Wednesday, September 5, 2012

Update for Wednesday, September 5th -- GGT Combo Timer Issues Long Signal

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With the close of markets on Tuesday, Sept 4th, the GGT combo timer has issued a long call (right click on the image to open in a new tab or window):



Positive attributes are that we are

1) above the GGT 200d simple moving average (long-term up trend)
2) positive slope on the 65d SMA (not shown, but also a long-term up trend).
3) volume was the strongest in some time, appearing at -4% below the 50d MA of volume (folks are returning back from vacation, e.g., there are buyers and sellers)

Statistically, the signal has a positive expectation:



These stats are calculated using the GGT index, which looks very much like the ETFs VTI or IWM, depending upon market conditions. Right now the IWM most closely resembles the GGT index on a 34d, 65d, and 100d look back review, so I will consider moving into IWM based on these stats.

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The GGT Price Slope Model is fully bullish, with two major price accelerations over the past two days (right click on the image to open in a new tab or window):



Note that the database strength index, which is a composite value made up of price, volume, and price rate of change, has moved up quickly from 0.46 to 0.64, and while it may pull back a bit, has considerable room to move upward. The fact that the 65d slope on price is positive and the latest round of negative slopes on shorter time frames did not extend to the longer time frames tells me that the trend is intact.

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The GGT LCR Slope Model has a wrinkle in it, but only slightly at the 13d level (right click on the image to open in a new tab or window):



Again, the 2-day acceleration in LCR gives me some confidence, and the fact that all slopes except the 13d are positive also gives me confidence at the longer-termed trend.

I note that the 4% and 10% gains of the LCR over the past two days are not "knock the skin off the ball" gains (I would have rather seen some massive volume and movement in the entire database), so we certainly can test the trend. I intend to buy small positions on pullbacks and reversals upward.

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With respect to entering a core IWM position, the money management looks like this:




There was some accumulation in IWM during the afternoon trading session yesterday, so some big boys have left footprints (right click on the image to open in a new tab or window):




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Make it a great day! I am traveling tonight and tomorrow and will post as time allows. With respect to signals, obviously, you are responsible for your own trades and are obligated to do your own diligence. Please take ownership for your actions.

Regards,

pgd