Thursday, December 30, 2010

December 30 Changes to Top 25 STOCK Portfolio

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New Buys (Order does not imply strength):

ATML
FRG
FTK
KOG
LDSH
MEE
ROSE
URZ
VVTV
WNR
XOMA
DDS
DNN

New Sells

AREX
BSFT
CVI
DECK
IMAX
IO
NXPI
RVBD
SFI
ST
VRUS
LNG
NCT

Holds from last week:

ALR

AMRN
EXK
FCS
HL
JAZZ
NG
PAL
TGA
UEC
VSH
WTI

==================
 
This system is up 6.1% since inception on 10/28.
 
This portfolio is being forward-tested in real time.  Follow the trades at your own peril.
 
Regards,
 
pgd
 

December 30 Changes to Top 25 ETF Portfolio

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Short entry since I'm sitting on a volcanic cliff in Hilo ....   :)

New Sells:

DBS
MWJ
NLR
PXJ
SOXX

New Buys:

KOL
QLD
TQQQ
VDE
XLE

Holds from Last Week:

AGQ
BGU
DIG
ERX
GDXJ
IEZ
MVV
OIH
PALL
SIVR
SLV
TBT
TMV
TNA
TYH
UPRO
UWM
UYM
XME
XOP

The portfolio is up 7.6% since inception on 11/26.

This is a test portfolio that is being forward tested in real time.  Follow at your own peril, as past performance is no guarantee of future results.

Regards,

pgd

Sunday, December 26, 2010

Top 25 ETF Update

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Merry Christmas and Happy Holidays to all!

Again, a concise entry:

BUY:

GDXJ

TMV
UPRO
XME
XOP

SELL:

KOL (previously sold, simply confirming)
SMH
TQQQ
USD
UYM

New positions should be at 4% per.

This portfolio is up a total of 6.3% since inception on 11/25/10 (morning of 11/26 actually).  The price peaked at 6.6% on 12/21.  The sells will execute immediately and the buys will be entered sometime mid-day, as my availability allows (I can stage the sells, but there is not enough cash for the buys.  Hence, I cannot execute simultaneously nor ensure the best prices.)

This is a volatile portfolio that is being forward-tested in real time, so follow at your own peril.

I return to NoVA on January 2nd; I will attempt to post another update of the stocks and ETFs on Thursday, 12/30.  The 5 hour time difference makes this harder than you would think.

I know a few of you are interested in the ORDER of the top 25 ETFs; the value listed after the symbol is the gain (loss) to date:

AGQ +16.36%


ERX +14.78%

TNA  +19.21%

DIG +9.38%

DBS +1.4%

PALL +0.88%

SLV +1.2%

MWJ +6.65%

SIVR +1.43%

TMV

UWM +3.59%

IEZ +7.64%

UYM +18.87%

MVV +11.7%

PXJ +3.56%

XES +1.59%

OIH +3.00%

NLR (-2.47%)

BGU +12.14%

TYH +8.86%

XME +4.43%

XOP

GDXJ

SOXX +1.17%

UPRO


The strongest performing are at the top and are sorted descending.

==================

Regards,

pgd

Friday, December 24, 2010

Top 25 Stock Portfolio Update

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A shortened entry since we're all on vacation.

Here are the changes for the Top 25 Stock portfolio:

Sell


ACPW
ENMD
FTK
FXEN
IGOI
MWW
SGY
SIMG
URZ
VVTV
XIDE

Buy

ALR
AMRN
CVI
DECK
EXK
HL
IO
NXPI
PAL
RVBD
SFI

The portfolio is up 4.5% since 10/28.

Regards,

pgd

Tuesday, December 21, 2010

On vacation until January 2nd

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The blog will resume the weekend of January 1st.

Happy holidays and let's make this a prosperous 2011!

Regards,

pgd

Friday, December 17, 2010

Divergences galore, I'm moving to the sidelines and watch you make money ...

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Meeting Reminder:


There is a monthly meeting this coming Saturday, December 18th, from 1 p.m. to 3 p.m. at the Great Falls Library, 9830 Georgetown Pike, Great Falls, VA 22066. The GGT, LLC investment club will meet immediately following the advertised meeting. WebEx information has been provided in the GGT and GGT, LLC Yahoo! groups.


Admin Note:


I like to be accessible to you folks, and I certainly don't mind you calling or sending emails.  My preference though is for you to use the GGT, LLC forum or the GGT forum to post your questions -- I know others have the same questions so posting and answering there generally will get a good dialog going (and it really helps me out when others answer!!!).  So, if it's not a private topic, please use the Yahoo! groups for your questions.  Thanks in advance!

===================


Summary


  • There are NO "New Longs" in the ETF scan tonight.  I don't think that this has ever occurred in 2.5 years of daily runs.
  • With respect to "New Longs" for the stock scan, we have a concentration in Drug (Biomedical/Genetics, 6 total), Utilities (6 total), and then groups of 3 or less.  I'll post the list below, but this is the 2nd day that Drugs and Healthcare are breaking out.
  • The LCR FELL today, despite the major indexes all moving up, and despite the GGT price index moving up 0.7% on normal volume.  This is a serious divergence; more on this below.
  • The LCR system continues to deteriorate.  We now have 2 consecutive days of the slopes of the LCR EMAs pointing downward, which means that the database is contracting in the number of stocks that are above their "optimized" levels.
  • The LCR system "slope of the slopes" is more-or-less pointing downward for 4 consecutive days. These indicators lead the LCR EMA slopes, so when we get 4+ days of downward movement here, we are guaranteed to reduce our chances that we'll pick good stocks because the slopes of the LCR EMAs will move down, reducing the pool that we can choose from.
  • In direct conflict with the LCR system, the Pricing system is still healthy, with all of the slopes of the pricing EMAs still pointing upward.  In fact, the pricing "slope of the slopes" is pointing upward, thus reversing the three-day downturn that we've been experiencing.
  • The GGT strength index moved upward today, which is in direct contradiction to the shrinking LCR but also in direct support of the increase in prices.  
  • The Short-Term LCR Change Timer is in CASH.  Because the LCR fell today, the earliest that this could move long is Monday.
  • Elder's Intermediate-Termed Force Index timer is long and suggests that we should be purchasing stocks on the long side.  The FI(13) has fallen 7 of the last 9 days though, and the EMA method of calculating this status is close to moving underwater.  Contrasting, the SMA method of calculating this status is solidly positive, which is bullish.  

