Thursday, October 14, 2010

LCR All-Time High; ST Timer has transitioned LONG. Elder continues LONG.

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Quite a day on the markets.  Of note is that the LCR has hit an all-time high -- 4.721 -- and shows that 2403 stocks are some form of long and 509 are in some form of cash.  This is a lofty level and taking some profits here would not be a bad idea.

The GGT strength index has also hit an all-time high, and has been assigned a value of 1.0.  Where you're at the top there is only one way to go, so action the next few days will be interesting.

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Short-Term LCR Change Timer

Wednesday was obviously a good day.  http://www.finviz.com/ is reporting that 4669 stocks advanced and 1545 declined on much heavier volume.  The primary indexes were all up, so rising prices on increased volume can only be interpreted as bullish.

The LCR movement caused the short-term timer to move LONG.  This suggests that a position in the VTI, UWM, and/or QLD is prudent, accomplished early in the trading day, e.g, between 9:30 and 10:00 or in the pre-market if you're registered to do this.  UWM took the 1st place price on Wednesday, up 2.81%.  QLD was next at 1.55%.  Both of these are 2x leveraged ETFs.  The VTI was up 0.78%, and since this is a 1x ETF, it relates on the same performance as QLD.

I'm placing an order for UWM early in the morning on Thursday.

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Elder Intermediate-Term Timer

The timer is long, as you might expect.  The FI(13) is positive, and the values/trend on the 13d and 34d are positive and upward.

My list of Elder candidates is the following:

YMI
MNRO
CPL
NWY
MYN
WIW
AIV
C
VSH
CIK
KBE
XLNX
IAT
CHS
ATHR
AMD
MPWR
ERII
CBC

Obey price action requirements (above previous day high) and prorated volume requirements as a function of time and you'll have good entry positions.

My positions for this portfolio are doing ok with today's action.  Here are the totals:

EWH, +7.83%
EWO, +7.84%
BKF, +7.52%
FXI, +6.6%
GXC, 5.17%
PID, +4.71%
SATC, +3.23%
KOL, +2.03%
IAU, +1.86%
AES, +1.82%
XLB, +1.81%
XME, +1.54%
IGE, +1.06%
GMO, +1.02%
FDO, +0.33%
JASO, +0.29%

I'm worried about FDO and will most likely sell it on Thursday with a 1% TSL.  When stocks move upward on a strong day it basically leaves the weaker ones exposed for pruning, and FDO isn't worth holding at the present time when the others all moved up at least 1% (FDO lost -0.11%). 

I've got about 3.5% unrealized gains right now.

I sold CMS @ $18.4807 today, for a loss.  With the close the FI(13) EMA transitioned to CASH.  Here's the chart:



In the graphic above, note that the top red/green ribbon is now red.  That's the FI(13) EMA.  Also note that the MACD is rolling over, that the slope lines are dropping and converging, and tha tthe price is sitting on the 13d.  It may reverse off the 13d (simply look at the past), but the Elder signal will prevent me from entering.

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

Regards,

pgd