Wednesday, April 21, 2010

GGT LCR Timer has signaled a move to CASH

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With the close of the markets onTuesday, 4/20, GGT has signaled a move to CASH (-1).  I am traveling and was unable to run data for Monday until yesterday (Tuesday), and the setups for this move occured on Monday, with a confirmation on Tuesday (even though the markets were up). 

We get a move to cash when the underlying database moves downward in recommendations, e.g., when the individual strengths and prices of the underlying database (nearly 3000 stocks) move downward more than the stocks that appreciate.  This is what we are seeing, and it was sparked by Friday's sell-off on the Goldman news.  We are seeing this despite a 1-day bump in the GGT Price, which increased from $26.10 to $26.44.  This suggests that for the stocks that did appreciate significantly on Tuesday, they did so in a big way.

If the trend upward continues the GGT LCR Timer will reverse.  It has happened in the past, and will continue to happen going forward.  This being said, the equity curve from listenting to just the fast timer is up 116% since August 2008 (30 signals) and if we wait for the confirmation timer (slower), we're up 56% in the same time frame (24 signals).

I plan to sell those stocks in my portfolio which are not moving up when the market moves upward.  I'm looking at setting a sell point of 2ATR or the 10-day low, whichever is higher.

I do plan to enter ICOG above $1.37 today as a replacement turtle trade.  PWAV also looks interesting as another 55d turtle trade.

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