Wow.  Talk about conflicting indicators.  When the GGT database is shrinking (as measured by a falling LCR) I have learned that it is better to sit on the sidelines, hence I've only 6 positions in the market.  Increasing prices and strength but falling LCR values, in conjunction with the Elder Force Index dropping 7 of the last 9 days, gives me pause at entering new positions at this time.  Rising ADV/DEC lines across all major exchanges but a falling LCR is a serious divergence and one that cannot be ignored.  

I like trends, and I like indicators to line up.  We have neither, so I'm happy to sit on the sidelines for now, protecting the equities that I'm presently holding (EFA, SPY, VXF, HD, IRM, and PFE).

=================

The LCR System

Here's the dashboard view of the LCR system.  Sorry that I haven't posted these daily -- lots going on and doing the graphics takes time.  Thanks for the notes though -- at least I know someone's reading  :)   

As with all my images, right-click to open in a new browser or tab:

































The left column shows the raw Long-Cash Ratio (LCR) value.  RIght now it has been falling 5 of the last 7 days, so we certainly have been shrinking the database.  If it is not clear why the database gets smaller when this number is dropping please post a note here and I'd be happy to answer.

The middle of the graph is where the meat is.  Specifically, this is the area that shows the slope of the LCR EMAs, from the 5d to the 65d.  As you can see, we have had 2 days where the slope is pointing down.  While this isn't any reason for panic, it does point that this bull leg has had a hard time getting going, and if this red continues, it will have a hard time staying in motion.

The right side of the graph is the "slope of the slopes" of the LCR EMAs.  When these are pointing up, this area is green.  When they are pointing down, this area is red.  The slope of the slopes drives the behavior of the slopes of the EMAs -- this is why you see red on the right before you see red in the middle.  Make sure you understand this -- it is critical to knowing if the market is losing steam on the long side.

Right now, we're losing steam on the long side.

Another graph I watch is the following:






























This is a graph that is related to the previous one, in that here I'm only displaying 3 LCRs -- 13d, 21d, and 34d. This graph is a rate of change graph -- it simply looks at the slope of the slope (SoS) on a day-over-day basis.  When the SoS is positive the EMAs will be in the upper half (white) area of the figure, and when the SoS is negative the EMAs will be in the lower half (pink) area.  Pointing upward in the white area is bullish, and pointing downward in the pink area is bearish.

Superimposed on the graph is the GGT price index, which shows you the price movements in relation to the ROC values.  You see that there is good correlation between readings in the pink area and falling prices, and the converse is true too.

If you look closely, we've had two days of closing just below the zero line -- we're in the pink area.  We're not falling fast, so no panic is warranted, but this is a slow bleeding that will rob us of our money if we buy stocks right now.  Sure, there are stocks going up -- in fact, the ADV/DEC ratio was 2:1 in favor of rising prices today, but you don't see that bullishness on the graph above, which is problematic.

What I want to see is a reversal of this graph and those dots to move back into the white portion of the figure. Until they do, caution is advised.

==========================

GGT New Longs for Friday, December 17th

I've received three notes in three days about the GGT New Longs, so I'll make a greater attempt at posting what's new.  Here's what has popped up out of the update:






































Of particular interest to me is the number of new longs in the Drug and Utility sectors.  If anybody has an idea about this, please let us know...  You can see that these stocks are very liquid, so there are some good candidates available.

============================

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

Regards,

pgd

Wednesday, December 15, 2010

Top 25 Portfolio Updates, GGT New Longs are Interesting, LCR has a Crack in the Bull Ice ...

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Meeting Reminder:


There is a monthly meeting this coming Saturday, December 18th, from 1 p.m. to 3 p.m. at the Great Falls Library, 9830 Georgetown Pike, Great Falls, VA 22066. The GGT, LLC investment club will meet immediately following the advertised meeting. WebEx information will be provided in the Yahoo! groups.

===================

Summary
  • The LCR System turned "somewhat unhealthy" today, at least through the slope of the 55d EMA.  Specifically, the slope of every EMA from the 5d to the 55d has turned downward, and this is problematic for bulls.  Protecting profits would be a good thing at this time, so I think I will.
  • The LCR EMA "slope of the slopes" has now had 5 of 6 days with a negative pointing slope.  This is what caused the slopes of the LCR EMAs to point downward and if this continues, the bears will be sitting around the Christmas tree instead of the bulls.  If Thursday is a down day too for the "slope of the LCR slopes" it will be the 4th consecutive day of this occurring.  This occurs more often with the LCR system than the pricing system, with the last few periods being 11/9 - 11/12, 10/14 - 10/10, 8/19 - 8/24, and 10/15/09 - 10/21/09. 
  • Unlike the LCR System, the Pricing System is healthy, with all of the slopes of the pricing EMAs (5d through 65d) pointing upward.  This tells me to keep my strongest holdings and sell the weakest.
  • Despite the Pricing System slopes all pointing upward, the "slope of the slopes" of the pricing EMAs have all been red the last three consecutive trading days.  4 consecutive days is VERY rare (December 28 -December 31st 2009 was the last time), so if we get 4 consecutive down days, I think we'll have to move to the sidelines.
  • %B and the GGT Strength index fell, but are still indicating more gas in the tank.  I need the values to fall further before I get myself into a "sell everything" mentality.
  • The Short-Term LCR Change Timer is in a confirmed CASH condition, and has been here since 12/9.  It will take two up days on solid prices/volume to change this (e.g., close of b'ness Friday at the earliest).
  • The Elder Intermediate-Termed Force Index Timer is LONG, indicating that we should be purchasing stocks LONG on this pullback.  Keep your shopping lists ready.
Yes, the markets are pulling back.  As you will see below, there has been a complete rotation of the Top 25 stock portfolio -- e.g., all the high-flying stocks that were on the list last week have been knocked OFF the list (because they no longer have a long status), or they have fallen in ranking below the top 25.  Either way, the markets are rotating.  Elder's method tells us that we should buy stocks on this pullback, so do not run for the hills just yet, as you should be figuring out what stocks you want to enter on the long side.

