Thursday, March 4, 2010

Update on GGT Strengths, Hedge Positions in Contra ETFs should be Evaluated

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MZZ never cleared the previous day entry point yesterday, precluding entry.  Correspondingly, I have reset the entry levels for MZZ:

  • Enter above $19.87
  • 1st target ~ $20.50 or use above 5d MA
  • TSL @ ATR(20) = $0.64
Note that the GGT strengths for each of the indexes is very high, so hedge positions with our long positions would not be unwise.  The following are all strengths on a scale of 0-1, where 1 is completely overbought and 0 is completely oversold:

DJ30:  0.62, down -4% from Tuesday's value.  This value peaked at 0.67 on Monday, which is not appreciably strong.

NDX100:  0.73, down -13% from Tues' peak of 0.85.  QID may be attractive here.

SP400:  0.91, down 9% from Tues' peak of 1.0 (all time high).  MZZ is certainly attractive.

SP500:  0.80, down 9% from Tues' peak of 0.89.  SDS may be attractive here.

SP600:  0.80, down 11% from Tues' peak of 0.9. SDD may be attractive here.

Russell 2000:  0.78, down 9% from Tues' peak of 0.86.  TWM may be attractive here.

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The GGT LCR, which is the long-cash ratio value, is at 1.914 and has been climbing day-over-day since 2/24.  This gives us a long-call on stocks and says that we should be LONG in the present market.

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The GGT LCR change timer, which looks at a EMA of the day-to-day change in the LCR, continues to reflect a long call.  It is presently LONG and has been since it transitioned to this state on 2/10.  Since 2/10 the GGT index is up nearly 11%, so you decide whether you should more closely watch this indicator.  Since inception the GGT index is up 81% using this timer, both on the long side as well as contra side (theoretical, but you get the idea).

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

I return from Vegas late Friday so postings may be sporadic this week.

Regards,

pgd

The corresponding strength of the entire GGT da