Tuesday, March 16, 2010

Signal Change: GGT LCR Change Timer (fast) has moved to CASH

Independent of what the popular markets did yesterday, the GGT Price index fell -0.3% on above-average volume of 2.0M shares.  Correspondingly, the GGT Long-Cash Ratio Fast Timer, which signaled a transition from LONG (+1) to CASH-LONG (0) over this past weekend, also transitioned to CASH (-1) with Monday's close.  The LCR continued to drop on Monday and is now at 3.178, indicating that 2425 stocks have some form of a LONG recommendation and 763 stocks have a CASH recommendation.  This is off the peak established last Thursday of 3.625.

The GGT LCR Timer will post a confirmation signal with tonight's close IF the broad markets continue south with today's action.  Yesterday saw 2433 Advancing stocks and 3668 Declining stocks -- hardly a loud bear -- but it was enough to pull the GGT Price index AND the GGT LCR lower, causing the present warnings.  Watch here throughout the day, specifically the ADV/DEC values in the upper left corner, to get a view of what the broad market is doing.

Although I've posted a recommendation for GS, this is a risky trade at this point in the game.  Certainly enter on strength, and if GS continues to pull back, we'll monitor daily to determine whether we should enter or not.

Historically, watching the ADV/DEC level mid-day and closing longs (if transitioning from longs to cash) has been prudent.  Today will be different though because of the FOMC meeting and release of the statement around 2 pm.  I suggest waiting until after 2 pm EDT before making big decisions on anticipating what the GGT LCR Change Timer will do.


Remember, you are responsible for your own trading decisions, not me.  Please do your own diligence.