The next day or two will be important to the bulls.  If we see one more day of LCR "slope of the slope" negativity this will drive the markets into a short-term oversold condition.  If we meander sideways it's anybody's guess what could happen.  If we bounce from here on the news I'll use the opportunity to lock in profits, especially since I am traveling on vacation starting December 22nd.

====================

Top 25 Stock Portfolio

The close of the markets Wednesday night has revealed a nearly 100% turnover in the top 25 stock portfolio. 

The following positions should be closed, with (+gain/-loss) in parens:

AAPL (-0.29%)
AMZN (-2.60%)
AZO (+8.69%)
CEO (+1.41%)
CKH (-2.91%)
CME (+5.14%)\
CMG (-2.21%)
DECK (+13.98%)
DRQ (+2.87%)
ETN (+1.38%)
FCX (+14.47%)
FFIV (+9.18%)
FOSL (+5.63%)
LNN (+4.02%)
MEE (+0.81%)
MTD (+4.84%)
NFLX (+5.28%)
NOV (+2.18%)
RL (+4.96%)
SLB (-0.11%)

The only position left "standing" is BSFT, which is DOWN -4.85%.  Go figure.

BSFT will be adjusted to a 4% position on Thursday.  Positions heading downward at 10:00 a.m. will be sold and the portfolio will not be added to until the positions below turn upward, or near the end of the day, whichever occurs first.

New to the list are the following stocks:

ACPW
AREX
ENMD
FCS
FTK
FXEN
IGOI
IMAX
JAZZ
LNG
MWW
NCT
NG
SGY
SIMG
ST
TGA
UEC
URZ
VRUS
VSH
VVTV
WTI
XIDE

Of these stocks, these stocks were previously on the "top 100" list and are obviously in the top 25:

BSFT
IMAX
ST
VRUS

This simply goes to show that when the high-fliers rotate, they do so hard.  Also note that we had a number of stocks hit "New Cash" status today:

AAPL
NOV
SLB
MEE

PCLN had already been sold and confirmed it's sell status with a "Affirmed Cash" recommendation.  Ditto MIDD.

Since inception on 10/28/10, the portfolio is up +1.5%.  It reached it's peak value on 12/6/10, when it was up +2.34%.  The maximum draw down since inception is 5.3%, which occurred from the peak of 11/8/10 to the valley of 11/16/10.

In the last 30 days the fund has increased 4.86%.  According to Google Finance, the S&P500 has increased 3.39% in the same time frame.

The fund has been alive for 48 trading days.

=========================

Top 25 ETF Portfolio

11 ETFs will be rotated out of the ETF portfolio:

IJK (+3.44%)
IJT (+4.06%)
IWO (+4.91%)
MDY (+2.66%)
QLD (-0.45%)
RFG (+2.10%)
SOXL (+5.91%)
VPRO (+1.53%)
VBK (+4.57%)
VDE (-0.21%)
XLE (+4.45%)

11 ETFs will be added to the portfolio, at a 4% level:

DBS
MWJ
NLR
PXJ
SIVR
SLV
SMH
SOXX
UWM
XES
XSD

Positionally, the only ETF in the entire lot of 25 that remained in the same relative ranking position is AGQ.

The following ETFs are weaker, but still made the top 25 list:

PALL
OIH
MVV
TQQQ
BGU

The following ETFs are stronger, and have moved up in relative ranking.  Note that many of these are new purchases, but were previously in the "top 100" and are now in the "top 25" due to their strength:

ERX
USD
TNA
DIG
IEZ
SIVR
UYM
TYH
XES
KOL
SMH

New to the list are the following ETFs:

DBS
SLV
MWJ
UWM
PXJ
XSD
SOXX
NLR

The Top 25 ETF portfolio was started on 11/25/10, and since that time is up +4.75%.  It reached it's peak value on 12/13/10, when it was up +4.99%. The maximum draw down since inception is 0.46%, which occurred from the day the fund was started to the valley of 11/30/10.  This is not a normal circumstance and indicates that we need far more trades to judge the performance of this ETF portfolio before we commit our monies.


The fund has been alive for 20 trading days.

Positions heading downward at 10:00 a.m. will be sold and the portfolio will not be added to until the positions below turn upward, or near the end of the day, whichever occurs first.  All trades will occur sometime on Thursday.

===========================

New Longs

I note with considerable interest that the GGT New Longs, going into Thursday, are heavily weighted in Drugs, Bio, and Healthcare.  Here's the list of NL stocks:

AMRN
VPHM
RP
EXAS
ALKS
INWK
COT
ABV
CPSL
OSIS
PRXL
NWL
MOH
VM
PDCO
ARAY
KGC
MSG
ABM
MR
DVOX

To our resident Dr. Scott -- any thoughts here?

ETFs look interesting too:

XPH

SSG
OIL
UUP
FXP
DBO
PPH
SOXS

XPY is the Health/Pharma ETF, but is too thinly traded for my liking.

Note that SSG is the Ultra SHORT Semiconductors

Note that UUP is the DOLLAR -- a new long here does not occur frequently, and according to GGT, when it has occurred in the past, we've had more whipsaw action than not.  Be careful with this one.

FXP is the -2x Leveraged Contra China Xinhua25 -- this is confirming with many indicators.
PPH is the HLDRs Pharma, and completely dwarfs XPY.  THIS is one worth watching, and the stocks above confirm this (or the other way around).  Dr. Jeff?
 
SOXS is the -3x Semiconductors, so it confirms SSG.
 
