Wednesday, December 26, 2012

Short-term Timer has Transitioned to Cash

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With the close of the shortened trading day on 12/24 the GGT timer system has indicated the closing of one of three of the timers, e.g., it has transitioned to CASH.  Many of the trades taken since 12/17/12 are mostly underwater, and as such, I intend to close all trades initiated since this time.



For the period 12/17/12 (close) to 12/24/12 (close) the GGT price index was up +0.54%.  Actual mileage may vary.

The short-term 4d LCR timer is simply this -- it is LONG when the daily long-cash ratio (LCR) is above the 4d simple moving average (SMA or MA), and it is in CASH when it is below.  With the Elder Intermediate-termed timer still long on 12/24, and the shortened trading day with next-to-nothing volume, I wasn't too worried about the short-term CASH signal.  With the action today (12/26) the signal has been confirmed, and further, the Elder timer is considerably weaker:


Of concern to me is that the slope of the 13d EMA of the GGT Index has now gone negative at a fairly fast rate -- the fastest in the last month.  It's losing -$0.02 per day right now, and this is a good clip downward.  Note that the 34d EMA is still positive but is getting weaker.  With all other Elder indicators red or mixed, it will not take much in this market to turn the intermediate timer negative.

The price slope model has been growing bearish on a short-term basis -- but is still relatively "healthy" on a longer-termed basis.  Again, I watch the slope of the 65d EMA of the GGT index, and it is positive by a penny:



Right-click on the image to open in a new tab or window.

Of significance here is that we have a considerable amount of "red", or negative acceleration on the right hand side of the table, showing that we're still dropping day-over-day.  I'd like to see some green on the right side of the table, and since the numbers on 12/26 are fairly negative, it looks like we could continue on the downward pricing path.

I'm not buying any stocks at the present time, and am looking to sell everything that has poor effective volume (www.effectivevolume.com)


Right-click on the image to open in a new tab or window.

The table above is the Long-Cash Ratio (LCR) slope model, and it is less susceptible to market gyrations because it requires volume, price, and price rate of change information before it changes state (unlike the price slope model which just requires price).  The canary in the coal mine is the 13d slope of the LCR -- it's almost 0.00, and if it goes negative the weakness of the 12/14 low will be broken.  Not a good intermediate sign.

Further, if you look on the right of the LCR slope table you see the accelerations of the LCR index, and they have been accelerating to the negative.  Not good -- the database is contracting faster day-over-day, and this means money is flowing out of the markets.  I use the 20d money flow indicator to see how rapid money has been moving around (www.effectivevolume.com):


The last three days have been a net loss, although not as severe as you may think -- less money is flowing in, but the net flow inward is still positive on a day-over-day basis, just less positive.

Seems that the markets are in auto-pilot mode until the fiscal curb is resolved.

As more signals develop I'll post, but for now, be aware that we are weak on the short-term, the intermediate term is under severe pressure, and the longer-term is growing weaker but is still positive.

Remember, you are responsible for your own investment decisions, and I am not.  Please do your diligence, and please take ownership for your actions.

Regards,

pgd