Tuesday, December 15, 2009

Notables from Monday, December 14th

In running the numbers, a few things stand out at me this morning:
  1. The GGT Price Index is hitting an all-time high of $20.03 on average volume of 1.4M shares.  All major price EMAs are pointing upward.  These two things are short and intermediate-term bullish.
  2. The GGT Long-Cash Ratio (LCR) has hit a local high of 1.325, indicating that 2627 stocks in the database are LONG in recommendation and 1982 are CASH recommendation. All LCR EMAs are pointing upward.  These two things are short and intermediate-term bullish.
  3. After bouncing around back and forth, the the LCR Change Timer has moved to a LONG (+1) value with yesterday's action.  This is short-term bullish.
  4. GGT database strength is now at 0.79 and is indicating that we are approaching over-bought territory.  If you are a short-term trader, protecting gains would be prudent.
  5. The NASDAQ-100 jumped in strength from 0.525 to 0.733.  This is short-term bullish for tech stocks.
Converse to the LONG indicators above, we have some weakness:

  • The DJ30 strength FELL yesterday, from 0.68 to 0.64.  In other words, large caps stocks did not participate.
  • Brazil did not change in strength, remaining at 0.60.  It has had a great run, so a pause here is not a major cause of concern, but is noteworthy.
  • India continues to get beaten, falling from 0.297 to 0.226.  Stay away from India until the trend reverses.
  • China jumped from 0.494 to 0.709, although the FXI sold-off mid day and gave up it's intra-day gains.  I like China, but it's struggling.
  • The S&P400 is now at 0.95, up from 0.76.  Give particular attention to MYY (1x contra) and MZZ (2x contra), as these will benefit from a short-term reset in the mid-caps.
  • The Russell 2000 has moved to a value of 0.88, up from 0.68.  Give attention to the relative changes of RWM and TWM, which are the 1x and 2x contras of the R2K.
Clearly, small and mid caps are rotating back into the equation. 

IWC, the Russell MicroCap, has appeared on a series of early scans and is looking very good.  Continued weakness in large caps will cause this to rise -- watch it's acceleration relative to the small and mid-cap indexes (IWM, IWR).

Remember, you're responsible for your own investment decisions.