================================
 
Remember, you are responsible for your own trading decisions, and I am not.  Investing in the Top 25 portfolios is very risky, as these are being forward tested at the present time.  If you do so, you acknowledge that you may get the heck beat out of you by the markets and that you have no one to blame but yourself.  We are in a period of consolidation, yet every one of the 50 stocks/etfs mentioned is on the long side of the market -- if we move down, they will get hammered. 
 
TAKE OWNERSHIP for your actions, and make sure you do your diligence.
 
Regards,
 
pgd

Short Term Timer Confirmed CASH, Intermediate Timer LONG, Stay the Course

Meeting Reminder:

There is a monthly meeting this coming Saturday, December 18th, from 1 p.m. to 3 p.m. at the Great Falls Library, 9830 Georgetown Pike, Great Falls, VA  22066.  The GGT, LLC investment club will meet immediately following the advertised meeting.  WebEx information will be provided in the Yahoo! groups.

===================

I have meetings today hence the brevity in this posting.

Summary

  • The LCR system is healthy, with all the slopes of the monitored EMAs (5d through 65d) pointing upward.  This is bullish on these time scales.
  • The "slope of the slopes" within the LCR system have fallen 4 of the 5 last trading days.  This is normal-to-bearish market behavior, but if this continues onward to 3 or 4 consecutive days, we know that this trend is in trouble.
  • The Pricing system is healthy, with all the slopes of the EMAs pointing upward.  Like the LCR system, this is bullish on these time scales.
  • The "slope of the slopes" within the pricing system have seen two solid days of downward movement.  If we see four days then we know that this trend is in trouble.  
  • The Short-Term LCR Change Timer is in a CONFIRMED CASH condition (-1).  We are at least 2 days from seeing this move long.
  • The Intermediate-Term Elder Force Index Timer is LONG.  This is telling me that it is okay to purchase stocks on the LONG side.
  • The GGT strength index fell for the second day.  Nothing here to get worried about, and the level of 0.674 suggests that there is plenty of upside room.
Overall, I've been pruning my weaker stocks from the portfolios.  I am not selling to lock in profits, as many of the holdings I have still retain solid chart patterns.  I'm willing to tolerate a drop below par for those equities that have good Elder patterns.  In short, I intend to stay the course with the strongest of holdings.

==================

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

Regards,

pgd
Meeting Reminder:

There is a monthly meeting this coming Saturday, December 18th, from 1 p.m. to 3 p.m. at the Great Falls Library, 9830 Georgetown Pike, Great Falls, VA  22066.  The GGT, LLC investment club will meet immediately following the advertised meeting.  WebEx information will be provided in the Yahoo! groups.

===================

I have meetings today hence the brevity in this posting.

Summary

  • The LCR system is healthy, with all the slopes of the monitored EMAs (5d through 65d) pointing upward.  This is bullish on these time scales.
  • The "slope of the slopes" within the LCR system have fallen 4 of the 5 last trading days.  This is normal-to-bearish market behavior, but if this continues onward to 3 or 4 consecutive days, we know that this trend is in trouble.
  • The Pricing system is healthy, with all the slopes of the EMAs pointing upward.  Like the LCR system, this is bullish on these time scales.
  • The "slope of the slopes" within the pricing system have seen two solid days of downward movement.  If we see four days then we know that this trend is in trouble.  
  • The Short-Term LCR Change Timer is in a CONFIRMED CASH condition (-1).  We are at least 2 days from seeing this move long.
  • The Intermediate-Term Elder Force Index Timer is LONG.  This is telling me that it is okay to purchase stocks on the LONG side.
  • The GGT strength index fell for the second day.  Nothing here to get worried about, and the level of 0.674 suggests that there is plenty of upside room.
Overall, I've been pruning my weaker stocks from the portfolios.  I am not selling to lock in profits, as many of the holdings I have still retain solid chart patterns.  I'm willing to tolerate a drop below par for those equities that have good Elder patterns.  In short, I intend to stay the course with the strongest of holdings.

==================

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

Regards,

pgd

Tuesday, December 14, 2010

Top 25 Portfolio Update

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With the close of markets on Tuesday, December 14th, the GGT system has issued a New Cash recommendation for PCLN, which will be sold early Wednesday morning.  All closed positions will be replaced with equities from a new Top 25 list Thursday morning.

Regards,

pgd

Intermediate Timer is LONG, Short-Term is Indecisive

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Meeting Reminder:


There is a monthly meeting this coming Saturday, December 18th, from 1 p.m. to 3 p.m. at the Great Falls Library, 9830 Georgetown Pike, Great Falls, VA  22066.  The GGT, LLC investment club will meet immediately following the advertised meeting.  WebEx information will be provided in the Yahoo! groups.

=====================

Summary for Monday, December 13th

  • The GGT LCR system is bullish with all of the slopes of the EMAs pointing upward.  Until these show some signs of pointing downward, the database is expanding on 5d to 65d periods.
  • The GGT Pricing system is bullish with all of the slopes of the EMAs pointing upward.  Since we put prices in our bank accounts, this is suggesting that your account has moved upward in value from 5 days ago, as well as 65 days ago.
  • The Short-Term LCR Change Timer is floundering at the CASH-LONG (0) level, indicating indecision.  The bias is towards CASH on a short-term (~ 1 week) basis, e.g., entering right now could be difficult to attain profits.
  • The Intermediate-Term Elder Force Index Timer is indicating LONG.  I interpret this as being an indication that we should be purchasing stocks on the LONG side, certainly not shorting.
The markets are slowing marching upward with a 3 steps forward, 2 steps back approach.  This is fine, so I am purchasing strong stocks on the pullbacks.

=====================

Elder Candidate Stocks

There are over 400 stocks that meet the most basic form of Elder Force Index criteria going into today's action. The basic filter is this:
  • Close > $1
  • 50d MA Volume > 100K shares
  • Force Index (2d) < 0
  • Force Index (13d) > 0
  • Dollar Volume > 6,000,000
Increasing the minimum share price to $5 and the Dollar Volume > 10M reduces the list to 340 candidates.  Many to choose from.

