Friday, April 27, 2012

Update for Friday, April 27th -- Elder Force Index Timer Confirms LONG

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With the close of markets on Thursday, April 26, my Elder Force Index Timer has confirmed a move to the Long side:






The hold out here was that I use two methods -- a slower simple moving average (SMA or MA) and a faster exponential moving average (EMA) to calculate the Force Index (price change * volume). Both are positive on a 13d average, so we have confirmation. 

Shorting stocks (or Contra ETFs) at this point in the market is a low-probability proposition at best. This is an intermediate-termed timer and with the long-term timer (13d / 65d crossing), the direction is up from here.






As you can see, all of my primary timer systems are long.

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The combined timer historically has kept us on the right side of the market:










If you have a long(er) term view, this could be a viable methodology to know whether you should be in the markets or out. I'm targeting "in" right now with a core position in IWM.

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If you read my entry yesterday on my GGT blog, you know that I was going long in IWM.

I didn't get into IWM for a couple of reasons, all mechanical. To wit:

1) I set a limit order at the previous day's close (80.94)
2) I set a timed delay (active @ 9:35 a.m.) to allow the overnight book to clear. The markets opened below the close, moved down, and by 9:35, were above my limit. They never looked back.
3) I was away from my PC so couldn't monitor that this was occurring, or I would have attempted to get in by 10:30.
4) Lunchtime is typically weak, but not yesterday. Hence, my VWAP entry never executed.

I'm still largely in cash, with a GTC limit order at 80.94 still pending. Futures are up as I write so I need to get on the bus or risk being locked out of this entry. Shoot. I hate chasing.

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Shameless plug:

I will be away from my PC most of today and all weekend. I am riding over 100+ miles this weekend with disabled veterans from the Pentagon to Gettysburg, PA. Read about it here: 

http://worldteamsports.org/ 

Please read my personal fund-raising page here: http://goo.gl/4rXRW, and if you are so inclined, please contribute to this cause. We, in America (and all around the globe -- I am a verteran and was stationed overseas), benefit from these sacrifices and this is a good cause.

Regards,

pgd