Sunday, December 21, 2014

Moving Long as of Close of Markets on 12-19

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Timer Table:


The timer table indicates a short-term entry signal for Friday, and while this was valid, it was not strong and I chose not to get aggressive with it.  Friday's action though pushed all the timers to the long side, which is bullish.

Notable here is that the long-term timer, the right column in the table, only spent 3 days in Cash.  This has never happened in the past, with the historical average length of this being nearly one month and the shortest time in Cash being 8 days.  3 days in Cash is a new record.

LCR Slopes


The LCR slope transition of the 8d to green (Long) is what has triggered entry on Monday.  This is a high probability entry, so pay attention.

Note that the LCR ranking on Friday was the 65 strongest 1-day jump relative to all the positive moves since 9/11/2008,  Again, strong, so pay attention.  I think this was more than just short covering or options expirations day.

Cumulative Tick


For those of you who follow me regularly, you know I watch the preceding figure very closely.

We're still early in this effort, and the number of 52 week New Highs, as shown at the very top right of the figure, is barely above the number of 52 week new Lows on the NYSE.  This is NOT ideal, and does not support the huge moves we had during the week.  Nevertheless, I don't look at the value, just whether the 52NH is > 52NL, and it is, so we're good.

Mid-day on Friday the buying algos started kicking in in terms of bid/ask on the next transaction. Prices moved up constantly and consistently until just late in the day, which is bullish.

Finally, as far as the cumulative tick is concerned, "white above red" and all the slopes are positive on all measured time frames.  As long as this holds I'm a buyer in this market.

Strategy:

The obvious question is what to buy?

Here are my Greenfield Leaders and Greenfield Bargains:


All of these are good stocks, and the Greenfield Bargains at the bottom all have solid fundamentals but are beaten down quite a bit.

Here is the list to save you time from copying the list:

~Greenfield Longs
AAPL
AFSI
AMBA
ANIP
BFR
BIDU
BMA
CARB
CAVM
CORE
CSCD
DXCM
ECHO
ENPH
EPAM
ISIG
LEAF
LTS
MDXG
NKTR
NOAH
PLNR
RCL
RFMD
SAIA
SAVE
SMCI
SWKS
UA
UAL
UEIC
UVE
ZUMZ

~Greenfield Bargains
APOG
APT
BITA
EVLV
FLTX
HDB
HSTM
ICLR
LCI
LXFT
PACB
RENT
SANM
SKX
VEEV
VIPS

There are a lot of stocks there, probably more than you want to choose.

What I do in this case is find the mixture that optimizes the efficient frontier.  That list is as follows:

AAPL 37.96%
BMA 11.42%
LEAF 9.56%
DXCM 5.83%
LTS 5.66%
BIDU 5.28%
RCL 4.83%
SMCI 3.75%
MDXG 3.70%
UAL 3.45%
ECHO 2.42%
SWKS 2.36%
NKTR 1.77%
SAVE 1.59%
UA 0.42%
An expectation for these stocks, based on the last 100 days of performance (or so), yields an estimated 3.5% better than holding just the SPY but at an increased volatility. Whether you choose to do this is up to you.

Further to this, note that not all of these stocks are rated "GGT Long".  Hence, they don't get my money:

AAPL Long
BMA Aff. Long
LEAF Aff. Long
DXCM Aff. Long
LTS Long
BIDU Long
RCL Long
SMCI Aff. Long
MDXG Aff. Long
UAL Long
ECHO Long
SWKS Aff. Long
NKTR Cash
SAVE Cash
UA Long
Hence, NKTR and SAVE will have to wait.

My buying on Monday is simple.  Buy at the allocations above, using the HIGH of the value on Friday plus another 0.1%.  So, I take the high price, multiply it by 1.001, and that becomes my new buying threshold.  I buy using a Good Til Canceled order, and I adjust the price downward for the GGT LONG-rated stocks (in green above) if they do not fill on the order day.  As long as they are green, they will eventually fill.

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As with all my ramblings, you are responsible for your own investment decisions and I am not.  Please do your own diligence, and please take ownership for your actions.

