Wednesday, June 9, 2010

Price Rises, LCR Falls, Elder Force Index Changing?

.
Status: 
  • LCR Change Timer: The LCR Change Timer transitioned to CASH-LONG (0) from CASH (-1), but did so on a very narrow margin. 
  • GGT Price EMAs are bearish. All but the 65d EMA are below their faster values, e.g., 55d > 34d > 21d > 13d > 8d. Statement is true as of morning of 6/9/10.
  • GGT Price ($22.92) is trading BELOW the 8d EMA ($23.66), which is bearish since all of the EMAs are inverted.
  • GGT Price ROCs are negative, which is bearish.
  • Slope of 65d EMA of GGT Price is negative (bearish).
  • GGT Volume was +5% higher than the 50d MA, but this is within a normal distribution (neutral).
  • Elder's 13d Force Index on the GGT Price continues negative (bearish) @ (384K) but is nearing a transition to the positive side, which would be bullish.  Note that the 13 and 34d MAs are still very downward-pointing, which is bearish.  We need to watch this (see figure below).
  • GGT Long-Cash Ratio (LCR) fell from 0.139 to 0.136, which is short-term bearish.
  • GGT LCR EMAs are all inverted (13 < 21 < 34 < 55), which is longer-term bearish.
  • GGT LCR ROCs are all negative (bearish) and are pointing downward (bearish).
  • GGT Strength Index rose from 0.04 to 0.16, which could be indicative of a short-term bounce.
  • GGT Equity Curve, based on the LCR Change Timer, dropped -0.4% with Tuesday's action.

 ==================

 
Here is an interesting chart on the Elder 13d Force Index, applied to GGT stocks:
 
Note the solid black line -- heading upward, nearly ready to pierce the 0-line and move into positive territory.  You can see that when this is positive the GGT Price Index tends to move upward, which means we're making money. 
 
My recommendation is that you start applying Elder's 13d Force Index measurement to your favorite stocks to see where they fall.
 
====================
 
This next graph is of the BRIC stocks which I created using FinViz and ADR.com:
 

Note the black line in the 65d EMA Slope window, which is the 21d EMA of the slope of the 65d EMA on all the BRIC stock prices.  Thinkabout that and make sure you understand it, because it is an important indicator that does not get much attention.

We see that the black line is starting to trend upward -- this is usually an inflection point.  Note the scale -- it is below 0 so ALL the BRIC stocks are losing ground when measured on a 65-day lens, but more importantly, with it pointing up, we are bleeding less fast.  The green line in that same window is the 13d EMA of the same, and we see that it too is pointing upward.  I take that as another bullish sign for BRIC stocks.

Risks with BRICs are the normal ones: 
  • 50d MA < 200d MA (solid red line below solid blue line in price window),
  • the slope of the 200d MA is horizontal, not upward
  • aggregate prices well below 50d and 200d MAs, which is usually considered bearish
As an exercise left to the reader (grin), take a look at the constituent stocks in the BRIC countries.  First, start country-by-country (Brazil, Russia, India, China), and look for the same pattern above (21d line turning upward).  Then look for emerging stocks where you see this happening on a per-country basis.

===============

Setups for Wednesday.

I'm in Denver, so I cannot watch the markets while they are open.  If we have strength today it could be a good chance to add to contra positions.

===============

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

Regards,

pgd