Thursday, July 15, 2010

Price/GGT LCR Divergence

.
Still traveling and am challenged to provide graphics.  I return late tonight so tomorrow should be back to normal.

=========

My primary short-term indicator, the Long-Cash Ratio (LCR) value, continues to move upward.  This is constructed using about 2600 stocks that have over 100K volume, prices above $1, and trade on the primary exchanges.  Correspondingly, these are liquid stocks.  The new LCR value is 0.922, indicating that we have 1249 stocks with some form of LONG status and 1355 with some form of CASH status.  Why this is important is that
  1. if we continue, we'll have more stocks on the long side than cash; this has not occurred since May 5th, and
  2. this continues to tell us that we should remain LONG if you are following the LCR Change Timer.
Correspondingly, I am continuing to hold my long positions in UWM and QLD, which are up 9.4% and 6.9% since the signal last week.

========

The Elder 13d Force Index continues to indicate a positive value, indicating that it ok for us to enter intermediate-term long positions.  I've been quite busy this week and have NOT been able to research which stocks to review, so I cannot provide guidance on what I'm going to do.  Check back tomorrow and across the weekend to see how I will look forward with stock selections.

=========

The GGT Price Index fell from $24.94 to $24.92, although the LCR moved upward.  Volume was within statistical norms.  Correspondingly, even though we now have a significant divergence, my money is on the LCR moving upward.  I am short-term bullish, and am becoming more longer-term bullish, but have to look deeper at the tea leaves.  I'll do that this weekend.

=========

Trading Plan for Thursday

I am staying the course in terms of my long ETFs and will make no changes today.

========

Regards,

pgd