Tuesday, December 1, 2009

Notables from Monday, November 30th

.
The GGT Price index rose Monday from $19.21 to $19.32 on volume that was -4% below average at 1.33M shares.  This volume value is in line with expectations for the Monday after Thanksgiving, although I would have liked to see more as well as a more definitive price movement -- we had a double hump in prices, one around 10:00, the other near the end of the day.

The major EMAs on the prices -- 13,22,34,55 -- are now in an uptrend, relative to Friday's action.  This is a local bullish sign, and indicates that we have some underlying strength in the movers in the database.

To answer my friend Ray's question, the long-cash ratio (LCR) moved up from 0.626 to 0.659.  Week-over-week this value is lower, but the local trend is now upward, so if today (Tuesday) is an up day the LCR Change Timer will transition from Long-Cash (0) to Long (+1).

The EMAs on the LCRs paint a different story.  ALL are in a down-trend, which is contra to the prices.  This divergence with prices cannot be sustained, and either 1) the LCRs must trend upward to match the increase in prices, or 2) the price EMAs will reverse and head south with their LCR brothers.  The important thing to realize is that the long side of the LCR equation requires volume, and until we see it across the database as a whole, LCR will continue its weakness. See my weekend post for more on the rationale behind this.

As I indicated above and in my weekend post, the LCR change timer is sitting at a value of Long-Cash (0), and if today is up (futures are up), I can expect that the timer will move long, which will keep us there at least until Thursday morning.

GGT strength moved from 0.38 to 0.46, indicating that the entire database appreciating in underlying strength.  On an individual basis all of the individual indexes that I follow were up on Monday, which is bullish.  Here are the underlying indexes and strengths:

DJ30:  moved from 0.3 to 0.566.  A position in DDM was established yesterday.  On an intermediate term the Dow is slowing, but on a longer-term basis the Dow is gaining price momentum.  I like the following stocks in the DOW on a long-term basis:

AXP (Affirmed Long)
T (Affirmed Long)
BA (Affirmed Long)
KO (Long)
DIS (Long)
XOM (Long)
JNJ (Long)
MCD (Long)
MRK (Long)
MSFT (Long)
PG (Long)
UTX (Affirmed Cash)
WMT (Affirmed Long)

NDX100: moved from 0.108 to 0.367.  A position in QLD was established yesterday.  On both an intermediate term and long-term basis the NASDAQ is losing price momentum, but is still very positive.

Brazil:  moved from 0.330 to 0.567.   On both an intermediate term and long-term basis the stocks in the Brazillian index are losing price momentum, but overall are still appreciating.

Russia: moved from 0.055 to 0.222.  On both an intermediate term and long-term basis the stocks in the Russian index are losing price momentum, but overall are still appreciating.

India:  moved from 0.98 to 0.493.  On an intermediate term basis the stocks in this index are losing price momentum, but on a longer-term, there is price acceleration.  Because of this Indian stocks look attractive. 

China:  moved from 0.234 to 0.497  On an intermediate term basis the stocks in the China index are losing price momentum, but on a longer-term, they are just starting to turn up.    I like these China stocks on both an intermediate and long-term basis:

WX
TSL
CTRP
YGE

S&P500:  moved from 0.108 to 0.479.  On both an intermediate term and long-term basis the stocks in the S&P500 index are losing price momentum, but overall are still appreciating.

S&P400:  moved from 0.00 to 0.399.   On both an intermediate term and long-term basis the stocks in the S&P400 index are losing price momentum, but overall are still appreciating.

S&P600:  moved from 0.00 to 0.435.  On both an intermediate term and long-term basis the stocks in the S&P600 index are losing price momentum, and on an intermediate-term basis, the database is losing price value, which is is a big warning flag.

Russell 2000 moved from 0.006 to 0.454.  The intermediate term basis is losing price momentum, but surprisingly to me, the long-term is looking stronger.  There could be some bargains here...

Take a look at:

NTRI
WSII
SNIC
INCY
EWBC


=============

Overall, there are some opportunities, but the markets are weak on an intermediate to long-term basis.  Do your diligence wisely.

Remember, you are responsible for your own investment decisions.  Leave a comment below if desired.

Regards,

pgd