Thursday, January 28, 2010

Notables from Wednesday, January 27th

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Yahoo! is finally back to normal and I am caught up on GGT file updates.

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I'm traveling to Atlanta today so this will be brief.

The GGT Price index is walking back up, closing at $22.15.  It is up from Friday's low of $21.74, and has been meandering upward since then.  We are 4.8% above a lower channel line, and 1.3% below the upper channel line, so I do not think we're out of the woods yet.  Pricing EMAs continue to walk upward, which is bullish.

We have a divergence.  The LCR, our long-cash ratio, continues to drop on higher GGT prices.  This is bearish, and indicates either that 1) the LCR will reverse, or 2) prices will reverse.  Our high was 2.124 on 1/19 (2.4 on 1/14), and we've been decreasing ever since, with a closing value of 0.537.  We are oversold right now, so I am guestimating that prices will continue upward for a short period, causing a reversal in the LCR.

The LCR Change timer is still in CASH at a value of (-1), although if today is a strong day I could see it moving to Cash-Long with today's action.  You may want to consider protecting contra gains if we have a strong day, but I personally am not closing any contra positions today.

GGT strength overall is very oversold but is now advancing upward.  The value is 0.185 -- which means entry for leveraged bull ETFs could still possibly work.  We've been down here all week, so caution is advised.

Overall, our various strength indexes of the indices we track are walking up from very oversold levels:

DJ30: 0.33, up two days
NDX100: 0.226, up two days
Brazil: 0.104, up two days
Russia: 0.083, up one day
India: 0.050, up one day
China: 0.193, up one day
SP500: 0.278, up two days
SP400: 0.314, up two days
SP600:  0.347, up one day
R2K: 0.299, up one day

Note that the small caps were hit very hard in the last week and are rebounding fast.  Any values over 0.2 and continuing upward is bullish.... stalling in the 0.4-0.7 range is dangerous.

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Remember, you are responsible for your own investment decisions.

Regards,

pgd