Here is a short list of some of the Elder candidates that I am watching:

ZAGG
RVBD
DECK
FFIV
GPI
ATHN
NTGR
OVTI
PLCM
DCTH
DAN
AYI
GRA
RCII
FINL
NDSN
ADSK
ATPG
PSS
VLO

I plan to enter on strength, e.g., increasing prices on increasing volume.

===========================

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

Regards,

pgd



Changes to Top 25 Stock Portfolio

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With the close of markets on Monday, December 13th, GGT has indicated that the following positions in the Top 25 Stock Portfolios should be closed:


  • CSTR - New Cash as of 12/13
  • MIDD - New Cash as of 12/13
  • OII - New Cash as of 12/10
These positions will be closed after 10 a.m. on Tuesday, December 14th, and will be replaced with normal portfolio rotation the morning of Thursday, December 16th

==================

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

Regards,

pgd

Sunday, December 12, 2010

December 12 Weekend Summary

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Summary

  • The GGT Long-Cash Ratio system is healthy.  All of the LCR EMAs are pointing upward, which means that the database is expanding in terms of available good stocks to choose from on all measured timeframes.
  • The GGT Pricing system is healthy.  All of the pricing EMAs are pointing upward, which (should) mean that your net worth is increasing on all measured timeframes.
  • The Short-Term LCR Change Timer is in CASH, although it transitioned to CASH-LONG (0) on Friday.  This move to cash may have been a whipsaw -- it's hard to tell at this point.
  • The Intermediate-Term Elder Force Index Timer is LONG, which says that it is advisable to purchase stocks on the LONG side.
The upcoming week not withstanding, all the indicators over the last week are continuing to point us to the long side.  Despite being at new highs on the indexes you are crazy if you think you should short the market at this point, especially with the LCR EMA slopes all pointing upward.

=====================

The Long-Cash Ratio (LCR) System

Here's the view of the LCR system.  As with all my images, right-click on the image to open in a new tab or window:

































As you can tell from above, the LCR has had a good run since the beginning of December, with 6 of the last 8 trading days showing an expansion in the LONG recommendation of over 2700 stocks.  This is bullish.

The middle of the table is where the meat resides.  This area shows the "slope of the EMAs", and when this area is green, we should be buying stocks on the long side.  As you can see, it's very green, and has been since the 65d EMA slope turned green on 12/3.  You had a head's up on 12/1 that the ice was thawing by the 5d, 8d, and 13d slopes all moving green, and on 12/2 the change of the 21d and 34d again should have made you more comfortable about long positions.   12/3, in conjunction with the Elder status, would have given you the "all in" signal.

A hold-out on this present bull leg is the left side of the table, where we see that the 21d EMA is still below the 34d EMA.  This condition also exists for the 34d/55d EMA pairs.  This area simply tells us that the bull leg is relatively early -- that we need the calendar to click off the days AND we need continued upward expansion of the LCR system for these two holdouts to confirm green.  If this area fails to confirm within 21 trading days of the 5d signal moving green (e.g., by the end of December) I think the writing will be on the wall that we may do more drifting that upward movement -- we'll see.

The right side of the table above shows the normal "slope of the slope" of the EMAs.  We like to see more green than red, which means that the LCR EMAs are going to continue to point upward.  When we start seeing lots of red on the right side of the graph we know that this leg will be under pressure.  Right now, it looks good.

From the perspective of the LCR system, we're in good shape for continued movement into the long side of stocks.  As with all trend following systems, please note that this only provides for a read on where we have been, not where we are going.  The markets could easily reverse at any time, and we'd not see it coming using this methodology.

=========================

The Pricing System

Here's the most recent dashboard of the GGT Pricing System:



































Friday saw a large movement in the GGT pricing system -- up nearly 2.24% on volume that was solid at the 50d MA level.  Remember, GGT screens for stocks that meet the following requirement:
  • Above $1 in closing price
  • Above 100K shares in 50d MA Volume
  • Trade on the three primary exchanges.
There are over 2700 stocks in the GGT database, and the performance of these stocks, which I think comprise higher "quality" stocks than just what can be found on the major exchanges, typically is better.  For so many stocks to advance (recall that the LCR increased 13% too) in price shows that the day was solid in performance.  IBD said volume and turnover were low on Friday, and while volume on the NASDAQ was lower, overall Friday was a very good day.

Like the LCR system, the meat of the figure above is in the middle portion of the table.  Note that ALL of the pricing EMAs are pointing upward -- the database is appreciating in price on all measured time frames, and this can only be interpreted as bullish.

The left side of the table above shows that the pricing EMAs are "properly aligned".  For the most part, with the exception of the 8d and 13d around the middle of November, these EMAs have been bullish since September, with no major nails in the coffin (e.g., all red) since August.  This system alone has confirmed that we should stay the LONG course, at least for now.

On the very right of the figure I've shown the %B and GGT Strength Oscillator readings.  As you can see, both still indicate that there is gas in the tank...

For now, the pricing system is very bullish.  Stocks that we are holding should be appreciating in price, and gains should be occurring.  If the stocks that you are holding are dropping in price then you are holding the wrong stocks.  This isn't to say that you should sell them -- you shouldn't if they are only down a percent or two -- but you should consider how to add winning stocks to your portfolio.

=====================

The Timers

Here's the view of the two timers I follow:







































The left side of the graph shows the Short-Term LCR Change Timer, which with Friday's action, transitioned from CASH (-1) to CASH-LONG (0).  If the LCR moves up on Monday I should purchase stocks LONG, on a short-termed basis.  My available pool of ETFs to chose from is as follows:
  • IWM
  • QLD
  • TNA
  • UWM
  • UYG
  • VTI
Note that without exception all of these ETFs are significantly above their 50d MAs, so I think entry at this time is less than ideal.  Nevertheless, a signal is a signal, and I'll follow accordingly.

