- Macro Indicator: the GGT database is expanding in the number of stocks with a LONG status. This means that more stocks are appreciating and seeing increased volume than those that are decreasing in price. This is bullish (a rising tide lifts all boats).
- Macro Indicator: the Elder 13d Force Index (FI) system, as applied to the GGT universe, is bullish and at the present daily rate of change, is about 6 days away from any form of sell signal. The probability of a sustained down leg is smaller than the probability of a continued up leg, so we are carefully bullish.
- Due to personal events and subsequent travel, I liquidated a large portion of my short-termed holdings last Wednesday because I was unable to attend to them Wednesday, Thursday, or Friday, and the uncertainty of world events made holding them over the weekend dangerous. I'll be moving back into selected positions as the week unfolds, provided that the markets do not dive from their lofty levels.
- The GGT Price Accumulator Change tool is mid-scale/neutral at a value of 0, which is neither oversold nor overbought. Risk/reward is literally a 50/50 coin toss from here, compared to past buying opportunities. This means that we can buy stocks here with a reasonable expectation of them going either up or down (as opposed to buying when they are oversold). Of course, we must be selective, and we must watch where the money is flowing.
GGT New Longs - ETFs
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I want to highlight a GGT New Long, as the timing here is important:
- GLD is the most liquid of the New Longs, and reflects continued buying into the equity over the past week or so. Note that acquisition volume was large on Friday in GLD, which is important. I also note that GLD is 0.8% over my buy limit, so I'd like to see it come back a bit. The question is whether we should be considering precious metals at this point in time.
- the slope of the 20d average of money flow into the PM sector is positive, which means that day-over-day, more money is flowing into the sector as a whole that was yesterday.
- the 20d average of money flow (MF) just moved above the 0 line -- the bleeding has stopped and the PM MF is a net inflow. This is good in general for precious metal stocks, and we can conclude that this sector is expanding
- The percentage of MF into this sector is pointing upward, parallel to the 20d average. The conclusion is that both are increasing, which is bullish for this sector.
- the 20d TEV average line is pointing upward -- this is bullish
- the TEV level is above the 20d TEV average, which is bullish
- both lines are becoming less negative in volume of shares/day, which is bullish.
- UXG - saw a massive amount of buying on Friday, but has been in a general LEV down trend for the past few days. The risk/reward ratio, as determined by the active boundary (AB) calculation, is very good.
- AZK - lumpy LEV pattern, but clearly has been experiencing some short-term accumulation.
- GOLD - new LEV accumulation pattern that meets my 3-day criteria.
- HMY - new LEV accumulation pattern that meets my 3-day criteria.
- GFI -- has a nice lower-left/upper-right short term LEV accumulation pattern, and the AB reward/risk ratio is in my sweet zone.
- EEB -- this is a BRIC ETF, and while not a stellar performer, it certainly is showing accumulation over the last week. Note that the BRICs have been out of favor in general, so this could be the start of a new up leg.
- MINT -- this is the PIMCO Enhanced Short Maturity Strategy Fund, and has been seeing some solid accumulation over the last few days, as well as the corresponding price performance. As a fund we have to be careful, as the price is not tied to the movement of volume, but TEV attractiveness is important as it shows the money flow.
I want to present another chart which shows that market sentiment is tiring as far as this bull is concerned, and we are seeing an increase in expectation of a downtrend:
This chart is another ratiometric chart that places the mid-term futures (VXZ) against the short-term futures (VXX). The short-term futures value is located in the denominator, so as it grows larger, we see that the ratio gets smaller, creating the toppiness. What is important to me is the diving of the slope of the 34d EMA of this ratio -- you can see this on the bottom of the panel.
What should be evident to you is that short-termed expectations are becoming more bearish at a rate faster than longer-termed expectations, and this indicator alone shows that we are below the levels that we experienced in late August. This is noteworthy, and is indicative of what we are seeing in the options market (as well as the equity market). Play this accordingly.