Tuesday, July 13, 2010

Price/LCR Divergence

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This will be incredibly short, as I'm waiting to board an aircraft to Ft. Worth.

GGT Price FELL -0.45% Monday on below average volume of -27%.  Nevertheless, the Long-Cash Ratio increased +10% to 0.409, which is the first day of a divergence.

The LCR Change Timer remains LONG @ +1, and indicates that on a very short term basis, that I should be long in my ETFs.  I am, but only in UWM and QLD, which are both holding positive gains.

Elder's 13d Force Index is still below 0, indicating that on the intermediate-term horizon, we should NOT be in long positions.Correspondingly, I am only holding AAPL across ALL of my investments (I evaluate AAPL on a daily basis, not in view of the larger indicators).

Although the 13d and 34d pricing slopes of the GGT price index are pointing upward, they are inverted (34d > 13d), which is bullish for the upward-pointing aspect but bearish for being inverted.  In fact, ALL of the pricing slopes are pointing upward, which is bullish.

The slopes of the LCR EMAs are just starting to move upward, with the 5d,8d,13d and 21d pointing upward, all to be considered bullish.  The 34d is pointing downward, which is bearish.  The 55d remains pointing upward, which is bullish.

Conclusion:  we have the makings of a start of a good bull run, BUT WE ARE VERY EARLY.  WAY TOO EARLY TO COMMIT MONIES. 

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Trading Plan for Tuesday:

No changes.  Futures are up, so my positions in AAPL, QLD, and UWM will most likely move upward.  I intend to sit pat and watch these gain.

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

Regards,

pgd