Tuesday, March 23, 2010

What say GGT for Tuesday, March 23rd?

The GGT Price index rose to $24.87, up from Friday's value of $24.66.  Volume was slightly below average, with 2.041M shares indicated on an average of 2.047M shares.  All within statistical norms so don't read anything into this.  Higher prices on steady volume is bullish.

Monday was not particularly strong in pushing stocks from CASH to NEW LONG, or from LONG to AFFIRMED LONG.  We are on the lower fringes of average here, which indicates a tired bull.  In fact, our Bull-Strength indicator, which is the ratio of (New Longs + Affirmed Longs) / (New Cash + Affirmed Cash) has fallen to the lowest level (0.79) since 2/26.  This is borderline bearish.

There are presently 2312 stocks in some form of a LONG status, and 872 stocks in some form of a CASH status.  This provides a Long-Cash Ratio (LCR) value of 2.651, which is down from Friday's value of 2.735.  This is bearish.

The LCR Change Timer is indicating we should be in CASH.  The fast portion of this timer flipped to cash on 3/15 and the confirmation portion of this timer confirmed this move this past Friday.  You are playing with fire if you enter large long positions at this time.

Prices moved higher on Monday with below-average volume.  This is called a sucker's rally, and is not good.  I determined this by an increase in the non-volume price strength indicator, but a decrease in the price-volume strength indicator.  Again, extreme caution on the long-side is advised.

All the major indexes fell in raw GGT strength (I calculate the strength of the stocks in the index, then average each with equal weighting) even though they were up in value.  This is a bearish divergence.

As I've indicated in the past, we can remain here for some time.  Here's a now-familiar graph; read this entry if you want details on what the colors mean:

What's important to realize about this chart is that compared to past periods, we may already be starting the downward slide.  Certainly, other indicators are showing that this bull is tired.  In the graph above, pay particular attention to the oval'd area in March-June 2009 and compare to now (right side of graph) ... there is NOTHING suggesting that we couldn't remain here, bouncing around.


We are still in overbought territory, so caution is advised.

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