or window)

Slope Chart:


Cumulative Tick Chart:



(right click on the image to open in a new tab or window)


Commentary:

Any headway that we made Thursday was given back today.  All the slopes of the Long-Cash Ratio (LCR), which measures the bullish expansion of the stock database, are now again negative.  You can see that in the slopes table (on the left, all red) and in the slope chart, which looks back over the past two weeks.

The earliest we could see a buy signal would be Monday night.

With respect to the Cumulative TICK chart, the selling algos kicked in strongly around 11:33 and finally hit bottom around 1:20 as can be seen in my annoations above.  From that point forward the market essentially went on break, with much less buying/selling going on at the NYSE.

Key here is that we accelerated downward in the 10d EMA on the cumulative TICK, which is causing us to delay re-entry on the long side. 

There is no sense entering the market on either side at the present time -- risk is higher than the reward we could capture.

Strategy:

I'm still operating on a 50% sell signal.  A couple of big names triggered to the "CASH" side with today's action -- AAPL and ORCL -- and hence I'm going to unload those positions with a 1% trailing stop loss.  AAPL is comfortably above the waterline at +5% and ORCL is flat, so net/net will show these trades capturing money.

No buying Monday.

I'm traveling Sunday - Wednesday next week to Redwing, MN.  Writing will be later in the evening (most likely), and if you get the writings delivered to your email box you may realize that the cutoff for this is 10:30-ish PM.  It is doubtful that I'll be back in my hotel room with enough time to make this cut-off, so you'll have to manually check the blog if we are to get a timing signal change.

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As with all my postings, you are responsible for your own actions and I am not.  Please do your own diligence, and please take ownership for your actions.

Regards,


pgd

Thursday, September 18, 2014

Thursday, September 18 Update

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Timer Status:

Short-term timer: CASH
Intermediate-term timer:  MIXED
Long-term timer: LONG
Long-Cash Ratio: 0.711, increased +5% from previous day
% Longs in the Database: 41.5%, up 1.1%

Slope Table:

(right click on the image to open in a new tab or window)



Cumulative Tick


(right click on the image to open in a new tab or window)

Commentary:

I'm seeing more green on the right side of the slope of the slope table above, which means that we're getting closer to a LONG signal.  As you can see on the left side, the 2d has transitioned to green, so the 2d slope is now positive.  I need the 3d and the 5d to turn before the short-term timer will transition to LONG.

The intermediate-termed timer is MIXED, which means that internally, some things are not confirming each other.  We're right at a threshold, where the markets have equal probability of moving up or down.  Literally, we are at the 50/50 point.

The Cumulative TICK indicator shows that all the moving averages are converging to the 10d (red).  Any strength in the market will put the real-time TICK (white) above red, which will pull the remaining averages up with a positive slope.  Once they all have a positive slope entering the market has a good risk/reward.

Strategy:

Get your shopping lists ready.  Here's mine:

AAP
AGN
AMBA
AMRI
APT
ARII
BABY
BBD
BFR
BITA
CAAS
CBK
CMG
CORE
CP
CTP
DAL
DXCM
ENPH
ENV
EW
FB
FNHC
GIII
GILD
HBI
HEES
HOLI
HTLD
IDTI
KNX
LDL
LUV
MAR
MFRM
MNST
NEO
NFLX
NUVA
NVGS
NXPI
OTEX
OVTI
PJC
PL
PRSC
RCL
RFMD
SAVE
SHPG
SKX
STZ
SWKS
TUES
UAL
UEIC
URI
WGP
XCRA

I do not have a buy signal yet, but we're closer.  Most of these are GGT long-rated stocks and are worthy of consideration.  Breakouts are your friend.

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As with all my postings, you are responsible for your own actions and I am not.  Please do your own diligence, and please take ownership for your actions.

