Thursday, July 29, 2010

Short-term timer transitions to LONG-CASH

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Forgive the abbreviated entry today.  Sorry, no graphics, as I'm doing this from my iPad.

The GGT Price index fell on Wednesday by -1.04% on slightly lower than average volume.  The price decline was a bit higher than normal, so color this a bit more bearish.

The LCR dropped from 1.929 to 1.719, hence the indicator is back in sync with price (see yesterday's blog).

The strength index fell a huge amount, dropping from 0.811 to 0.591.  This places it squarely in no-man's land, and figuring out where we go to from here is difficult if we use just this indicator.

Of greater importance is that the LCR Change Timer has transitioned to LONG-CASH.  If today is a down day according to the LCR (proxy at http://www.finviz.com/ using the ADV/DEC on the home page), we will see a transition to CASH today. 

Elder continues to indicate that we can enter stocks with strong metrics.  The 13d Force Index is positive.  The 2d Force Index is negative.  These are signalling entry into stocks.  Of immediate concern is that Wednesday showed three consecutive days of a downward-pointing slope in the 13d Force Index, and this is a rare event.  If today (Thursday) is down then Katie, bar the doors, as I think (if volume is strong) we will see the Elder 13d Force Index transition negative, basically telling us to close all of our long positions.  The slope has been growing in negative magnitude day-over-day, so having it reverse is absolutely essential to continuing our focus on long-sided positions.  Failure to reverse today will be huge for our intermediate-termed holdings.

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Trading Plan for Thursday

Unfortunately, my intermediate-term portfolio is now underwater by -0.3%.  I will continue to purchase Elder candidates (use my filters for HGSI to screen, shown in previous blogs), if they move higher in price and volume.  I closed my VLTR position for a significant loss, as it continued to slide yesterday.  I picked up CMCSA @ $19.71, so add that to the list if you are following along.

My UWM position is very underwater, down -5.75%.  I had set a TSL but fat-fingered the entry to be a Trailing Stop LIMIT, so it blew through my limit order and never exectued.  Now I have a significant loss and very vew days to recover from it.  It may be moot -- if today is a down day as measured at the end of the trading day I'll sell this for a loss and lick my wounds, elseif today is an up day I'll continue to hold, in accordance with the LCR Change Timer.

I sold my QLD position yesterday at a very slight gain (just enough to cover commissions and make about 0.1%).

If we are down today I will close my UWM position and enter TWM/QID positions before the close.

Tough market.

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Regards,

pgd