Regards,

pgd



Tuesday, December 16, 2014

All Timers Signal Cash - Dec 16 Close

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With the close of markets today (Dec 16) all my timers -- short, medium, and long-term, are now indicating cash.

I'm liquidating all remaining positions with a 1% TSL, GTC.

Buy Strength:


Buy Strength, as shown above, is very, very negative and as you can see, is entering a historic period of being oversold.  It could rocket upwards quickly, or it could linger in this area longer.  Buy Strength is an internal indicator that I do not discuss much as it's derived from a number of parameters unique to the GGT system of ranking stocks.  There is no equivalent metric on the "outside world" so I don't talk about it much (if at all).  Nevertheless, I watch it, and I watch it daily.  Right now it's telling me we could be oversold -- certainly more chance of going upwards than going drastically downward from here.

Remember though - we could linger and churn.

Cumulative Tick:


No matter how you look at it, there is nothing in the CT chart above that is positive.  Nothing.  I've been saying this for some time, so if this blog entry surprises you, then you've not been paying attention.

LCR Slope Table


The LCR is below 1.0, meaning out of 3000+ stocks in the database, we have more that are ranked as CASH than LONG.  This is a good reset for the next leg up.

The slopes of all measured time frames (left side) are negative.  They've been negative for some time, and this means you should not be buying stocks.  Period.  No argument.  We could go lower from here.

The right side of the table is the rate of change of the slopes.  We're seeing some abatement on the shortest of time frames, so PERHAPS (and only perhaps) we're approaching a turning point.  It won't be Wednesday, so Thursday would be the earliest to consider.

I'm looking for the 2d, 3d, and 5d slopes on the left to turn positive before I buy.

Strategy

Out of the market.  No telling how long this will last -- 1 day, 2 days, or 2 weeks.  Cheap oil this fast isn't good, and until that clears, we're going to put pressure on equities.  From my chair, best to do this from the sidelines.

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

Regards,

pgd



Tuesday, December 9, 2014

Target Cash Level to 67% as of close of Monday, Dec 8

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Summary:  Continually eroding of the indicators show that raising cash is required.  The greatest short-term worry is the ongoing cumulative tick indicators -- we're continuing to see more transactions end with a lower price, which means the big boys and girls are selling large positions.

Timer Table: A look back 3 months for perspective:


The only "long" timer is the long-term timer, which actually is converging to also go negative if the present market trend remains down.

You can see that even though we had a entry signal Friday (12/5), it was negated with the "Avoid8d" indicator, showing that historically, the signal is prone to failure.  I had already posted about this same type of warning around the 11/21 and 11/24 timeframe so I didn't report on the change.

The bottom line is that I believe that this cycle is weak, and has been since around 11/13, so I'm not inclined to do much in the markets except cash in on profits.

LCR Slope Table:

The Long-Cash Ratio continues to fall, and is now at 1.008.  This means that for every 1008 stocks that are rated long, there are 1000 are rated in cash recommended.  The trend is down, and has been for a week.

Short-term, we're resetting.  As long as the longer-termed slopes remain green (65d, 88d, 143d) we will not be experiencing a full reset, and consequently, the ability to start a new cycle will be limited.

Cumulative Tick:



The number of 52-week new lows exceeded the number of 52-week new highs.  This is inverse of what I want when I am buying stocks.

Around mid-day the selling algos kicked in.  For over an hour we were experiencing greater then 500 stock transactions / min that were ending on a down tick, meaning that there was more supply than buyers (on the NYSE).  This is indicative of unwinding larger positions in a controlled and steady manner.

Finally, the cumulative tick line (white) is well below the cumulative tick moving average (red), and the CT ribbon has negative slopes, indicating that the trend is down in buying and selling. I don't buy stocks when white is below red, and we're failing to move higher on any measured time frame.

Strategy:

I'm raising cash.  I'm selling my weaker positions first, with a target to 33% equity and 67% cash.  My selling is simple -- a 1% trailing stop loss that activates after 9:45 a.m., good til canceled (GTC).