On the right side of the figure is the Intermediate-Term Elder Force Index Timer, which continues to indicate that we should be long in the market.  The timer confirmed a move long using the simple-moving-average (SMA) method on 12/2, and since then the markets have risen ~1.9% (according to the S&P500).  Using an exponential moving average (EMA) method the signal came earlier, with the close of markets on 11/26, so purchasing the SPY the morning of the 29th would have you up +5.5%.  It doesn't always work out this way, so the more conservative method generally will keep us out of hot water.

Given that Friday was such a banner day, finding stocks that meet the Elder FI(13) > 0 and FI(2) < 0 is challenging.  Stocks that I have screened for other criteria, in addition to the Elder criteria, are:

AAWW
BEAV
CQB
DBA
IRE

These 5 stocks pulled back on Friday from lofty levels, and will need to continue higher on Monday in order to move forward with initial positions.  Note that if I do move forward with any of these, it will be at a 20% of a full-position level.

There are numerous stocks out there that have solid Elder FI(13) fundamentals but are overbought and need to pullback a bit.  When I screen this long list against Pascal Willain's Effective Volume (EV) site (www.effectivevolume.eu) I come up with a list that shows  good Elder fundamentals as well as accumulation by larger purchases, relative to 8 days ago:

COF
ENER
HELE
HIG
KIE
MDT
T
TCB
THC
ZAGG
ZMH
NVO
ORCL
PG
SPWRA
TBF
TBT
TMV
ADTN
CFN
FSLR
RF
SNV
WTS
ACM
STO
UN
STEC

Note that the FI(2) on all of these is >0, so entering Monday without a pullback would be foolish.  For the most part these equities seem to be gathering steam, so I'll keep a careful eye out for opportunities to enter.  Note that the order of the list is relative ranking in terms of the quality of the chart pattern with respect to Elder FI(13), slope of 13d and 34d lines, volume levels relative to the 10d MA Volume, and price momentum, with the "best" of the list at the top (although all are good).  One way to enter these would be to place a limit order at the EMA8 line, or some variant on that theme.  Note that ALL of these are trading above the EMA8 level...

======================

Palladium

Palladium, as measure by the ETF PALL, is in an uptrend on the weekly chart but is in a cross-current on the daily chart and is neither in a confirmed uptrend or downtrend on the daily.  I'd need PALL to cross above $74.48 then pull back in order to enter.  The chart pattern would need to improve from here it is in terms of overall 13d and 34d slopes.

Heating Oil

I use the ETF UHN to indicate what heating oil is doing.  In general, heating oil is bullish on the weekly chart but like palladium, has hit some rough roads on the daily chart.  I'd need UHN to cross above $29.35 then pull back in order to enter.  Overall, the chart pattern of UHN is worse than that of PALL.

Brazil

Brazil, as measured by a basket of stocks from that country, seems to be holding the 65d EMA line with the tails of price action on Thursday and Friday, which I would consider bullish for the longer term.  While still in an uptrend (I use the term loosely), the aggressiveness of the uptrend has been weakening over the last month or so, with lower highs in terms of slope of the 65d line.  This being said, the slope line is still positive, so Brazil is to be considered in an up trend, albeit weak.  Note that almost all of the stocks from Brazil are experiencing poor chart patterns, so be selective if you venture here.  Only GGB, out of 30 stocks that I track, is worthy of further consideration by me.

In terms of ETFs, EWZ is the Brazillian ETF that has the most liquidity.  It looks terrible on the weekly and daily scales, and is a solid avoid.

Gold

Gold, as measured by the several indexes available, indicates that it is in an uptrend as far as the weekly is concerned, but the daily is having problems.  The slope of the 65d EMA is very positive, but is pulling back from the highs of this past Monday and Tuesday.  The slope of the 5d EMA is negative and heading downward, so with no floor in sight, now is not the time to enter.  Furthermore, when viewing stocks in the Gold and Silver industry, the slope of the 13d EMA is just crossing the slope of the 34d from above, which is an Elder sell signal.  Of the 16 stocks that I track in this industry, only 4 have a good chart pattern, so caution is advised.

Oil & Gas

Overall, the integrated Oil & Gas companies are in an uptrend.  I track 11 stocks in this group and in general, the group is bullish.  5 of the 11 stocks have bullish patterns with the other 6 breaking down.  XOM and CVX have the best patterns, but XOM is too mature for me to enter at this point.  CVX looks good on the weekly if it can clear $87.08 then pull back a bit, allowing for entry.  BP appears to be out of the woods and just flashed a buy signal this past week.  RDS.A is consolidating and if it can move upward, it looks good.  MRO looks good for entry if we can get a good pullback on the intraday chart.

U.S. Dollar
I use the ETFs UUP and UDN to evaluate the U.S. Dollar Index.  Neither of them have chart patterns that I would call attractive.  UUP has been floundering sideways for about 3 weeks, and needs to start moving upward more aggressively.  UDN has significant resistance overhead, and I personally doubt whether it can overcome the resistance.   Note that if UUP appreciates that there is a high likelihood that the markets will be falling, as UUP is inversely related to the market prices.  Of course, we want a strong dollar, but this results in our ability to purchase foreign whatevers at a lower number of dollars per unit of foreign currency, which is bad for their exports.  

=================

Remember, you are responsible for your own trading decisions.  Please do your own diligence and take ownership for your actions.

Regards,

pgd


Disclaimer:  As of this writing I own or influence ownership in the following equities:  EFA, SPY, VXF, ARUN, BPOP, DRYS, F, FLEX, HD, IRM, LTD, MCRS, MI, MYL, PAY, PFE, SHO, TC, UBS.


Friday, December 10, 2010

Short Term Timer = CASH, VTI Transitioned to CASH

.
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....

=====================
.
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.

==================

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.

================

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%.

================

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%.


