Thursday, April 5, 2012

Update for Thursday, April 5th - Elder Intermediate Timer Signals Cash

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I blog daily at www.effectivevolume.com; please register and follow me there if you want daily commentary.  I generally make time to blog here only if I get a transition in one of my measurement/timer systems.

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With the close of markets on Wednesday, April 4th, the Elder Intermediate-termed timer has transitioned to cash. This is a trigger event to sell long-term holdings, and I will do so at the open.






Shorter-termed holdings should be looked at very carefully for exiting. Longer-termed holdings, such at those purchased around January 5th and which have a solid gain, are probably safe but my models give no further selling guidance beyond what I'm posting today and history has shown that waiting for the 13d/65d model to transition to cash on it's own is generally a "give back solid gains" decision. I'm moving to cash and waiting for the next entry signal.

The latest entry the morning of 3/13 resulted in a net +0.63% gain overall to the combined 13d/65d model:




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Note that ME has dropped a bit due to the smaller gain but PRR has increased, giving me further confidence at this approach.

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The price slope model is mildly bearish/bullish, with a few of the shorter termed slopes below 0 and the remainder above 0. This is mixed and the bulls/bears are fighting the battles on above-average volume:







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The LCR slope model is completely bearish and is telling us not to enter stocks on the long side.







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Of interest to me is that there is some life left in the long-term timer before it crosses into bear land:








Note the distance between the end of yesterday's signal and the 0 line. Barring a major collapse of the markets, the long-term timer should remain long, indicating that long-term positions can continued to be held.

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When I calculated net Effective Volume divergence this morning I was surprised at the apparent amount of net inflow into equities. There are far more stocks that are attracting money on decreasing prices than the converse, and this leads to the conclusion that this dip is being bought:






Time will tell whether this is the correct interpretation.

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I'll be away from my desk most of the trading day today.

Regards,

pgd