Friday, February 4, 2011

Ho-Hum Jobs Report & Staying the Course

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I'm back in NoVA after spending the majority of the week in San Diego.  I apologize for the hiatus in blogging -- a combination of time zone shift, dinner/breakfast meetings, and simple fatigue precluded me from writing.  I'm in Ft. Worth next week Tu-Th, so more of the same ...

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The LCR System

The Long-Cash Ratio is a measure of the number of stocks in the database with a LONG rating compared to those with a CASH rating.  When we apply moving averages to this ratio, we can more easily see trends that we can't see with looking at the day-to-day values.  Here's the most recent table view, using moving averages from 5d to 65d:


The table on the left side of the figure is the most important for our purposes, as this shows the trend of the database behavior on multiple time frames.  What we see is bullish, specifically that we have a general "thawing of the bear ice" starting with the 5d EMA 3 days ago, followed by the 8d, and now with yesterday's action, a conversion of the 13d.  The next domino to fall will be the 21d, and as you can imagine, this probably won't come today unless we have a significant jump in the baseline of stocks from CASH to New Long.  Here at 10 a.m., after a ho-hum jobs report, I don't see it happening.

Today is probably not the day to jump back in if you've missed this trend over the past few days.  I say this because the right side of the table shows us the "slope of the slopes", and having 5 continuous up days on all measured time frames typically does not occur -- 4 days is the "long in the tooth signal" and I would expect (and welcome) a bit of database contraction before moving back into new positions or adding to positive positions.

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The Pricing System

Whereas the LCR system looks at the database universe as a group in rankings, the pricing system looks at the database universe in terms of average price.  The concept is the same though -- take various moving averages of the price series to get a view of the trend on multiple time frames:


The GGT pricing system is bullish, and it is telling us to stay on the long side (look at all the green on the left side of the table).  The 2d pullback in the slopes of the slopes of the pricing EMAs (right side of table) indicates a loss of momentum, and when combined with the LCR "slope of the slopes" being green for 4days running, which I stated above is a "long in the tooth" signal, I would anticipate further consolidation from here and perhaps a good area for entry of uptrending stocks that are pulling back a tad off their highs.

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GGT New Longs

Here are GGT New Longs that I am watching:

RLD
BTI
RIMM
RF
PPC
AZK
TD
EL
GRS
IFSIA
MHLD
DRRX
NTGR
BWP
CASY
LLY
AEO
CEVA
NWBI
R
SAH
OPTR
GCO
WRC
BJ

These are stocks that are experiencing Total Effective Volume or Large Effective Volume accumulation over the last 40 days as well as the last 8.  These are meeting criteria for entry according to GGT New Long (price and volume accumulation).

Do your diligence.

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Remember, you are responsible for your own decisions, and I am not.  Please read the disclaimer at the top of this blog -- continued following of my ramblings implies that you have read and understand the recommendations stated herein.

Regards,

pgd

Position disclaimer.  As of this writing, I own or influence positions in the following equities:  AAPL, BGU, BTI, DAG, DIG, ERX, FAS, HPQ, HSFT, HSY, IEO, IEZ, IM, IYE, JJC, LULU, MVV, PALL, PAQ, RJA, RSX, SCOK, SDS, SOXL, SSO, TGT, TWM, UPRO, UYG, UYM, VDE, VIT, XHB, XLE, XME, XOP.