Summary:
  • The price slope model turned long on Friday with the day's action, and did so on really poor volume. We have the slopes of the slopes pointing up for the past 2 days, which is a start in the right direction. We're right at thresholds with the slopes (just above/below 0 line) so caution is advised at new long positions.
  • The day-over-day acceleration of the price slope model prices has stalled. Out of the last 4 trading days we've been stuck at a relative level of 55 on 3 of those days, showing us that we're not going up or down. BIG warning sign here.
  • The strength index moved up and is in a good range for picking up positions on the long side. This being said, we're back to ~0.5 range, which is in the center of the scale. If you must pick long positions make sure they have a high RS.
  • The LCR slope model continues to show bearishness across the board. Based on this, and my commentary below, new positions in longs are not advised.
  • The EV 20d MF indicator is barely positive and it too is sitting right at thresholds. Note that the 20d MF average is well above the indicator AND it has a negative slope -- not a great situation for new long positions.
  • The 5d/65d MA intermediate-termed timer is still long.
  • The Elder Intermediate-Termed Force Index timer has moved back to LONG mode. This was a clear whipsaw and is indicative of the stalling nature of prices.

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Before I jump into the standard presentation, I want to convey some work that I've done regarding using the LCR (Long-Cash Ratio) as a timer for when to buy stocks. I am not representing that this is a complete strategy, but in looking for an edge on when to buy stocks which are correlated with the GGT price index (closest ETF is the VTI, the Vanguard Total Index, R^2 = 0.972 since 9/08), this will be something that I'm implementing going forward.

Refer to the figure below. Right-click on the image to open in a new window or tab, as per usual.