Wednesday, June 16, 2010

S&P500 Closes above 1107; Now What?

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Let's start with the basics -- here is the GGT status dashboard for Tuesday, June 15th:



Obviously, a bonus day for the GGT database, with a 2.4% increase in average price.  Volume continues to lag, with the daily volume -17% under the 50d MA average level.  Again, this is problematic for a sustained bull -- we are not seeing large participation by institutions, which I consider worrisome.

This being said, the Long-Cash Ratio (LCR) jumped with a 64% change, which is very bullish.  This means that a large number of stocks (296) jumped into a "New Long" status whereas only a few (2) moved into a "New Cash" status, so the bulls were clearly in control.

The short-term LCR Change Timer is still on the long side, as to be expected.  Even if Wednesday is down this timer will not cause us to move our monies, so I intend to sit pat on my long index ETFs at least through Wednesday's action.

There has been no change to the Elder timer system -- the 2d Force Index is still positive, barring me from entry into new longs.  I am waiting for the 13d FI to remain positive but the 2d FI to pull back to a negative value, giving me a greater chance of success.  Note that the 13d EMA is still below the 34d EMA, so even though they are in an uptrend, they are inverted, which means we are NOT confirming the Elder signal.

The pricing EMAs, with the exception of the 8d/13d pair, are all inverted.  This is bearish.  I will not be committing a full set of longs until these are properly aligned (8d > 13d > 21d > 34d

The LCR EMAs are strangely configured.  The 8d/13d pair are properly positioned for a bull, and with Tuesday's action, the 34/55d pair are now properly positioned.  This latter pair has occurred because the depth of the pullback was not enough to cause these two to dive deeply.  Hence we now have a situation where we are simply waiting for the 13/21d and the 21d/34d pairs to get in the proper position and point their way up.  We'll see.  

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This is my modified Jeffrey's 2ac panel where I also plot the slope EMAs on the 65d EMA of price.  Note that
  1. all the slope EMAs, with the exception of the 2d (RED), are below 0.  This means that they are losing ground in terms of price.
  2. all of the slope EMAs are pointing upward, with the exception of the 34d slope EMA.  Note that the 21d slope EMA *just* moved upward, hence this is bullish for the database, but the 34d causes me to pause and be cautionary.
  3. As described above, the Elder 13d FI is positive (green) and the Elder 2d FI is positive (red).  This is NOT the time to enter positions -- wait for the 2d FI to move negative but with the 13d FI remaining positive.
  4. I like that the 200d MA of the database is moving upward, but this is tempered by the 50d MA is trending down.  I'd like to see both of these pointing upward for confidence in the emergence of this new bull.
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NFLX has signaled a possible entry for today if it clears yesterday's high of $129.19.  Here's the chart:































I like NFLX for several reasons:
  1. All the slope EMAs are positive and 
  2. All the slope EMAs are pointing upward
  3. Elder 13d FI is positive (green)
  4. Elder 2d FI is negative (green), indicating a possible entry signal
  5. The 50d is above the 200d
  6. The 50d has a positive slope
  7. The 50d is incredibly linear
  8. The 200d has a positive slope
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Remember, you are responsible for your trading decisions, not me.  Please do your own diligence.

Regards,

pgd