Sunday, February 13, 2011

2/12 Weekend Update -- Bullish, Toppy, but full of opportunities ...

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Thank you to those of you who attended our Tri-State Investor's Group meeting on Saturday.  It was a great meeting -- I had fun -- and I think we're on the verge of being able to do some things with our trading / investing that we've never been able to do in the past.  A link to the WebEx recording can be found in the GGT Yahoo! forum.

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Summary

  • The database is in an uptrend in terms of the number of LONG-rated stocks compared to those that are CASH-rated, on all time frames from 5d through 6d.  This is completely bullish.
  • The slight pullback in the major indexes on Wed/Thurs of this past week provided good opportunity to enter stocks.  For the stocks rated as "New Long" going into Friday morning, they are up a collective 1.8% on Friday alone compared to their close on Thursday.  These stocks were screened with Effective Volume prior to notification in my blog entry on Friday.
  • The GGT Price Accumulator Change Oscillator tool has transitioned to +14, which places it squarely at the top of the range and is telling us to wait for a pullback under -5 (Tuesday was -8, as was Wednesday) before we purchase stocks on the long side.  This means we should not purchase stocks on Monday, as a pullback is eminent.
  • We are toppy.  We have hit the same relative gain levels that we hit in December in terms of database strength (peak), and while we certainly can go higher, clearing a previous peak is always an interesting event.  I do advise keeping one finger on the exit button, as we started this bull much higher "up" in the indicators than we did, say, at the start of September.  
  • Note that I'm seeing some cracking in the bull ice on the NYSE Composite Index as well as the NYSE AMEX Composite Index, meaning that these are showing signs of indecision, not mass exodus, but enough that they appeared on my radar and we need to know about them. The other major indexes look toppy but bullish.
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GGT New Longs for Stocks (Screened for $-Vol > $10Msh)

Not that I intend to play these (we are overbought right now), but it's worth watching the whales:
  • LYB saw someone pick up a 700K block on Wednesday, and LEV has been in a uptrend since Monday.
  • ALB has been experiencing flat price (within a range, of course), but is clearly in LEV accumulation mode.  Considerable activity on Friday above the 40K shares/minute level.  ALB is 1.1% below my buy limit.
  • TLAB is one of the "OMG" stocks.  Abnormal buying started at Wednesday's close when someone picked up 280K and 225K blocks @ $5.60 within two minutes of each other.  Friday's close saw another 278K and 214K share blocks being picked up in the last 5 minutes.  LEV ended the week at the highest level in the past 8 days.
  • GOOG saw a flurry of buying in the last 30 minutes of Thursday which carried into Friday morning.  It then continued mid-day, just after 1 pm, but LEV upticked again in the last 5 minutes.  The final LEV values are the highest in 8 days.
  • NRG fails the 3-day accumulation recommendation of LEV divergence from SmEV (it's been diverging 2 days and LEV is increasing while SmEV is decreasing), but is noteworthy because someone picked up 200K shares at $21 just after 3 pm.  NRG is 0.8% below my buy limit.
  • SI whipsawed on Thursday as far as GGT is concerned, but on Friday was back to a New Long status.  Someone picked up 800K shares at 10:06 a.m. @ $127, so do the math -- this was a $100M transaction, all in 1 minute.  Disclaimer:  GGT, LLC owns a position in SI, established on 2/8.  SI is 0.2% below my buy limit.
  • LEG is brandy-spankin' new to the LEV moving upwards group, with the divergence only being for the past 4 days.  Price was flat for the first 3, then on Friday it was off to the races.
  • Something is going on in the insurance world.  ORI ROCKETED upwards on Friday, and someone picked up 700K shares at 1:05 pm @ $10, spending $7M in one minute.
  • RDN saw the same behavior as ORI above, with HUGE accumulation well over 250K blocks early in the day.  Volume for the day was 133% above the 50d MA, and LEV has been diverging for 3 days on this one.  There was a flurry of activity in the last 15 minutes, all well above 100K shares, so again, something is going on in the insurance group.
  • OHI saw solid accumulation while price fell on Wed and Thursday, with a bunch of activity at the end of the day on Tuesday which drove LEV upwards, after OHI had sold off most of the day.  Friday saw two, 30K blocks purchased at 3 pm and shortly thereafter, which represent big trades for this 14MSh size stock.  OHI is 0.2% below my buy limit.
  • ILMN is another "OMG" stock.  Someone picked up 2M shares at 1:02 pm @ $71.70, so doing the math again, we're looking at a $143M transaction in one minute.  Yowza...  Note that the LEV pattern is not very strong here on the 8d, but on the 40d it looks really good.
  • SMTC has a beautiful, linear, lower-level to upper-right LEV pattern that is diverging from the SmEV levels.  Also note that SmEV sold off late Friday, while LEV increased, which I consider bullish. 
  • VECO has been off to the LEV races since Tuesday morning, and is looking good.  Price fell on Wednesday, but LEV moved upward.  Most of the price movement on Thursday was due to LEV accumulation.
GGT New Long ETFs (Filtered for $-Vol > 10MSh)
  • KRE looks incredibly compelling here.  Volume was 60% higher than the 50d MA, and there were several 100K blocks purchased, with the last one just prior to close.  Accumulation was occurring as price was dropping, then Friday, everything reversed.
  • XLP has been under solid accumulation for the past two days, so while at the inside of our comfort zone, the LEV jump on Friday was remarkable, especially in the last 15 minutes of trading.  
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Trading Plan for Monday

For the most part I intend to sit on the sidelines.  The GGT Price Accumulator Change Oscillator is at a peak value, telling me to keep my powder dry.  This being said, ILMN and the mentioned ETFs look absolutely appealing, so if they meet entry criteria I may jump in with a 25 or 50% position, just to get a marker on the table.

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

Regards,

pgd

Position disclaimer:  as of this writing, I own/influence positions in the following equities:  AAPL, ACH, AF, BGU, BTI, COST, DAG, DBA, DIG, ERX, FAS, HPQ, HSY, IEO, IEZ, ITB, IYE, KCG, LULU, MVV, PCLN, QLD, RFMD, RIMM, RJA, SI, SOXL, SRX, SSO, SWI, SWY, TNA, TQQQ, TYH, UCO, UPRO, UYG, UYM, VDE, WAT, WPI, XLE, XME, XOP, EFA, SPY, VXF