Thursday, April 21, 2011

NOT All Indicators are Confirming LONG; We Need Followthrough

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Summary

  • Yesterday's (4/20) big move in the markets added 1.69% to the GGT price index on volume that was 3% above the 50d MA.  Given the state of lower volume being normal, this was a broad move with almost across the board participation.
  • ALL of the GGT price index slopes, 5d through 65d, are positive AND they are pointing upward.  This is bullish for stocks on the short-term and intermediate term.
  • My reward/risk tool, even with the large move on 4/20, is only at +6, which is suggesting more upside on a short-term basis.  Entering stocks on the long side should only be accomplished if they are breaking out with significant price and volume.
  • The Short-Term Long-Cash Ratio (LCR) Timer has moved LONG.  The tradeable VTI Timer, which is based on the ST-LCR Timer, is still in CASH.  This is a mixed message that needs to sort itself out.
  • My Elder Force Index Timer is MIXED.  The simple moving average (SMA) method of calculation is in CASH, the exponential moving average method is LONG.  IF YOU ARE CONSERVATIVE, then you want to pay attention to the SMA method.  If you are aggressive and nimble, then you want to pay attention to the EMA method.
  • Only the 5d and 8d slopes of the LCR are positive, the rest are negative.  This is NOT confirming an en masse jump into the market.  Given this, and supporting the bullish case for the aggressive investor, is that the slopes are all pointing upward, which is necessary for a bull to be sustained.
Conclusions for Thursday:  Futures are up as I write this, so we will open to the up side.  NOT ALL INDICATORS ARE CONFIRMING THIS BULL MOVE, so until they do, I will not commit monies to 100% positions.  25% trial-balloons are my focus.  Candidate stocks for review are below.

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GGT + Effective Volume Stocks

Given that the climate is supportive of long entry into stocks, the following is a list of stocks that I am screening.  The list below HAS NOT BEEN SCREENED for specific patterns of EV; it simply is a listing of the most favorable stocks in both the GGT and EV universe.



As with all my figures, right-click on the image to open in a new window or browser.  Stocks with a "New Long" or "Affirmed Long" recommendation, combined with "Buying Surges", are especially attractive.

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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