Thursday, September 30, 2010

Short Term Timer = LONG, Intermediate Term Timer = LONG

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Continued greetings from the Dallas/Ft. Worth area.  I'm having dinner tonight with some folks who follow the Greek-God Trading space as well as High Growth Stock Investing, and am looking forward to a break from my day-time activities.

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I updated an entry in the Thrift-Savings Plan blog; if you have a Govern't-sponsored retirement account then you may want to review.  I urge you to add this blog to your automatic RSS feed or iGoogle blog reader, as it will ensure that you see the updates.  Note that you have until about 10:00 a.m. EDT this morning to reallocate your TSP funds and have it count in the month of September, not in October, and since we're restricted in what we can do in terms of the number of / types of transactions per month, you probably should make an effort to review the blog (if applicable).

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Here's the dashboard:



The GGT price index moved up just a nudge by +0.16% on average volume (relative to the 50d MA of volume).  I view this as normal behavior, neither bearish nor bullish.

The LCR moved up over 3.0 again, and now indicates that 2243 stocks are long and 730 stocks are in cash.  Historically, this is a relatively high number, and we have typically pulled back from this point.  This being said, we can easily continue higher, as there are 730 stocks to push this ratio higher.

The GGT strength index fell from 0.91 to 0.85, which is indicative of some stocks losing price, volume, or rate-of-change values that are above some optimized level (tailored to each stock).  0.85 is still very strong, and certainly, we could move downward from here.  Whether we are overbought or "normal" is subjective, but I view this level as overbought.

Overall, I'm feeling a bit toppy here, but there is no immediate catalyst to dump everything and protect profits.  I continue to remain invested on the long side.

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Short-Term LCR Change Timer

The timer is LONG, although the VTI timer (which is completely derived from the LCR Change Timer) is in CASH.  In fact, the VTI moved DOWN yesterday by -0.22%, hence the GGT price index and the VTI are out of sync.

I did purchase a position in the VTI yesterday, and as a result, this position is down -0.42% (commissions included).  Just goes to show that perhaps I should listen to my own timer on the VTI rather than listen to the GGT LCR Change Timer.   Note that the VTI has been fully tested with the GGT LCR Change Timer (results presented at our last meeting) and the Calmar Ratio (CR) with using the LCR Change Timer is 2.17 over a 2-year lookback period.  I do not consider my move into VTI as irresponsible or ignoring the past, but as I'm fond of saying, my crystal ball is as good as yours ...

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Elder Intermediate Timer

This timer continues to show LONG, as the Elder 13d Force Index is positive and the slopes of the 13d EMA and 34d EMA on price are upward-pointing. 

Furthermore, of the stocks that I'm now holding, the combined index chart looks incredibly strong.  Here's what I mean:



The chart above is constructed by taking all of my holdings and creating a new index within HGSI.  Not only can you then scan each equity and determine the health, you also get the ability to see how the portfolio health is overall.  I consider this very powerful.

With respect to my holdings, I like the above chart.  Of specific note is the strength and linearity of the 13d and 34d price EMAs, and note that the strength of the slopes of the 13d and 34d EMAs show that the portfolio is increasing in value at about $0.70 or more per day on a basis of $160.  Sure, not a knock-the-skin-off-the-ball situation, but sustained positive growth is a good thing.  We'll see if it continues.

My good friend Hsin Yen, who you may know from HGSI or Spike Trade, is independently validating my trades, so he has access to my Fidelity trade blotter and can see the positions I enter/exit, the number of shares, and can validate that this is all real. 

For the record, I added more positions yesterday.  Here are my holdings:



As you can see, some are above water, some are under water.  The net overall is about even, which is somewhat disappointing but if this market is in a present consolidation then I'm positioned to move upward.  Conversely, if the market tanks, I'm in a position to get hurt.  Gotta love investing.

There are a number of Elder candidates for Thursday:

AEZS
ARGN
HAS
JAS
JNPR
SAN
TLAB

IEF
TIP
LQD
BRF
BAB
DBV
BSV

Note that many of the ETFs are related to bonds, which could portend a market top.  Keep your eye on these.

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Trading Plan for Thursday

From a short-term perspective, I'm long in VTI and will remain so.

From an intermediate-term perspective, I'm long on the holdings list provided above and NONE of these holdings are showing individual weakness as determined by my Elder criteria.  I will continue to hold these independent of market action.

I will continue to add to my intermediate-term portfolio if prices move higher and volume is up (review my blogs the past week for my volume schedule).

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Remember, you are responsible for your own trading decisions, not me.  Please take ownership for your trading decisions.

Regards,

pgd