Friday, June 11, 2010

Elder 13d Force Index Signaled Positive

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Here's today's status chart:



Look across the bottom line in the chart, almost above this text -- the 13d Elder Force Index has moved positive.  THIS IS NOT A LONG RECOMMENDATION, but rather, is a necessary condition for us to move back into the long side of the market.  This being said, I want to highlight the negative side of this point in time, all through the GGT lens:
  1. The Long-Cash Ratio (LCR) is at 0.172, an incredibly low number, which is bearish.
  2. The LCR Change Timer is oscillating back and forth, and is still in a CASH status
  3. Although the 8d Price EMA has just signaled bullish (it is above the 13d EMA), all the remaining EMAs are inverted.
  4. All the LCR EMAs are inverted (8d < 13d < 21d < 34d < 55d).  The markets have been heading lower, and until we see continued increases in the LCR, this condition will remain.
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I'm returning from Denver today so I am not sure if I'll get a chance to play in the market.  While selling into a rally may be a loss of long positions at the "bottom", until we see sustained strength, holding substantial long positions at this point in time is very risky.  The markets have clearly been in a down draft, and until I see more green on the chart above, I still am favoring entering contra positions on large rally days.

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

Regards,

pgd