Tuesday, June 29, 2010

Volume vaporizes, most indicators are red.

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Here's the dashboard:

























As with all my images, right-mouse click on them to open in another tab for easier viewing.

Monday's action saw GGT price fall -0.37% on volume that was -27% lower than the 50d MA of volume.  Yuck.  Unlike Friday, where we saw some big-boy participation, Monday's action was quite poor across the board.

The Long-Cash Ratio fell -7%, so as a whole, the database is sliding more bearish.  This is also evidenced by the Strength Index, which fell from 0.57 to 0.369, indicating fragile strength overall.

The LCR Change Timer remains at CASH-LONG (0), simply because it was in CASH on Thursday, saw an appreciation on Friday (moving it to CASH-LONG), and then a reversal downward on Monday (maintaining CASH-LONG). This is shown in yellow on the graph above.  If Tuesday is a down day ( use the ADV/DEC info at http://www.finviz.com ), expect that this will revert back to CASH (-1).  I typically do NOT re-enter when this oscillates at 0 then moves one direction or another, as I've not tested how viable that strategy is, but if you are aggressive, there probably is an opportunity to make a few % gains by looking at Contra ETFs if we have a solid down day by 3:30-ish.

Elder's 13d Force Index continues to indicate Long/Green, which is bullish.  Powered in part by the huge volume increase upward on Friday, by itself you would think it's okay to look at long positions.  We're too early:

  1. The slope of the 13d FI is downward.  This is bearish.
  2. The slope of the 13d EMA on price is downward.  This is bearish.
  3. The slope of the 34d EMA on price is downward.  This is bearish.
  4. The 13d and 34d EMAs are weaving about each other in a horizontal pattern, which is dangerous.
Here's HGSI's view of Elder:
































I simply can't advocate moving long with the slopes of the 13d / 34d EMAs being negative as well as virtually no winner in the Bull/Bear power graph.

Back to the GGT Status Graph:

The Pricing EMAs are all inverted, with the 8d < 13d < 21d < 34d.  This is upside-down for a bull leg and tells us that we'd be crazy to be in long positions right now.

The LCR EMAs are all inverted, nailing the coffin shut on longs.  The DATABASE EMAs are inverted, so we are clearly in a downtrend in the macro sense.  Perhaps not on a day-for-day evaluation (more horizontal than down), but over several days to weeks, gravity is working it's magic and is pulling everything down.

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Trading Plan for Tuesday

I'm happy to sit pat today.  I'm holding a small position in TWM and everything else is in cash.  I'm waiting for some form of over-sold indicator and move higher on Elder's signals, which I doubt will occur today.

Futures are down as I write this, so I expect a less-than-stellar performance day.  Case-Shiller 20-city index comes out at 9 a.m., and it is expected that we'll have better numbers there (expected is 3.4%).  If we miss, fuel to the downward fire.  If we hit/beat, then we'll probably continue to churn.  Consumer Confidence comes out at 10 a.m., and expectations are for a slight drop from 63.3 to 62.  Again, if it's worse than 62, look for a downward move.

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

Regards,

pgd