Sunday, January 6, 2013

Weekend Update -- Looking at Monday, January 7th

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I'm presently nearly fully in the market at the present time.  I hold the following stocks, all with gains except for CVLT, which is being stubborn with a loss just over 1%:

ASGN
CTB
CVI
CVLT
DDD
DORM
EGHT
GEL
KKD
LAD
MTZ
NDSN
PII
SCS
TDG
VMED
VPFG
WGO

I have room to add two or three more, but may simply sell the weaker performers and add to my leaders as the list is getting almost too big to manage.

My leaders list for the upcoming week is as follows:


EXP
SWI
LAD
VMED
ASGN
HW
KKD
GHL
ONXX
ALJ
CVLT
DSW
PBH
RAX
VPFG
BRLI
MDAS
MTZ
TCBI
TOL
WAL
CTB
AHS
MOV
USG
SPNC
CAMP
COG
ARMH
CXW
CPA
LGND
IPGP
APOG
CVI
PDFS
PIKE
DDD
DK
HBI
HFC
HVT
VVI
DORM
BBSI
BOFI
CRD.B
LEDR
LNDC
PRAA
USAT

The order is implied "most favorable effective volume setup to least", and is of my own design and analysis.  This means that EXP and SWI ... are exhibiting some setups in effective volume that are favorable to their longer-termed appreciation.  If you are so inclined EGHT, PIR, EXP and SWI all have the "same" internal score, and if you have the TradeStation EV plugin (or are a member of www.effectivevolume.com) you can look at the large effective volume levels for the past 5d, 10d, 15d, and 20d intervals and you'll see what I mean.

For those of you familiar with my screening criteria, we have a sea of green:



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

From a performance point of view, these stocks are firing on all cylinders in one form or another:



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

Of interest to me is that we keep powering higher on the MACD, as well as the overall slopes of the 13d and 34d EMA on the group (MACD/upper, SLOPES/middle of figure).  See how the slopes are fully positive?  All that is changing with respect to the slopes is the value above 0 -- sometimes the wave is growing (increasing acceleration) and sometimes it starts to dip down (deceleration).  

Note too that the group price consistently performs at or above the 20d MA, which itself has a significant upward-trending slope.  

For you Elder types, note that the Bull and Bear Power are both significantly positive, hence, the group has great characteristics, and has had since we initiated a long call back in November.

If you have a basket of stocks you are watching, and they aren't performing like this, then I would suggest that you reevaluate your stock selection.

In case you are wondering, I like to buy when the 13d slope has hit a minimum and the next day has a higher value.  This is the RED trace in the SLOPE graph.  We're peaking in terms of the 13d, so entering new positions right now is tenuous and highly specific on the individual equity being considered.

All my timers are LONG:


The short-term timer signaled to re-enter the markets with the close of action on Wednesday, January 2nd.  I was already holding stocks long due to the intermediate and long-term timers staying on the long side (intermediate by a thread), and that has paid off.  The intermediate-termed timer moved long on 11/28 after 4 consecutive days of "mixed" mode -- e.g., weak market behavior.  We received a long-term confirmation on 11/30 and although we've tested the short and intermediate timers, we've not been close to moving short again.

Looking forward into the crystal ball for the week, I see nothing but a cloudy crystal ball.  Guess I'll let the individual stocks tell me what to do, and for this I use my GGT timer system:


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

Note that most of these have already fired long (as evidenced by the green), so new entry pickings are few and far between (risk/reward is relatively poor compared to the day that they changed from red to green).  This being said, my strategy for entry is to carefully watch for those stocks which meet Elder entry criteria.  Stocks setup for this to occur on Monday are as follows:



Note my Elder entry criteria is as follows:
  1. We must be in an uptrend.  Your tolerance for risk decides the time frame of the uptrend.  Right now all my measured time frames are LONG so market risk is low.
  2. The equity's 13d EMA slope must be positive.  This is the first (leftmost) column indicated above, and DK, HFC, and LGND do NOT meet this criteria.
  3. The equity's 34d EMA slope must be positive.  This is the second column indicated above.  All the stocks in the table meet this criteria.
  4. The 2d EMA of the Force Index (daily price change * volume) must be NEGATIVE.  Yes, NEGATIVE.
  5. The 13d EMA of the Force Index must be POSITIVE.
If all of these conditions are true we'll see a "TRUE" in the "Ready" column (second from the right).

So, take APOG, since it's first on the list.  Friday's close was $24.17 and the high was $24.39.  Given that we're later in this bull cycle I want to see some strength here, so I'd place a BUY STOP for $24.39 + $0.02 = $24.41 for entry on Monday, expire END OF DAY.  Do not enable for pre/post markets, as price swings can trigger you and the price can drop at the open.  If the price moves above $24.41 we'll execute at the ask, and we're in.  If price never hits $24.41 AND all the conditions are the same on Monday night, then I'll lower my BUY STOP for Tuesday and play the same game until either:

1) conditions change and the stock is no longer a leader nor is it meeting Elder criteria, or 
2) my short-term timer moves to CASH, indicating that I should not buy stocks right now.

Of course, how you play this is entirely up to you.

As with all my ramblings, you are responsible to do your own diligence, and I am not.  I am not recommending anything you read here -- I am only conveying what works for me at the present time.  Do your own diligence, take ownership for your actions, and of course, let me know if this works for you.

Regards,

pgd