Friday, September 24, 2010

Short Term Timer Moves to CASH, Intermediate Elder Timer LONG

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I'm sorry for the tardiness of this posting.  Yahoo! has been giving Joe and I fits concerning updating of stocks and ETFs, and I just finally was able to update everything after the open of the market on Friday.

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As advised yesterday (Thursday), with the close of the markets we have a transition from LONG-CASH (0) to CASH (-1) on the short-term timer.  If your time horizon is on the order of days then trading securities LONG overnight is a risky business.

Here's the dashboard:




The GGT price index fell again on average volume, and considering where we've been with overall volume, we can count both Wednesday and Thursday as distribution days.  Correspondingly, the Long-Cash Ratio (LCR -- column 4) fell again, which has triggered the short-term timer to move to CASH.  The actual strength of the database (column 6) has fallen yet again to 0.5029, and indicates that we are weakening across the board.  On a short-term basis, many long-positions are weak and should be exited.

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Short Term LCR Change Timer

As indicated above, the short-term LCR Change Timer has transitioned to CASH.  As I write this stocks are up sharply.  If we end like this today the timer will transition back to CASH-LONG (0), and it will take Monday to be an up day before we can move back to a long call.  This timer does whipsaw, but overall, it does keep you on the right side of the wave.

The GGT equity index is at $1.602.  The VTI equity index is at $1.556, which has been adjusted downward because I was using the incorrect data field from Yahoo! in the calculation of prices.  Thank you Thomas for pointing out the discrepancy -- I like people who are following how I do what I do.

Of particular importance here is that the short-term timer and intermediate timer are out of sync.  Nevertheless, I intend to stay the course, and this could be a wonderful buying opportunity on the intermediate-term time line.

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Intermediate-Term Elder Timer

The Elder 13d Force Index is positive, which is a go for being long in stocks (column 12).  Note that we have the 3rd day of a downward-pointing Force Index (slope is negative), and although you cannot see the raw value of the Elder 13d FI, I can, and it's only 27K above 0.  This is on the border for transitioning to being negative.  While today is up in price, we need volume to be heavy to take this upward any significant level, and lack of volume today will portend increased possibility that the Elder 13d FI will move negative with any subsequent down days in the broad market.  We must watch this level carefully!

As I write this I am holding the following stocks under this timer, with their gains/losses as of 10:30 Friday morning:

VHC (+2.83%)
IGN (+1.16%)
EWH (+0.85%)
BKF (+0.49%)
IDCC (+0.12%)
IWD (-0.55%)
JJG (-0.98%)
INAP (-0.61%)

All percentages are inclusive of commisions.

No ETFs pass my Elder screen today -- I am requiring that the slopes of the 13d EMA and 34d EMA on prices be upward-pointing, with 13d slope > 34d slope > 0.  There are dozens where the slopes are downward-pointing yet 13d > 34d > 0, but these are showing loss of momentum.

Of all the stocks that I scan using my Elder filter, only MGLN and GOLD pass the same criteria that I applied to the ETFs.  As I write this, MGLN is up on extremely low volume, so it does not pass my volume tests, and GOLD is a go for entry.

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Trading Plan for Friday

With respect to the short-term timer, it is in cash and I will do nothing.

With respect to the intermediate-term timer, it is LONG and I will purchase an ATR-adjusted position in GOLD.

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

Regards,

pgd