Monday, June 14, 2010

GGT LCR Change Timer (fast) Signals; Elder also Signals

I'm sorry for the delay in posting.  With travel back from Denver on Friday, combined with having my butt kicked in a half-Ironman triathlon this past weekend, time has been short.  I got home late last night (Sunday) and had no energy to review this content.

To start, here's the updated dashboard; as with all my charts, right-mouse click to view in another tab or to save to disk:

If you really take a close look at this chart you'll see that Wednesday's volume was 0% changed over the 50d MA of volume, Thursday's was -15% below the 50d, and Friday's was -25% below the 50d MA.  Rising prices on lower volume is not a good sign for a sustained bull.  When I look back in the history of GGT, new bull legs have never been characterized by falling volume -- so I think we need to be cautious.  If any of you are interested in the chart above back to the beginning of GGT time let me know and I'll send it to you.

The 4th column from the left is the Long-Cash Ratio (LCR), and you can see that it is still "red".  The color is artificial, in that it is red if it is below 1.0 and green if it is above.  It is important to note that we have had two consecutive days of increasing numbers of "LONG" rated stocks in the database, hence the LCR is climbing.  This is necessary for a bull to start so this could be considered bullish.

The 6th column from the left is the GGT Database Strength.  We've see it jump from 0.168 on Wednesday to 0.621 on Friday, and it indicates that we're starting to move into bullish territory.  Again, values above a less-than-scientific value of 0.7 are considered bullish.

As indicated by the heading of this entry, the LCR Change Timer (fast) has signaled a move to LONG, which is shown in columns 7 and 8.  I will close my contra positions that are based on this timer with a 1% Trailing Stop Loss (TSL), all of them for a loss.

Elder's 13d MA Force Index on the GGT price/volume series is clearly positive.  THE SLOPES OF THE 13d MA and 34d MA ARE UPWARD, which is bullish.  For the more aggressive, conclude here that Elder has signaled re-entry into long positions at this time.  I will close my contra positions that are based on this timer with a 1% TSL, all for a nice, healthy profit.  I will also purchase 2x leveraged ETFs today across the major indices if they continue to show strength (e.g., clear Friday's highs).  If you are more conservative, note that the 13d MA is < 34d MA (but both are in an uptrend).  This is a confirmation signal, and right now it is still bearish.

The last time the Pricing EMAs were inverted (55d > 34d > 21d > 13d) and this pattern reversed was the bull that started in March 2009.  Look at the chart above, specifically the group "Pricing EMAs" and the column labeled "34d > 55d Pricing EMA".  As you can see we are presently bearish in the 13/21, 21/34, and 34/55 EMAs, with ONLY the 8d>13d.  We are early, very early here folks, and risk is very high.  Here is a snapshot of the March 2009 period, as a reference:

As another point of reference, also note for March 2009 Bull:

  1. LCR did not move above 1.0 until 3/19/09
  2. Elder FI signaled "Bull" on 3/17/09, whipsawed, then re-signaled on 3/23/09.  We received confirmation of the bull on 3/26/09.
  3. Pricing EMAs did not start their proper bull alignment (8d>13d>21d>34d>55d) until 3/12/09.  The 13/21 pair aligned on 3/23.  The 21/34 pair aligned on 4/2.  It took until 4/27/09 before the 34/55 pair aligned.

Watch for a close of 1107 on the S&P500 -- this is the 200d MA, and we've tested and failed several times in the last couple of weeks.


Remember, you are responsible for your own investment decisions.