Regards,

pgd


Wednesday, September 17, 2014

Wednesday, Sept 17 Update

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Timer Status:

Short-term timer:  CASH
Intermediate-term timer:  CASH
Long-term timer:  LONG
Long-Cash Ratio:  fell another -4% to 0.677
% Long Recommended Stocks in database:  40.4%, 4th consecutive day of falling

Slope Table:

(right click on the image to open in a new tab or window)

Slope Chart:



Cumulative Tick:


(right click on the image to open in a new tab or window)


Commentary:

I was surprised that the LCR fell again today -- and this was also confirmed by the number of LONG-rated stocks in the database dropping to 40.4%.

The left side of the LCR table above is a sea of red, indicating a short-term bearish position on the market.  Below the LCR table I have presented the actual slopes over the past two weeks, and you can clearly see that while everything is below zero (red in the LCR table), we are close to transitioning to the long side if we could get a good up day.

Today was not that day.

The Cumulative TICK chart shows that there are a couple of positive things going on.  First, at the top of the chart in the upper right corner you can see that green is over red -- the number of New Highs on the NYSE was above the number of New Lows for the first time in over a week.  This is good and a necessary condition for the markets to move upward with any confidence.

Another good sign in the CT chart is that the 10-day EMA of the Cumulative TICK (solid red) is LESS negative in terms of slope.  I've drawn some straight lines that show the slope from yesterday and from Monday and you can clearly see that we are above them.  Hence, while we are still falling, and more stocks are being sold than are being bought, it's not as brutal as it has been.

You can also see that the instantaneous CT line (white) is more or less in a tight range since yesterday.  Neither good, nor bad, but with volume higher today, there was a bit of a war going on.  Note that the markets were flat until about 1:45 pm ET, then some buying started, then it fell off around 3 pm, never to return.  A false start.

Strategy:

I'm still operating on a 50% cash signal.  Most of my positions have unwound to this level, and if any portfolio is lower than 50% it's because the stocks or ETFs have fired a "New Cash" and I've sold them.

Thursday will be an easy day.  Just a few orders are left to sell (1% trailing stop loss set, GTC), and no buying is planned.

Surprisingly, my watch list is unchanged from yesterday.

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Standard disclaimers apply.  Read the left side of the blog for the verbiage.

Regards,

pgd


Tuesday, September 16, 2014

Tuesday, Sept 16 Update

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Timer Status:

Short-term timer: CASH
Intermediate-term timer: CASH
Long-term timer: LONG
Long-Cash Ratio: Fell -1% to 0.703

LCR Slope Table:


(right-click on the figure to open in a new tab or window)

Cumulative Tick Chart:


(right-click on the figure to open in a new tab or window)

Commentary:

The most important takeaway from the LCR chart above is that we are starting to see some "green" on the right side of the table.  We need green over there to see green on the left side -- the left side always lags the right side.

(For your science types, the left side is the first derivative, and the right side is the second derivative.  Science now is concluded for the day).

No "buy" signals yet -- they will not happen until the slopes of the 2d, 3d, and 5d EMAs turn positive.  We're close -- really close -- and another day like today may cause an initial buy signal.

On the other hand, there's nothing bullish about the Cumulative Tick chart.  Nothing.  At the top, red over green means that there are more stocks on the NYSE hitting new 52-week lows than are hitting 52-week highs.  In the middle, there was a buying spree mid-day, but the fact that it remained constant for the majority of the afternoon basically states that the buying faltered.  The bottom graph, which is the Cumulative TICK EMA chart, basically shows that the buying spree kicked in then after 2 pm started to falter (white).  The 10d EMA (red) still has a negative slope, so net-net, more stocks are being sold than are being bought, driving prices down.

Strategy:

Another easy day on Wednesday.  No buy orders, but the shopping list is honed.  Here's a partial excerpt:


(right-click on the figure to open in a new tab or window)

If you're interested in receiving real-time texting or email alerts when these stocks are higher than the previous day's high by 0.1% AND they are projected to take out the strongest down day volume relative to the past 10 down days, then send me an email at the following address:  p d u n c a n [a t} v t {d o t] e d u  (obviously without the spaces, figure out where the 'at' symbol goes, etc.) and include the following information:

Your full name:
Your cell phone number XXX-YYY-ZZZZ
Your cell phone carrier (AT&T, Verizon, Sprint, etc.)
Your email

I find that these alerts are interesting in the sense that you see who is moving in the market.  I'm running a test on these and they could prove useful.  I reserve the right to disable or change the alert structure at any time in the future ...

