Wednesday, June 23, 2010

A Sea of Red; LCR Change Timer is CASH, Elder is CASH

Google is having significant problems, so I'm attempting to upload this via email.  We'll see if it works. 

Here's the daily status dashboard: 

GGT Price fell -1.90% on Tuesday on below-average volume, the latter being the case since 6/9.  Of greater importantance is the marked reversal of the Long-Cash Ratio (LCR) -- it has fallen 26% to 0.665, well below the 0.932 peak of last Friday.  GGT strength has also dropped significantly to 0.349, and values below 0.2-ish would be considered oversold and a reason for looking at longs, provided that Elder returns to a bullish stance.

Note:  The LCR Change Timer has moved to CASH, as we expected with a down day (see yesterday's blog at once Google gets their act together).

Note:  ELDER FORCE INDEX has moved to CASH.  This is a reversal to the cash side which is fairly uncommon, and it shows that there is a lack of strength on either side (bulls or bears).  Specifically, the 13d MA of the Force Index is now negative, giving us the red "Cash" indicator.  The slope of the 13d FI is also pointing downward, which is bearish.  In this particular case we don't care what the 2d FI is doing -- it is trumped by the 13d FI; same with the remaining slopes and other indicators.  All week I've been saying that without the 13d MA > 34d MA that this rally was at risk, and here we are.  I hope you were listening.

The 13d MA on price ($24.37) has now exceeded the 8d EMA on price ($24.36), which is bearish.  This is going the wrong way for a bull.

The slopes of the pricing EMAs (8, 13, 21, 34, 55) have all turned down.  This is bearish.
Not shown:  Price has fallen below the value of two weeks ago, which is bearish.


Trading plan for Wednesday

I placed 1% Trailing Stop Losses on all my long ETFs that are tied to the LCR Change Timer, and I expect that they will trigger today.

I placed orders which filled in the last 15 minutes of yesterday's trading on TWM, QID, DXD, SDS, and MZZ.  If we have a strong day today I may add another 25% position to these, to lower my basis.


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