If the rout continues today I may unwind all my positions simply to lock in gains.  This latter statement is in conflict with my trading rules they say I should keep equity in the market, but I also want to protect my gains and not see winning positions turn into losing positions.  My remaining holdings have a high beta (AAPL, AFSI, EW, JBLU, JKHY, LKQ) and they can go down quickly.

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

Thursday, December 4, 2014

Timers Whipsaw - as of close of Dec 3

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A short note here; no action required.

With the close of markets on December 3 the markets have caused most of my indicators to move to the long side.  The back-forth nature of this is called a whipsaw and it occurs when we are right at the margins.


The slopes of the long-cash ratio (LCR) moving averages are quite mixed.  We're back to the scenario that I discussed a few blogs ago -- the mixed nature of the LCR slopes is not considered "clean" by my system and consequently, is not a solid buy (or sell) signal.

On a positive (long) side, the LCR value is moving back up, indicating that stocks are flipping to the "New Long" side on a day-over-day basis.  This means PRICE, VOLUME, and RATE OF CHANGE OF PRICE are all favorable.  This is necessary for a solid buy signal.

Here, "solid buy" means more green on the left side of the table.  I'd like to see ALL the LCR moving averages flip to green/positive in one day, but certainly, will consider the 5d and 8d moving positive, as these are generally key entry points in the market.  This being said, the "green" at the 55d, 65d, and beyond tells me that this is a mature market, so rocketing off to the moon from here is highly unlikely.

Strategy

I'm presently sitting about 40% invested in the markets.  The ideal target is 50%.  I'm not a buyer today; 1) I'm on travel and have client responsibilities, and 2) 4 out of 5 times, when backtested, entry at this point has failed in the past (as measured to the next down signal).  The risk/reward isn't there for me until we start seeing solid positive slopes on the left side of the table.

I've removed all pending sell orders on all accounts.  This will keep me at 40% invested.

Regards,

pgd


Monday, December 1, 2014

Intermediate-Term Timer Moves to Cash -- as of Dec 1st Close

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<============  Please subscribe for notifications of updates to this blog using the link to the left.  You won't be spammed and nobody except me has access to your email address.

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Summary:  The markets continued to sell off today, not so much in the major indexes, but certainly in the number of stocks dropping in price and triggering "New Cash" recommendations.  This has caused the Intermediate-Term timer to move to CASH, and this tells me to have no more than 50% equity in the markets.

Timer Table:




Short-term timer:  CASH
Intermediate-term timer:  NEW CASH, as of today.
Long-term timer:  LONG
Long-Cash Ratio:  1.039.  For every 1039 stocks that are rated LONG, 1000 are rated CASH.  The trend is DOWN.
Percentage Stocks that are LONG within the database:  51.0%, down 4.2% today and down 8.2% over the past two days.  This is a big move.

The table above tells me that an index position, opened at the start of 11/24, and closed on 11/28 would have resulted in a loss of 0.94%.  The longer intermediate-termed signal, which started on 10/21, saw an index gain of +2.59%.  Note that both of these numbers are with the GGT index, which is not tradeable, but is closely related to the ETF "IWM" (Russell 2000 small cap) and the ETF SPY (S&P 500).

Slope Table:



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

Red on the left indicates that all the slopes of the long-cash ratios are down.  Red on the right indicates that acceleration is negative, relative to the previous day's slope.  Red on the right is bad, and it leads directly to red on the left.

Red on the left is what triggers me to get out of the markets, and today was one of those triggers.

Until we see green on the right, I'm starting to raise more cash.

Cumulative Tick



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

There are a number of things wrong on a daily time scale with the CT figure above.  First, the number of 52week New Lows is greater than the number of 52 week New Highs, at least on the NYSE.  This is bad, and I do not buy stocks when this occurs.  Hence, I've canceled all open buy orders.

Today started off with some selling, which eased a bit, then we started to run into the end of the day with another sell off.  The white instantaneous CT line finished at the daily low, and this is not good.  Furthermore, it is below the solid red line, which is a slow, multi-day CT average.  I don't buy stocks when the white is below red, ("you're dead" for you naval aviators), so again, if the 52w NHNL wasn't enough to get you to cancel your buy orders, then this should be.

