Wednesday, October 22, 2014

Indecision, Wednesday, October 22nd Close

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Overview:  The intermediate-termed timer has transitioned back a step and is now in a mixed mode, meaning that internal indicators are not aligned 100% to either side (CASH or LONG).  Critical period for this bull leg.

Timer Status:

Short-term timer:  LONG
Intermediate-term timer:  MIXED (transitioned from LONG, so a step backwards)
Long-term timer:  CASH
Percentage of stocks in the database that are rated LONG:  30.2%, up 2.6% from Tuesday (bullish)
Long-Cash Ratio:  0.433, up +14% from Tuesday's value of 0.380 (bullish)

Timer Table:


As I stated in the overview, the "Mixed" moniker on the intermediate-termed timer stems from internal signals not being in alignment to the long side (in this case).  How this will resolve itself is anybody's guess -- your crystal ball is as good as mine -- but given that we still are seeing strength in the Long-Cash Ratio (LCR) and that the number of stocks with a "LONG" rating is growing, I'm still leaning that this will turn positive.

Until it does, I'm not buying too aggressively.

Slope Table:


Obviously, there is slight weakness in the 2d and 3d slope of the slopes, shown on the right.  This is to be expected with today's actions.  The left side of the table is intact, which is good.  We did not lose ground in any appreciable sense today, which is bullish (for now).

Cumulative Tick Chart:


The top shows that on a day-over-day basis, we have more 52-week New Highs than new lows.  This is desired and necessary for me to buy stocks on the long side.

The middle plot shows that about mid-day, around 12:30, the selling algos kicked in and never really subsided.  This dropped the cumulative tick (white) throughout the day, which put a chink in the armor but that's about it.

The solid, thick red trace has a positive slope, with the instantaneous cumulative tick (white) above it, so overall, we're still quite bullish.  I'm on the long side.

Strategy

Buy orders.  Today represents an opportunity to get some stocks about 1% cheaper than yesterday, so I am resetting my GTC orders to 0.1% higher than today's high, fired with a BUY STOP, active after 9:45 a.m. ET.

My list of stocks is taken from the Greenfield Leaders and Greenfield Bargains list in the dropbox file that I share with many of you.  It's free (for now) for the asking.

I'm operating on a 75% equity target for available funds.  The move of the Intermediate-termed timer to MIXED will slow me down in my aggressiveness, so 50% is still my first target (I'm a bit over 30% invested) and when/if the timer gets back to LONG I'll move a bit faster in getting into positions.

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Standard disclaimers apply, of course.

Regards,

pgd

Tuesday, October 21, 2014

Intermediate-Term Timer Now Long, October 21 Close

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Overview:  With both the short-term and intermediate-term timers now long, equity positions will be raised to 75% of capital.

Timer Status:

Short-term Timer:  LONG
Intermediate-term Timer:  LONG
Long-term Timer:  CASH
Long-Cash Ratio:  Jumped +33% to 0.380 from 0.285, the 77th largest jump in over 1000+ up days
Percent stocks with a LONG rating in the database:  27.6% out of 3034 stocks, up 5.4% from Monday.

Timer Table:


Historically, the progression shown above has worked out well.  It is possible for a slight pullback given today's action, so maintaining the Intermediate-term Timer recommendation will be key for continued buying of stocks.

Slope Table:


More green.  If you are not aware of the significance, please refer to older entries.  The right side of the table looks great.

Cumulative Tick Chart:



Continued upward slopes on all measured time frames.  Steady buying in the morning and afternoon.


Same chart as above, only zoomed so that you can see that we do have a large number of stocks on the NYSE making new 52-week highs.  This is significant and is worthy of continuing on the long side of stocks.

Strategy:

Continued buying on the long side.  The list of Greenfield Leaders is as follows:


This list is growing fast from just a few days ago and I'm trying to get into as many of these stocks as my different portfolio specifications will allow.

Beaten down stocks that have good fundamentals are in my Greenfield Bargains list:


The "red" here simply shows that pricing criteria has been violated in some fashion, an as soon as price moves higher most of these stocks will graduate to the Leaders list.

The complete list, to save you from typing each symbol, can be found in the Dropbox shared "stock" file that is updated nightly.  If you are not a member please send a note to pduncan {a t] v t [dot] e d u (figure it out, without spaces, etc.) with "Dropbox" in the subject and you'll get added to the shared folder.

I'm a buyer, attempting to get to a 75% deployed status.  It's hard.  Even with the buying over the past week I'm only at 25%; finding stocks that meet my portfolio criteria has not been as easy as it seems.   Historically, it's taken me about a week to deploy monies once a new signal is received; the first few days of this signal were slow and most stocks did not flip to "GGT LONG" status, preventing entry.  Tonight saw a large number transition, so the game is on.

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Standard disclaimers apply.

