Friday, October 9, 2009

GGT Notables from Thursday, October 8th

We're within $0.03 of our all-time high (about 13 months lookback) with the GGT Price -- with the close on Thursday we're at $19.25. We got there on volume of 1.46M, which is just below our 50d average volume of 1.51M shares. By themselves, these two indicators are bullish. If we finish above $19.28 on normal to higher volume we have to take this as long-term bullish.

All of the pricing EMAs, through the 55d, are in an up-trend. This is bullish.

The Long-Cash Ratio (LCR) jumped from 1.024 to 1.369, indicating that 2874 stocks are long and 2099 stocks are in cash. The LCR trend lines above the 12d are still continuing downward, but the 5d and 8d have just reversed to the upside. There is no other way to interpret this other than short-term bullish, but with the downward trends on the longer EMAs, it still shows that we are intermediate-term bearish. In 13 months of data it has been shown impossible to sustain an up-trend when the LCR is pointing downward. One or the other has to get in sync, so the jury is still out on what is going to happen over the next few weeks.

The LCR change timer is still pointing upward, and we moved "cash positive" yesterday with the change on Monday/Tuesday. The lesson here is to follow this timer, not our hearts.

GGT long strength jumped from 0.65 to 0.79, which has now put us back into bullish territory. I also track something called GGT cash strength, and it normally "leads" the long strength in magnitude. Thursday's action is a deviation of that rule: long strength in the database beat cash strength, and when this has happened in the past, a reversal has occurred within a few days. We need to pay attention to this, as it could signal a great entry for contra ETFs.

In terms of GGT strength of the various indexes, here's were we are sitting:

DJ30: 0.81
NDX100: 0.755
Brazil: 0.863
Russia: 0.705
Indai: 0.647
China: 0.903

S&P500, S&P400, S&P600, and Russell 2000 are all sitting at a 1.000

Consider your contra positions indeed.