Strategy:

I'm raising cash.  My target with the short-term and intermediate-term timers on the CASH side are 50%, but I'll go as low as 33%.  Hence, I'll be happy to settle between these two values.  I'm at about 41% as I write this.

I'm unloading all my leveraged ETFs.  If you look at the CT figure, at the top, you see what I'm holding.  QLD, SSO, and TQQQ are gone soon if the downtrend continues.  I unload using a 1% trailing stop loss (TSL), placed to activate at 9:45 a.m., Good-'til-canceled (GTC).

I'm unloading all my underwater positions.  Hence, XLF and XLI are to be unloaded using the same method as just described.

I still have about a 4% unrealized gain in the accounts in the other positions and will hold onto those as long as the signals show we're stabilizing.  If the long-term timer flips you'll know about it, and that will be my signal to move to the sidelines.  We're not there yet, but we could be if we have a few more ugly days.

No buying until we get a reversal that is supported by the slope table.  I'm traveling Tuesday and will be in Austin, TX for the rest of the week so it will be good to be on autopilot for the next few days.

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

Regards,

pgd

Targeting 25 Percent Cash, November 28 Close

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Summary:  The short-term timer has reverted back to CASH, indicating that I need to target 25% cash and 75% equity.  I'm well below this level, so I'm cancelling pending buy orders so that my overall invested amount does not exceed 75%.

Timer Status:

Short-Term Timer:  New Cash status as of close of November 28
Intermediate-Term Timer:  Long
Long-Term Timer:  Long
Long-Cash Ratio:  Fell -20% on 11/28 to close at 1.233.  For every 1000 stocks recommended as CASH, 1233 are recommended LONG, but the trend is downward.
Percentage of Stocks with a LONG recommendation:  55.2%, fell -4.7% on 11/28.

If you scroll back a few blogs, I indicated that I was not overly confident in this signal.  Historically, only 1 in 5 signals at this point in the cycle have succeeded.  This does not appear to be one of the success stories.

Slope Table:


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

Independent of Friday being a short trading day, it is clear to me that there was considerable profit taking.  The LCR drop of over -20% in one day was significant, and the reversion of the 2d, 3d, 5d, 8d, 13d, and 21d LCR slopes to a negative (downward) trend is troublesome for bulls.

I do not buy stocks en masse when the LCR is falling, so I'm taking orders off the table.  The first to come off are my stock orders, as they tend to have a higher beta.  Next are the higher beta ETFs.

Cumulative Tick


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

This is the standard cumulative tick window.  Noteable is simply that the end of the trading day on Friday was characterized by significant selling as the bell time approached.  I think most traders did not want to hold across the weekend.  If the white line drops below the red line I'll remove all pending buy orders in all accounts.

Strategy

I have updated the Dropbox stock and ETF files for the most attractive stocks, as well as many of the portfolios that I'm running.  If you are not reviewing these files then you probably should be.  If you do not have access to these files send me a private email to p d u n c a n [ a T } v t  {dot] e d u  (fix the address, of course) with the word "DROPBOX" in the subject and I'll send you an invite.

The reversion of the system from all timers "long" to the short-term timer now indicating "cash" moves my equity target to 25% on a short term basis. Note that this is a SHORT TERM target.  I was originally at 50%, and was driving to 100% equity, but the signal turned south with a number of orders pending.

To get to the 75% level I'm removing all my stock orders.  Most have a beta much higher than 1.0 and are not worth holding at this level.

After I do this my orders, if all were executed, are at about 66% equity.  If I were above 75% I'd start killing the pending orders for ETFs that have a higher volatility and beta than the market, e.g. 2x and 3x leveraged ETFs.  I'm not in that situation right now, but in general, that's how the rules work.

Updated Greenfield Leaders, Greenfield Bargains, Greenfield Dividends, and Dividend Champion lists are in the Dropbox.  I'm not buying any of these positions, but with a market potentially on the rise in December, I'll jump back in as soon as the short-term timer moves long.

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I'll be in Austin, TX this week and the week of the 15th -- let me know if you want to get together.

