Tuesday, December 29, 2009

GGT Notables from Monday, December 28th, 2009

Summary:  From a short-term perspective, I'm placing hedge positions on contra ETFs if there is *any* show of strength in contras.  Many of my strength oscillators are showing overbought status.

GGT Price Index

The GGT Price index peaked on 12/24, even with the shortened trading day, at $21.02, the highest price attained since we started keeping track in September 2008 (16 months).  The 12/28 closing price was $20.98, barely a change to the downside (-0.2), but significant that we didn't push higher with more market participation (volume).  This slight drop has caused the 13/22/34/55d EMAs to slow in their velocity, but they are still moving upward (which is bullish).  The canary, the slope of the 65d EMA of price, continues upward at $0.035/day, which is long-term bullish.

From a GGT pricing perspective, there is nothing stating that the market is in trouble, low volume not withstanding.  I am staying the course.

GGT Volume Index

The GGT Volume index is at the lowest value and slope direction since early February 2009, and is coming in at 1.34 M shares, with a 19% (252K) standard deviation.  Volume Monday was 37% below average at 840K shares.  Possibly contrary to your expectations, the standard deviation has been broadening, meaning there are less high-volume stocks and more general-volume stocks, so the big boys are on holiday and the general database marches onward and upward.  Note that I am very, very wary of higher prices on lower and lower volume ... but since we bank prices and not volume it pays to follow the trend.  I'm very cautious of the trend though, and the week of January 4th will be important in terms of how we set the tone for January and beyond.

GGT Long-Cash Ratio (LCR)

The GGT LCR hit 1.82 on Monday, up from 1.521 on 12/24 and is now at it's highest level (and slope) since 9/10/09.  It certainly could go higher.  For now, it is indicating that 2814 stocks in the database have a long-call and 1546 stocks have a cash call.  All primary EMAs (13/21/34/55) are in an uptrend, and the long-term slope of the 65d EMA continues to march upward, as it has been doing so since 11/11/09.  Everything about the LCR is bullish.

GGT LCR Change Timer

The LCR Change Timer continues to indicate a +1 (Long) call, and has done so since the primary transition from Cash-Long to Long on 12/14/09.  Since this time the GGT index has increased just under +4.9%, and since September 2008 the timer/GGT index pair is up 84.7%.  There is nothing indicating that this timer will change with Tuesday's action.

GGT Long Strength Oscillator

The GGT Long-Strength oscillator has hit a high of 1.0, indicating that the database is overbought.  While it certainly can move higher from here in terms of raw strength, this strength is indicating that we need to seriously consider contra ETFs and/or consider locking in our profits.  I intend to do both.

Various Index Strengths and Trends

DJ30:  0.711, up from 0.544 and the 3d trend is upward
NDX100: 0.648, up from 0.524 and the 3d trend is upward
Brazil: 0.514, up from 0.368, and up from the low on 12/18.  Brazil seems to be recovering.
Russia:  0.333, unchanged.  Russia is struggling
India: 0.702, up from 0.488 and up from the low of 12/21.  India is recovering
China:  0.734, up from the low on 12/17.  China is showing strength
SP500: 0.816, up from 0.74 and has been marching upward steadily since 12/21
SP400: 0.959, up from 0.882, and is looking very overboughtConsider MYY and MZZ as a contra
SP600:  0.970, up from 0.96, and is looking very overbought.  Consider SBB and SDD as a contra
R2K: 0.920, up from 0.865, and is looking overbought.  Consider RWM and TWM as a contra

Remember, you are responsible for your own investment/trading decisions, not me.  Follow me at your peril!