At any rate, no buying of stocks for me on Wednesday -- I'm waiting for an entry signal.  I'd really like the Cumulative TICK 10d EMA (red) to have a positive slope before I get back in.  

We'll see when this occurs.

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Standard disclaimers apply.  See earlier posts as well as the left side of this blog.

Regards,

pgd

Monday, September 15, 2014

Close of Monday, Sept 15 Update

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Timer Status:

Short-term timer: CASH
Intermediate-term timer: CASH
Long-term timer: LONG
Long-Cash Ratio:  0.711, fell another 17% from Friday's value
% Longs in Database:  41.6%, falling

Long-Cash Ratio Table:


(right click on the image to open in a new tab or window)

Cumulative Tick Chart:

(right click on the image to open in a new tab or window)

Commentary:

A continuation from Friday, but this time with more volume on the selling side.  You can't see it in the values above but I see it in some other tools I have and it was fairly significant.  Sometimes, not always, but sometimes volume increases on the downside due to "exhaustion" and this can often signal a turning point.  We'll see.

The LCR can keep going down from here -- and it can stay low too.  A value of 0.7 means that we are more bearish, and reversals (that last) typically do not occur until we get into the 0.3-0.4 region.  I'm not saying we have to go that low to get a market in which to invest -- I'm simply restating the past.  I invest in the market that is presented to me.

The Cumulative TICK indicator chart reveals more of the same from Friday -- everything is moving down.  Don't even thing of investing in anything until that white line is above the red line.

A head's up here:  although we're not yet triggering the "sell the next 25%" of the position, we're getting closer.  If we have a couple more down days like today we may get such a signal.

Strategy:

A large number of "New Cash" recommendations came in tonight on many of my holdings so I've set 1% TSLs, active from 9:45 a.m. onward, to launch tomorrow.  A few are above the waterline, but most are below by a percent or two, so there will be recorded losses.

I didn't even bother to cull my watch list tonight -- no sense in it, as it is impossible for a buy signal to appear before the close of Wednesday (two trading days from now).

While I'll have the workstation open on Tuesday, I doubt I'll pay much attention, as I have other work to tend to.

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Standard disclaimer and closing apply.

Regards,

pgd

Sunday, September 14, 2014

Weekend Update - Sept 14 2014

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Timer Status:

Short-term timer:  CASH
Intermediate-term timer: CASH
Long-term timer: LONG
Long-Cash Ratio:  fell -19% to 0.862.  The trend is lower.

Timer Table:


Long-Cash Ratio Table:


(right click on the image to open in a new tab or window)

Cumulative Tick Chart:


(right click on the image to open in a new tab or window)

Commentary:

Big picture -- no changes.  The short-term trend is lower.

Friday was a significantly hard down day in terms of the number of stocks that transitioned to "New Cash", so their price action and possibly volume signified a move to the sidelines.  The LCR fell -19% and is now below 1.0, which means more stocks in the database are in "CASH" than are "LONG".  The actual number is 46.3% and means less than half are in some form of LONG recommendation.  Note that we hit 62.5% on 9/2, so we've dropped a good bit since the high after Labor Day.

Lots of red on the LCR table, both on the slope side (left) and the slope of the slope side (right).  Again, we need the right side to be green before we can start buying on the long side.

The Cumulative TICK chart is quite bearish.  At the top on the right the number of New Lows surpassed the number of New Highs on Friday.  Not good.

Just below that is an indicator that I developed which shows what the buying/selling algorithms are doing at the NYSE -- and the downward line almost from the open sent the tone for the rest of the day.  A steady line downward means that stocks were, on net, being sold minute after minute after minute.  Only at the end of the day do you see that this line was horizontal, meaning, nothing was occurring that was out of the norm.

Just below the algo indicator is the Cumulative TICK and EMAs, and basically, the 10d EMA on the cumulative TICK (solid red) accelerated downward on Friday because the raw CumTICK (white) was so negative throughout the day.  Simply do not buy stocks until the white is above red.  Period.