======================

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

======================

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

Thursday, December 9, 2010

Possible Good Entry Today if Market Moves Upward

 .
Summary
  • The Long-Cash Ratio (LCR) system is bullish overall, with all the major slopes on the EMAs in an uptrend.  This means that the database is expanding in terms of stocks appreciating in price and volume on a +5d and onward time scale.
  • The LCR fell on Tuesday by -7%, which is a 1-day contraction in the number of database stocks that are meeting price and volume criteria for expansion.  Nothing to get ruffled about.
  • The GGT pricing system fell -0.14% on volume that was 9% higher than the 50d MA.  Falling prices on higher volume is worrisome, and needs to be watched.
  • The GGT pricing system is bullish across the board going into Wednesday's action, with all of the pricing EMAs pointing upward.
  • %B for the database continues to weaken, and is now at 0.7998.  This correlates with the GGT strength index, which fell to 0.702.  Given the status of the LCR value, as well as the LCR system, we still have gas in the tank to move upward.
  • The Short-Term LCR Change Timer system has moved to LONG-CASH because the LCR fell yesterday.  If today is weak it will move to CASH, signalling that short-term trades should be liquidated.  Conversely, if the LCR moves up, this indicator will remain in LONG-CASH.
  • The Elder Force Index Intermediate-Timer system is LONG.  It is okay to purchase stocks for longer holding periods.
======================

Today's Strategy

In general, we're looking good overall from this morning's vantage point.  The LCR system indicates that we have more stocks exceeding pricing and volume thresholds that we've had in the local past, which is bullish.  All the LCR EMAs are pointing upward, which is good.  All the pricing EMAs are pointing upwards, which is good.  The Elder 2d Force Index on the GGT universe has moved negative, which means that if today is an up day overall that this could represent a good entry period.

Dark clouds on the horizon are simply that prices dropped on a 1-day scale on higher volume.  This is the definition of churning, and is problematic if it continues.  1 day does not make a trend so we do not have to worry, per se.   I dont' see any other significant storm clouds, except the ongoing news about POMO stopping today.

I'm focusing on selecting stocks where the Elder 2d Force Index is negative, going into this morning, then the stock moves higher on higher volume.  Here's a list of quality stocks that I'm looking at:

NG
PAL
CPX
CYD
SOA
SSRI
SPRD
ATW
ATPG
CENX
CEO
OMX
HT
JCI
TC
CE
AEM
PENN
HRC
KND
MGA
FST
TPX
VECO
TEX
APA
GFI
VALE
XEC
CSX
HP
HMC
TLM
SFL
DNR
AAN
CLF
CAJ
APH
UNS
MYL
BEC
CBG
HMY
CPT
AIV
CAH
DVN
TMO
BCR
NSC
RRC
DIS
SU
GXP
MLM
MCK
HK
RMD

I'm screening these with Effective Volume (http://www.effectivevolume.eu/), looking for shorter-term appreciation / positive deviation between price and the 20d MA on EV.  This shows that big money is moving into the stock, forcing it up faster than historical.

========================

Trading Plan for Wednesday

I am presently in CASH via the Short-Term LCR Change Timer.

I intend to enter Elder stocks on the long side if they show appreciation and volume throughout the day.

 =========================

Remember, you are responsible for your own actions, and I am not.  Please review the disclaimer on the left side of this blog.

Regards,

pgd

Wednesday, December 8, 2010

A Public Apology to Hsin

.
As many of you know, Hsin Yen and I trade together, e.g., we have joint access to multiple accounts.  There is a tremendous amount of synergy that exists when two like-minded individuals pool their knowledge and resources.  There is also danger when when this sharing disconnects, even for a day.

Yesterday, accounts that Hsin and I trade took a beating, and because of this, today's setup is at a disadvantage.  Hsin, being the consumate professional that he is, took the responsibility for this performance in his blog at

http://athenastrategytrading.blogspot.com/

Let me say, with no ambiguity, that the performance yesterday was due to my actions, and none of his.  Specifically:
  • I moved into the markets on the news of the previous evening (extension of Bush tax cuts, extention of unemployment benefits, etc.), and not on the actual performance of the equities that I selected.  We have a rule not to trade news and I violated that rule.
  • I moved into the markets in the pre-market period, which in retrospect, has not been a successful avenue for me in entering trades (determined in hindsight analysis yesterday);  We have a rule not to enter markets before 9:46 and I violated that rule.
  • I moved into positions that were extended, and violated a rule that he and I agreed to that the entry needs to be less than the EMA8 + 40%ATR(20).  NONE of the positions I purchased fit this condition, so I entered positions at an overbought/over-extended level. 
  • I did not properly screen for sector diversification.  As many of you know, at one time in my past I religiously ran daily correlation studies on stocks, ensuring that they were from uncorrelated sectors.  There is no excuse why I am not doing this now, and as a consequence, 35% of the position was weighted in various precious metals.  Precious metals fell hard yesterday.  I intend to ensure sector diversification going forward.
In any post-mortum analysis of "why" trades fail a dozen reasons can be created.  These are simply excuses.  The bottom line is that I had not internalized these rules, and because of this, we've been hit hard.  As a consequence of my actions, hard-earned gains of the last two weeks were wiped out.  Because of this I owe Hsin a most heart-felt and somber apology, and a promise to stick to our rules.

Hsin, I have the utmost respect for you as a trader, investor, confidant, and friend.  Please accept my apology for my actions, and please know that I absolutely know that we have jointly created these money-management rules because we have made these mistakes in the past, and vowed never to repeat.

========================

GGT Summary
  • In general, the LCR system is heathly/bullish.  We are at an early stage though, so a failure could certainly materialize.  ALL the slopes of the EMAs are positive, and ALL of the "slopes of the slopes" of these EMAs are positive.  This is overall bullish.
  • In general, the Pricing system is healthy/bullish too.  ALL of the slopes of the pricing EMAs are positive, so we are in an uptrend.  We do have headwinds though, as ALL of the "slopes of the slopes" of these EMAs are pointing downward.  We're pulling back slightly in terms of prices, which provides entry possibilites.
  • While %B has fallen from 1.0047 to 0.9073, the GGT strength index increased 3.7%.  This divergence shows that there is still "gas in the tank" for a bull leg.
  • The short-term LCR Change Timer is LONG.
  • The intermediate-termed Elder Force Index Timer is LONG. 
==================

I'm in Ft. Worth this week, so I'll post entries as my schedule allows.

