Friday, February 25, 2011

GGT Longs, confirmed with Effective Volume, Appear Interesting

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Summary:

  • The GGT price index moved up +0.28% yesterday on volume that was 19% above the 50d average level.  This is within general noise and is unremarkable.
  • The bleeding has stopped as far as the GGT price EMA slopes are concerned, meaning that there was no change Thursday compared to Wednesday.  This being stated, the 5d, 8d, and 13d slopes are all pointing downward, which is bearish.  We need these to reverse and resume an upward trend from here for the bull to resume.
  • Our new tool, the Price Change Accumulator, has moved from two days of a reading of -14 (buy buy buy) to a value of 0, which is middle ground.  If you feel compelled to buy equities, make sure they are performing strong relative to the market, as you need some form of wind in your sails.
  • The LCR Short-Term Change Timer is in CASH.  We are at least two trading days away from a long reading, and today (Friday) and Monday will need to be data-base expanding days in terms of long-rated stocks for this to move long.
  • The Elder 13d Force Index timer is in a "MIXED" mode.  This means that either the EMA or the SMA methods of calculating the 13d FI are not in agreement, and this typically happens at pullbacks.  If this moves to "CASH" we will confirm a downside bias, if it remains in cash we will be in limbo.  I would not commit a tremendous amount of cash to equities at this point.
  • The GGT Long-Cash Ratio (LCR) has been below 1.0 for two consecutive days.  This means that there are more stocks in the database with a CASH rating than with a LONG rating.  Although nothing can be gleaned from this number alone (e.g., driving at 100 mph does not tell you about the road ahead), the trend is down over the past 3 days (we are slowing), and presently, we have been slowing for 3 consecutive days.  The probability of continuing this trend (7 of 215 total runs with 4 consecutive days being lower, or 3.3%) is much lower than the probability of a reverse (41 of 215 total runs with a reversal occurring after 3 consecutive down days, or 19.1%).  With futures up as I write this, my bet is a reversal day as far as the LCR is concerned.
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GGT New Long Stocks

Here are stocks that I am watching today:
  • HES is the highest ranked New Long, and while the large Effective Volume (LEV) level hasn't the characteristic "V" divergence pattern from SmEV that I like, TEV has been steadily increasing and it held up well yesterday on volume that was 45% above average.
  • PCS is newly emerging as a LEV candidate under accumulation, and volume was 63% above average yesterday.
  • MMI has been under steady LEV accumulation, possibly because of their release of the XOOM, but the price has been steady while LEV has been diverging nicely.  This is up 1.22% in premarket.
  • HNZ saw a huge divergence on LEV / SmEV over the past two days, and although it is down -1.27% in premarket, volume yesterday was 83% above average.
  • CROX saw huge LEV accumulation late in the day and is noteworthy
  • HRB saw an upgrade yesterday, resulting in volume that was huge.  It's worthy of your time to give this a look-see.
GGT New Long ETFs

Here are the ETFs that are popping up on the radar and are worthy of my time:
  • TIP is a TIPS Bond fund from Lehman which is showing LEV accumulation.
  • VXX is the S&P 500 VIX volatility index ETF, and is showing significant accumulation.
  • IEO, which is the DJ US Oil and Gas ETF, continues to show accumulation
  • FXF, although an Affirmed Long, is getting close to my buy zone and is continuing to show LEV accumulation despite the price dropping.
  • MZZ is the UltraShort MidCap ETF and LEV is holding steady (after increasing for past 3 days) despite the price dropping.
  • PZA, which is a insured muni fund, continues to go up in terms of LEV.
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Remember, you are responsible for your trading decisions, and I am not.  Please do your diligence and take ownership for your actions.

Regards,

pgd