Regards,

pgd


Monday, October 20, 2014

Continued Thawing, Monday, October 20th Close

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Overview: continued progress on the long side of the market, but not all indicators are in alignment.  Still acting on 50% equities, 50% cash signal.

Timer Status:

Short-term timer:  LONG
Intermediate-term timer:  MIXED (transitioned from CASH to MIXED)
Long-term timer:  CASH
Percentage stocks in database that are long:  22.2%, up 2.9% from Friday
Long-Cash Ratio:  0.285, up 0.037 from Friday's value, 3035 stocks in database

Timer Table:


The intermediate-termed timer has moved to "MIXED", which means that not all of its internal signals are in alignment.  This is a test period for the markets, and we've failed at this point in the past (hence why I built in more than one indicator).  We need this timer to transition to LONG in the next day or so in order to have confidence in the overall signals.

Slope Table:


The LCR finished the day at 0.285 and is up over the past 5 days.  The left side of the table shows that the 13d slope has transitioned positive, and you can see on the right side that the slope of the slopes are all still positive.

This is constructive.

Cumulative Tick Chart


This is a transitory chart.  We still are not seeing more 52-week New Highs than New Lows on the NYSE, which should give you pause.  You can see this in the top plot.

With respect to the middle plot, we saw an acceleration of buying in the afternoon today.  Again, constructive.

The bottom plot has positive slopes for all indicated time frames, and the "white is above red", so we're in buy mode.

Strategy

With the short-term timer LONG but the others still in MIXED/CASH, I am operating on a 50% cash position / 50% equity target.  My present holdings are:


I will continue to purchase from my Dividend Portfolio, Greenfield Bargains, Greenfield Leaders, and Steady-Eddies portfolios.

I buy strength.  The price must be 0.1% higher than yesterday's high, and this new level is entered as a BUY STOP, GTC, active after 9:45 a.m.  If the order does not trigger with the day's action (price never took out the level) then I adjust downward the next day's order as long as the stock is in some form of GGT "Long" status.  If you don't know what this means just ask.

Stocks are listed in my stock file, which can be found in my shared Dropbox folder.  Send me a note if you are not a member or if you do not know where to look for this information.

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Standard disclaimers apply.  Please, do your own diligence, and take ownership for your actions.  You are solely responsible for your trades and I have ZERO responsibility regarding what you do.  This blog is intended to show you what I am doing in the present market climate.

Regards,

pgd

Wednesday, October 15, 2014

Buy Signal Continuing, Wednesday, October 15th Close

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Overview: Yesterday's initial 50%-equity buy signal was not negated with today's action. Late day rally caused across-the-board gains.
Timer Status:
Short-term timer: LONG
Intermediate-term timer: CASH
Long-term timer: CASH
Long-Cash Ratio: Increased +8% to 0.204, 3034 stocks in the database.
Slope Table

Aside from the 2d slope of the slope (SOS) turning negative, we continued the less-negative movement of the long-cash ratio (LCR) exponential moving averages (EMAs). The 5d slope, shown on the left side of the table, actually improved despite the markets today.
Continued "green" on the right, and more "green" on the left are required to confirm the initial short-term entry signal. Vigilance is key here.
Cumulative Tick Chart, SP500, R2K, NAS

This is a slightly different presentation of the Cumulative Tick chart, and it shows the cumulative tick of the individual stocks that comprise the S&P500, the Russell 2000, and the NASDAQ-100.
Key here is that at about 1:27 pm ET the buying algos kicked in full-force, and you can see this very clearly in the middle plot in the S&P500 window to the left. The trajectory upward at a steady angle shows that the S&P500 stocks were steadily bought almost to the end of the day. Only in the last few minutes did we see some selling, and you can see it clearly in the S&P500 and NASDAQ charts on the left and right respectively.
While the number of 52-week New Lows dominates across the exchanges relative to the 52-week New Highs, this behavior of the individual cumulative tick on each exchange is constructive.
Cumulative Tick, NYSE
Despite the selloff in the major indexes, the NYSE simply kept the selling pressure at a constant level (more or less) until the aforementioned 1:27 pm ET. From then on a reversal was apparent, and buying started and continued throughout the afternoon.
We are a long way from being in "full long" territory but the behavior today was not nearly as bad as suggested by the prices of the indexes. I'm encouraged by what I see.
Strategy
I was a buyer today, but I have only about 8% of my assets in equities. I buy strength, and many individual stocks that I'm interested in FELL in price today, so no entry.
I've reset the entry for tomorrow to be 0.1% higher than today's high, GTC, BUY STOP valid after 9:45 a.m. ET. Obviously, these are still rated "LONG" and I'll most likely get a better entry. A few more stocks in my dividend portfolio signaled long, and new entries will be created.
The Greenfield Bargains portfolio is growing dramatically with candidates. These stocks have solid EPS and revenue fundamentals, but have been beaten down into the ground on this latest pullback:
Many of my candidate stocks are still indicating some form of "CASH" status and will not be entered. I simply do not have enough stocks to take me to 50% equity position, which is normal in this type of pullback. I expect this will change quickly over the next week as we get a new set of leaders to emerge.
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Standard disclaimers apply. You are responsible for your own investment decisions, and I am not. Please do your own diligence, and please take ownership for your actions.
Regards,
pgd

Tuesday, October 14, 2014

Early Buy Signal - Tuesday, October 14 Close

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Overview:  Effectively a repeat of the same signal last week.  Early, tentative.