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

Regards,

pgd


Monday, November 24, 2014

Buy Signal Confirmed, 100% Equity Target. Nov 24 Close

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Summary: All moving averages of the Long-Cash Ratio are now positive.  The slopes of the averages are also positive.  The Cumulative Tick has moved above it's longest moving average.  Not a perfect set of signals, but good enough to remove all money management governors.  Backtesting suggests that this signal will fail, but we don't live in the past.  "To the moon ..."

Charts

For those of you who follow my ramblings, I'm simply going to post the next two charts as justification as a change in my position from yesterday.  Contact me via the comments section if you have questions.  Effectively, everything that was giving me pause yesterday has cleared itself.

NOTE that backtesting shows that this type of setup of signals is prone to failure.  That fact has not changed -- that is simply the setup.  How we got here is weak when we considered past "like" events, so, caution is advised.




Strategy

I'll cancel any open orders if the white Cumulative Tick line above drops below the red Cumulative Tick average.

I'm going to start getting back into the market with my ETF portfolios.  The two that appear to be performing well are my Leveraged SP500 and SPDR portfolios.  Allocations are as follows:

SPDR Portfolio:

XLK 20.89%
XLF 17.17%
XLV 13.11%
XLY 11.36%
XLP 11.29%
XLI 10.56%
XLE 9.65%
XLB 2.69%
XLU 2.66%
XPH 0.33%
XSD 0.29%

Leveraged S&P 500 Portfolio:

UPRO 46.53%
SPY 36.01%
SSO 15.26%
IWM 2.20%
My entry into these positions is at the allocations shown.  I only buy strength.  The entry price will be 1.001 above the high of the day.  Hence, if the high was $100, then the entry price is $100.10 for tomorrow.

The order will be a BUY STOP, GTC, effective after 9:45 a.m.

In addition to the list from yesterday, the following stocks should be added to the buy list:



Note that USNA is to be removed from the list.

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As with all my ramblings, 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

Sunday, November 23, 2014

Potential Buy Signal - History Says Avoid. Close of Nov 21

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Overview:  The Long-Cash Ratio of 3000 stocks is reversing to a buy status, but history says to avoid this signal as it generally fails.  Holding at 50% equity invested at the present time.

Timer Status:

Short-term Timer:  New Long as of November 21 close
Intermediate-term Timer:  LONG
Long-term Timer:  LONG
Long-Cash Ratio:  Rising 8% from 1.249 to 1.346, indicating that for every 1346 stocks that are rated "LONG", there are 1000 that are rated CASH.  We have been rising two days only.
Percent stocks that are rated long:  57.4%, up 1.9% over Thursday

Here is the Timer Table:


Note the "Avoid Adding to Posn" recommendation.  This stems from backtesting this system over the past 8 years, and when this condition has occurred in the past, the GGT index has only risen in one out of five times, or about 21% or less.  Buying stocks with these conditions is prone to failure 79% of the time.

Slope Table:


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

The left side of the slope table shows that we've had two consecutive days of the Long-Cash Ratio (LCR) moving upward.  This has caused the 2d and 3d moving averages to develop a positive slope, as indicated on the left.  Note that the 5d, 8d, and 13d are still negative, although the transition of the 21d from RED to GREEN is a move in the right direction.

Note on the far left that all the slopes of the slopes, or accelerations, are positive.  This is good, and we need more green on the right in order to turn the left side of the table green.

It's prudent to get a shopping list together, but it is not prudent to move into the market at this time.

Cumulative Tick

The markets have been struggling the past week:


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

Friday's buying/selling activity did not match up with the performance of the major indexes.  At (1) you can see that the market actually started to sell off, and it sold off most of the day.  (2) is ominous because the moving average ribbon began to invert -- the shortest period moving averages moved from the top of the graph to the bottom, which is not good.  Selling was abated later in the afternoon, at (3), but you can see that net-net, we were far below where we started the day.

This is not a robust bull market, and re-entry on Monday is ill-advised, especially with the instantaneous white trace below the longest-period moving average (solid red).  I don't buy stocks when this is the case.

