Friday, April 9, 2010

LCR Change Timer (fast) has transitioned from LONG to LONG-CASH

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The GGT Price Index dropped $0.01 Thursday to $25.72 on above-average volume of 2.3M shares.  As I indicated yesterday --> churning, and when you do it after a nice bull run, it's a call to wake up.

Wake up.

The GGT LCR fell to 2.921 yesterday, the first down day since 3/31.  2264 stocks are indicating some form of "LONG" status and 775 have some form of "CASH" status.  The slope of the 65d EMA on the LCR is just barely above 0 at 0.003/day, further indicating that there may be trouble ahead.

The LCR Change Timer (fast) has signaled a transition to Long-Cash (0) from Long (+1).  If today is weak from the bull's perspective I would expect that this timer would move to the Cash side.  Note that the LCR Change Timer (fast) is up nearly 116% since September 2008, so it pays dividends to watch this indicator, although it does whipsaw and this will frustrate many of you.  The LCR Change Timer (slow), which is a confirmation timer on the fast one, is still indicating LONG.  It is up nearly 56% within the same time frame.

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A number of my positions are within pennies of hitting their trailing stop losses, so if today appears weak by around 10:30-11:00, I will cut the weakest stocks from my portfolio for virtually no gain and will leave the ones with solid gains (CQP, BYI, YCS, SOA) to run.  I do not intend to add any long positions today and have not performed any searches on the long side of the equation.  I am carefully watching for contras to emerge.

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

Regards,

pgd