Timer Status:

Short-term timer:  LONG
Intermediate-term timer:  CASH
Long-term timer:  CASH
Long-Cash Ratio:  Increased +19% to 0.189 (hit a low of 0.158 on 10/13)
Percentage Stocks with a "Long" Recommendation:  15.9%, up 2.2% from 13.7% on 10/13 (incredibly oversold).

Slope Table:


The right side of the table has a bit more green on all measured time frames, so the past two days are showing a significant slowing of the decline in the number of stocks that are moving from a LONG status to a CASH status.

The left side of the table shows that the 2d, 3d, and 5d moving averages are above zero.  This means that we're starting a trajectory upward, and is my initial buy signal.

This buy signal failed last week -- it may fail again, I don't know.  Your crystal ball is as good as mine.

Cumulative Tick:



The cumulative tick chart shows that we are early on multiple indicators.  The top series simply shows that we are still seeing far more 52-week lows than we are highs -- in fact, it ticked upward near the end of the day, which is bad.

The middle plot shows the behavior of algorithmic buying/selling.  We started to see some buying going on early, but as the day progressed, we eventually gave up the ground we gained.  Again, not a good sign.

The most telling thing here is the bottom plot.  Steady downward slope of the longest moving average (red), telling us that there is far more selling going on than buying.  This is not a good market to be buying stocks, period.

Strategy:

For those stocks that are GGT "New Long", "Aff. Long", or "Long", with a Calmar Ratio of greater than 3.0 and listed on the "Dashboard" tab (check the dropbox file), I'll place an order to enter 50% of a position size.  For my dividend portfolio this is a 2% position.  For my Greenfield Leaders and Greenfield Bargains portfolio it will be determined in the morning -- if you're interested send me a private message and I'll send you my allocations.

I'm suspect of this market, so I'll keep entering on the signals but I'm not going to be overly aggressive.  I am honing the watch list though, and the "Dashboard" tab of the dropbox stock file has the latest listings of what I consider value stocks.

I'm not losing any money in this market despite having some positions in my dividend portfolio.  Granted, I'm not making any money, so the system seems to be working.

Here's the latest equity curve:



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Standard disclaimers apply.  Please do your own diligence, and please take ownership for your actions.

Regards,

pgd


Monday, October 13, 2014

Blog Will Return 10/18/2014

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Updates will resume no later than 10/18, sooner if we get a status change.  Busy week for me this week and need to refocus on other priorities.

Regards,

pgd

Friday, October 10, 2014

Reversal -- Thursday, Oct 9 Close

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Overview:  Timing signal from yesterday to enter up to 50% equity reversed with today's action.  Back to cash.

Timer Status:

Short-term timer:  CASH
Intermediate-term timer:  CASH
Long-term timer:  CASH
Long-Cash Ratio:  FELL -12% to 0.215 


A reversal.  Back to cash.

Slope Table:


No extended commentary required.  A reversal.  2nd time this has occurred in the last month.

Cumulative Tick, by Index:


The number of 52-week New Lows completely dominated across the board, and this is not what we need.

Strong algorithmic selling across the board in all major indexes, all day (middle plots).

Overall trend, although attempting to bounce back during the day, was characterized by lower highs and lower lows.  Today was a selling market, which we all know.  No hidden nuttin' -- the exits were clearly visible.

Cumulative Tick


Almost the same commentary here, so not much to add.  Across the board, selling at the NYSE, and much of it was program selling.  Note the lower low on the (white) cumulative tick -- this isn't a favorable setup.

Strategy:

A signal reversal, when everything was previously in cash, means get back to cash.  Wrong time to enter.  I entered a number of positions today and I'm setting a 1% trailing stop loss, GTC, on all positions except those in my Dividend Payers portfolio (which is not timed using the macro signal).

Reversals happen, and the important thing is to be nimble.  I may get a signal to re-enter on Friday (for Monday's market), or Monday (for Tuesday's market), etc.  I simply do not know.  Positions with sell orders that do not execute when a new buy signal is generated will be "accepted", e.g., the sell orders will be cancelled.

Although we are quite oversold here, we could go lower.

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Standard disclaimers apply.

Regards,

pgd