Friday, May 21, 2010

All Time Low in GGT Long Strength

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I'm presently tracking 2900 stocks that are

  • above $1
  • trade more than 65K shares 50d MA Volume
  • and are on the 3 primary exchanges
I feel that these stocks represent a good section of the market, as they are all liquid.

One aspect of the GGT system is that I can calculate the individual "strength" of a stock, which ranges from -5 to +5, -5 = weakest, +5 = strongest.  This strength is based upon internals, e.g., is the price above historical good-performing EMA values, is the volume increasing/decreasing, etc.  When I sum the individual strengths of each of the stocks, I get the composite strength of the database.

When the database has a strength of 0, we are the weakest we have ever been.  When the database has a strength of 1, we are the strongest we have ever been.

With Thursday's action, the database returned a raw value in excess of -10,480, which is the lowest strength ever recorded since we started this process in August 2008.  This value corresponds to a strength of 0.

We have NEVER had two consecutive days of 0-0, meaning that the database has always moved upward from the lows on the next day.  

Based upon this, I intend to move into long positions if they show any strength today.  Strength is moving above yesterday's high on higher-than-normal volume at that time of day; here's a rough schedule I use:


12% 21d MA Volume by 10:00
25% by 10:30
33% by 11:15
50% by 12:15
60% by 1:15
70% by 2:15
90% by 3:15


DO NOT ENTER if volume is weak -- it'll be the retail boyz and girlz sucking you (us) in if volume is weak.

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You are responsible for your own trading decisions. 

Regards,

pgd