Friday, December 10, 2010

Short Term Timer = CASH, VTI Transitioned to CASH

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First, I'd like to thank Bob Wilson, Jeff Williams, and Dave Steckler for an enjoyable evening here in Ft. Worth.  Always enjoy talking about the markets....

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Summary
  • The Long-Cash Ratio (LCR) fell today.  This has caused the Short-Term LCR Change Timer to transition to CASH with the close of the markets today.  If you are holding short-term equities, you'd better lock in those gains.
  • The VTI timer, which is related to the Short-Term LCR Change Timer, also signaled a move to CASH.  If you are holding VTI lock your profits in now.
  • The GGT price index moved up +0.25% on 7% higher volume than the 50d MA.  This is bullish, but the LCR eroding away for two consecutive days says that we need to watch this.
  • Overall, the LCR subsystem is bullish.  The slopes of all the EMAs are pointing upward, which is healthy.  This is telling us that on time lengths greater than 5 days the database is expanding in terms of available numbers of stocks with a LONG status.
  • Like the LCR subsystem, the pricing subsystem is bullish.  The slopes of all the pricing EMAs are pointing upward, much like the LCR subsystem, and since we put prices in the bank, this is good.
  • %B for the database fell again for a third consecutive day, ending the day at 0.775.  Database strength ROSE a bit, thus adding another divergence to the equation.
  • The Elder Intermediate-Termed timer is still long -- entry of stocks on the long side is ok.
Overall, two divergences exist:  price moves up but the underlying database is getting smaller in terms of stocks with a LONG status, and %B decreases but GGT database strength increased.  It's difficult to reconcile these two sets of divergences, but I typically put more weight on the price/LCR system.  Climbing prices on a shrinking database cannot be sustained, so either we will see falling prices to match the shrinking LCR system, or we'll see the LCR system start expanding to match rising prices.

Time will tell.

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Top 25 Stocks and ETFs

So, I'm traveling this week.  I started traveling Tuesday, so somehow in my mind that was "Monday".  Today is Wednesday, right?  Wrong.  It's Thursday.  Well, on Wednesday night, I'm supposed to calculate the Top25 stocks and ETFs.  It didn't happen last night because in my mind it was Tuesday, not Wednesday.  This is the problem when you hold multiple jobs.

You might think that I should simply use yesterday's data and update the portfolios... but I can't do this.  I'm actually using a 3rd party to independently track the portfolio, and since I didn't make the trades today, I can't backdate.

Soooooooo, the Top 25 Stock and ETF portfolios will be calculated with today's data, and the actual transfer in accounts will be Friday morning.  Welcome to real-world trading.

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Top 25 Stocks

Here are the new top 25 stocks, from strongest to weakest, although these are the strongest out of 1846 LONG-rated stocks.  I note with interest that EVERY one of these is only rated LONG, not New Long, not Affirmed Long, but simply Long.  Telling?

CMG

PCLN
AZO
CEO
AAPL
BSFT
CME
NFLX
FFIV
CKH
MTD
DECK
RL
CSTR
MIDD
NOV
AMZN
SLB
LNN
DRQ
FCX
MEE
ETN
FOSL
OII

Stocks moving up in position since last week:

CMG
AZO
FFIV
DECK
CSTR
FOSL
OII

Stocks falling in position since last week:

PCLN
CEO
CME
NFLX
MTD
RL
MIDD
NOV
AMZN
SLB
DRQ
FCX
ETN

Stocks remaining at the same relative level:

CKH
MEE

Stocks newly appearing on the list: that were not in last week's top 100 list:

AAPL
BSFT
LNN

Stocks removed from the portfolio (sell these):

BIDU
LVS
NEU
TIF

Stocks being purchased for this week:

AAPL
BSFT
FOSL
LNN
OII

For the period ending December 9th, the Top 25 Stock portfolio is up 1.5% since inception on 10/28/10.  The Maximum Drawdown in this time is 4.77%.

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Top 25 ETFs

Here's the list of Top 25 ETFs, in decending order of strength:

AGQ

UPRO
TQQQ
OIH
SOXL
PALL
ERX
TNA
MDY
VDE
QLD
USD
RFG
IJK
BGU
MVV
IEZ
DIG
IWO
XLE
VBK
XME
TYH
UYM
IJT

Unchanged ETFs in terms of relative position on the list:

AGQ
MVV
VBK
IJT

ETFs that are new additions to the list:

UPRO
VDE
QLD

ETFs that have risen in strength:

SOXL
PALL
USD
RFG
IEZ
DIG
XLE
XME

ETFs that have fallen in strength:

TQQQ
OIH
ERX
TNA
MDY
IJK
BGU
IWO
TYH
UYM

I'll place orders to sell the following ETFs:

IWR
IYT
MWJ
SGG
SOXX

I'll place orders to buy the following ETFs, at full positions (since the Elder Force Index Timer is LONG):

QLD
UPRO
VDE
XME

For the period ending December 9th, the Top 25 ETF portfolio is up 4.0% since inception on 11/25/10. The Maximum Drawdown in this time is 0.01%.


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Trading Plan for Friday:

First, I need to make the phantom trades of the two portfolios as listed above.  This will be done prior to market open.

Next, I'm watching the following stocks for appreciation, and will enter if they show strength and appropriate intra-day volume:

EWX

BEAV
STEC
MCRS
SHO
TBF
TBT
TMV
TWX
SUSQ


These stocks need to appreciate before entry but appear that they are starting new up-trends:

MAA

CYD
DBA
CEO
BBL

These stocks need to pull back prior to entry, as they are overextended:

PTP

ADTN
UN
BLK
MTB
RF
STO
TCB
WTS
AAWW
AF
BOH
CCC
COF
CQB
HIG
IRE
KIE
MDT
ZION
ZMH

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Remember, you are responsible for your own investment decisions, and I am not.  Please do your diligence and take ownership for your actions.

Regards,

pgd