Strategy:

I'm still operating within my 50% cash level at the present time.  I presently hold the following positions across all my portfolios; the ones with " * " have some sort of sell order in place:


(right click on the image to open in a new tab or window)

Last week saw gains and losses being locked in -- I mostly sold those positions that were underwater and took 50% off the table for those positions that were above the waterline.  My equity curve improved somewhat from the previous one (see earlier blog entries):


(right click on the image to open in a new tab or window)

My next signal to dump another 25% is very close to occurring; if Monday is a down day we'll probably see a transition Monday night, so stay tuned.  As far as an "all cash" signal, we're still a bit away from that happening, at least from today's perspective, so as long as next week is "orderly" I would not expect moving completely to cash.  Of course, your crystal ball is as good as mine.

So, with the LCR falling, with the cumulative TICK still dropping, and with more New Lows than New Highs, I'm not buying.  A few GGT stocks have moved into "New Long" territory, but I'm not buying when the rest of the ocean is flowing out of the channel, to mix metaphors.

Monday will be easy.  Orders are placed to unload the remaining positions to a 50% cash/equity holding (using a 1% Trailing Stop Loss - TSL - Good 'Til Canceled -GTC ).  Let the ones moving up continue to do so, but if they reverse, get out.  The ones that are falling, well, get out, obviously.

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As with all my ramblings, you are responsible for your own decisions and I am not.  Please do your own diligence, and please take ownership for your actions.

Make it a great week.

Regards,

pgd


Thursday, September 11, 2014

Close of 9/11 Markets

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Timer Status:

Short-term timer: CASH
Intermediate-term timer:  CASH
Long-term timer:  LONG
Long-Cash Ratio:  reversed the downward trend; up +1% to 1.062

LCR Slope Table:

(click on the image to open in a new tab or window)

Cumulative TICK Chart:


(click on the image to open in a new tab or window)

Comments:

For the first time in 6 trading days the slope of the LCR slopes, across all measured time frames, has turned positive.  This is shown in the top table on the right hand side -- all the values are positive and green.  This condition is necessary for the slopes to turn positive -- this is shown on the left side of the table.  We are early -- all the slopes are still negative, but the right side tells us that they are LESS negative than yesterday, so we are not falling as fast.

The analogy is that we're driving a car backwards in the driveway and are slowing as we get closer to the garage.  We are slowing in reverse relative to just a few moments ago, so the speed is "more positive" (less negative) than it was a few moments ago.

Think about it.

If this keeps up the left side of the table will turn green, and we'll get our buy signals.  We're not there yet.  Take Friday off and spend time with the family.

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The bottom TICK chart shows a couple of things.  First, the top panel is the New High / New Low (NHNL) for the NYSE.  We've had two consecutive days of a larger number of New Lows relative to New Highs.  Again, not a good sign if you want to be long in the markets.

The bottom cumulative TICK values show that we're still seeing more selling on the NYSE than buying.  The instantaneous value (white) was virtually sideways all day, within a tight range.  Volume was relatively normal (slightly light) so although 9/11 is certainly important, the traders were on the floor doing what they normally do.

When we see a tightly-ranged instantaneous TICK it's because there is a battle going on between the buyers and sellers.  Today they were evenly matched.

We need the white trace to move above the red trace, which is the 10d EMA of the cumulative TICK.  It may happen on Friday, or it may not.  You guessed it -- your crystal ball is as good as mine.

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Strategy:

I'm operating on a 50% sell signal.  A number of positions fired to cash today, locking in gains or preventing further losses.

I am not a buyer in this market, although I have my watch list established.

The short-term timer will (most likely) be the first timer to convert back to the LONG side, as it does not require the longer time frames of the intermediate timer.  We're closer but not there.

Like today, Friday will be EZ-PZ.  Sell orders are set, no buying planned, and the weekend is ahead of me.  Need to catch up on the documentation but that's what weekends are made for.

Next entry will be Sunday night.

Make it a great weekend.

Regards,

pgd