Regards,

pgd

Monday, December 6, 2010

Moving Long in 3 Funds as of Monday, December 6th

.
GGT has signaled LONG for the C-Fund/SPY and S-Fund/VXF, with a conditional LONG for I-Fund/EFA.

Contribution allocations are as follows (3-Fund only; F-Fund/AGG is too risky in the face of inflation):

C-Fund / SPY:  36%
I-Fund / EFA:  7%
S-Fund / VXF:  57%

I have placed my order at www.tsp.gov and it should be effective as of the close on Monday, December 6th.

Please read my Monday, December 6th comments concerning the SPY at

http://greekgodtrading.blogspot.com

=============================

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

Regards,

pgd

Timers are Long, SP500 Resistance Needs to Be Overcome

.
Summary

  • Significant resistance at $123 on the SPY; we need to close above this else Katie, bar the (exit) doors....
  • Short Term and Intermediate-termed timers are LONG
  • LCR confirms LONG
  • Pricing system confirms LONG
We probably should be long on any sign of weakness...

===============

SPY

I'm not a big believer of moon cycles, planet alignment, golden rules, or Fib analysis, but I certainly believe that the phenom exists because other people are constantly looking for correlations.  One correlation that seems to be particularly strong (right now, not always) is the Fib retracement level of 61.8%, which often reveals itself as support and resistance.

Take a look at the following chart, which shows both the $INX and SPY, the S&P500 on a weekly scale:






















The top graph is of the SPY, and the bottom graph is of the $INX, which is the S&P500.  The two track each other exactly, as we expect.

What we see here is that we are encountering significant resistance at SPY = $123.00 / $INX = $1229.01; failure to close above this level in the near-term will be considered bearish and a failure of this bull-leg for many (including me).  I've highlighted previous areas where this has been an issue -- the more times we hit a resistance level without penetrating the greater the likelihood that the resistance level will hold.

We seem to be holding ....

Remember, this is a weekly scale.

So, if you believe in the above, take a look at the next graph:























The figure above basically shows the uncertainly in local support levels, on a weekly basis, for the SPY.  It essentially states that we could see support in the range of $117.22 to $117.92; failure to hold these levels would certainly be very bearish overall.

Food for thought...

=================

The LCR

The Long-Cash Ratio (LCR), which is a measure of how many of the stocks in the database have some form of LONG recommendation to those that have a CASH recommendation, increased for the previous week from 0.887 (1396/1574) to 1.816 (1758/968).  This is a large increase for one week, and suggests that it is time for a pullback.

Here's the LCR chart:
































On the good side of evaluation, note that we now have the 5d > 8d EMA of the LCR, as well as the 8d > 13d.  This is moving in the right direction, and further movement where the longer EMAs are properly aligned is further confirmation of a bull leg.  Unfortunately, until we get this intermediate-length confirmation, we have to remain focused on the short term, and consequently, we'll have to be watchful of a bull-leg failure.

The middle of the figure shows the slopes of the LCR EMAs.  Friday was a great day -- all green.  This is an absolute requirement for any form of sustained bull leg, and we must continue this pattern (green) if we want the LCR EMAs to show proper alignment.  Simply look back in the past at this indicator and you'll see why this is a leading indicator relative to the positioning of the respective LCR EMAs.

The right of the figure shows the "slopes of the slopes" of the LCR EMAs.  We've had three solid days of green, which means that with the middle of the graph showing all green, that "the car is driving forward with our foot on the gas".  This is bullish, to be sure, and we need to participate.

From all LCR viewpoints, weakness on Monday is a good opportunity to purchase stocks long.  I plan to do so, discussion of the $INX / SPY notwithstanding.

===================

GGT Pricing

Friday, December 3rd, saw another consecutive day of increases in prices within the GGT database.  The price index moved upward another 1.82%, showing an increase in 4 of the 5 days of the week, which is bullish.  Despite this bullish price action, volume was up only on 3 of the 5 days, which gives me pause.  The net change for the GGT from Friday close to Friday close was from $26.52 to $27.97, or 5.46%.  This is a huge amount of change for 1 week.

Here's the pricing table:

































As you can see in the figure above, the pricing EMAs are all properly aligned, with the 8d > 13d > 21d > 34d > 55d.  This is bullish.

The middle of the table shows that the slopes of the pricing EMAs are all pointing upward, which is bullish.

The right side of the graph shows that the slopes of the slopes of the pricing EMAs are all pointing upward, which again means "the car is driving forward and our foot is on the gas".

Next to the slope of the slope area is a new tracking that I am doing -- this is Bollinger's %B reading of the database.  Values of 1.0594 suggest an overbought level and that we are due for a pullback.  Note that next to this, in the rightmost position, is the GGT strength oscillator, which shows that we also relaxed on Friday from Thursday's level.  There seems to be a good correlation between the %B reading and the GGT strength index, which gives me further confidence in our tools.

What is significant about the graph above is that it is bullish across the board -- and now combined with the LCR analysis, indicates that we should move aggressively into long positions.

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The Timers

The Short-Termed LCR Change Timer is LONG, and has been since action on Thursday.  I have chosen not to chase this timer, and prefer to wait for it to reset into CASH and transition long prior to re-entry.

The Elder Intermediate-Termed Force Index Timer is LONG, and has been since action on Thursday.  This timer is indicating that we should purchase stocks for the intermediate-term on the LONG side.

To this end, here is my list of candidates for Monday:

SINA
ARUN
LTD
EBR
MOT
PAY
BPOP
AAPL
MELI
DECK
RIO
AZK
UBS

Many of these are overextended, so I will wait for a pullback in prices prior to entry.  I will enter with 20% positions to start, SP500 discussion notwithstanding.  Here's the Timer table:





































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Trading Plan for Monday, December 6th

I intend to move into the aforementioned stocks on an intermediate-termed basis.  I am presently holding 20%  positions in the following stocks, and will add to them if they pullback and show signs of reversing:

HD
MI
RYAAY
PFE
WY

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

Regards,

pgd