Equity Capture


The signals to move to 25% then 50% cash over the past couple of weeks have allowed me to capture significant gains as well as pare some serious underperformers.  A large position in AKRX, combined with a slam at earnings time wiped out nearly $20K in paper profit, and the resulting GGT "NEW CASH" signal on the stock forced me to sell it well under my purchase price.  Despite this, the upward slopes of all the little trades from that time (about trade 1050 onward) show that the overall process works well.  Green dots indicate new equity highs.

On a month-to-month basis, I'm looking at the following:


The dip from 10/14 to 11/14 is due mostly to losses in AKRX and ATHM, and is also due to where the calendar falls.  Overall, the lower-left/upper-right slope is what we want, and presently, the system is on track to deliver an annualized 14% with only 2% drawdown.  Win/loss ratio is 2.23, and fluctuates between 1.8 and 2.5 (so far).

Go Forward Strategy

The Friday after Thanksgiving is typically very strong, and it pays to be invested in the market.  This being stated, the present setup with the Cumulative Tick is quite poor, and until the LCR slopes all turn green (positive), and the Cumulative Tick Ribbon turns positive on all measured time frames, I'm going to hold at 50% cash / 50% equity.

By the rules, the transition of the Short-Term Timer to New Long as of Friday's close is the signal to move back into the market.  With the Intermediate-Term Timer also Long, the rules state that I should be trying to get to 100% invested.

The number of quality stocks passing my screens is actually quite small -- I would expect many more than this in a really robust market.  Here's the list of stocks that are "leaders" according to my criteria:


Here's the symbol list so that you don't have to type:

AMBA
ANIP
BFR
BIDU
BITA
CAVM
CORE
ECHO
EPAM
HDB
HOLI
LEAF
MDXG
MFRM
NRF
PLNR
POZN
RFMD
RH
SAIA
SAVE
SKX
SMCI
STRP
SWKS
UA
UEIC
URI
UVE
ZUMZ
ATHL

All of these stocks are solid performers and I'm watching for breakouts.  You can check the GGT Stock file to see if they are rated Long or Cash.

Other stocks that are on my watch list that could become leaders, e.g., they are rotating into this position and have only one or two issues going on, are:


Again, here's the symbol list:

FB
ICLR
LCI
LTS
ATHM
ENPH
APT
SANM
HCLP
DXCM
DANG
AFSI
AGIO
GBX
KR
PPC

The top of this list really has my attention:  FB, ICLR, LCI, and to some extent, LTS, ATHM, ENPH and APT are all within striking distance of becoming leaders.  It's worthwhile to watch them, and I do.  The others on the list, mostly with yellow, are pushed to the bottom only because TradeStation does not have relevant data as of this analysis -- this generally clears when the market opens

I'm not a buyer on Monday.  I'm watching these two groups -- I have alerts set to ring my cell phone when they trigger, but I'm not a buyer.  Again, I need the Cumulative Tick and the LCR slopes to all be positive, and they are not.

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As with all my ramblings, you are responsible for your own decisions and I am not.  Please do your diligence, and please take ownership for your actions.

Regards,

pgd


Thursday, November 20, 2014

Moving to 50% Cash - Wednesday Nov 19 Close

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I'm traveling this week and am in Austin, TX, so this will be brief.

The Intermediate Term Timer has transitioned to MIXED state.  This occurs when the internal alignment of the exponential and simple moving averages within the timer are not in alignment.  This is a major warning signal.

The LCR table is growing in bearishness on a short-term and now, with today's action, intermediate term, which I consider anything above the 13d slope.

The transition of the intermediate-term timer is enough for a SELL signal to the next level down, in this case 50%, to be generated.

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I am raising cash to 50%.  I am doing this by issuing sell orders at a 1% Trailing Stop Loss (TSL), good 'til canceled (GTC), on all my holdings that are negative in gains sorted to most positive, until the equity equals 50% of my holdings.  This way, the weakest stocks in my portfolio are eliminated, and the ones with the most unrealized gains will remain active.

Here's the Timer Table:



The timer table shows we are still in a longer-term uptrend.

Here's the slope table:


On a short-term basis, we need some significant green on the RIGHT side to get us back above 50% equity.  For now, I'm raising cash.  It'll most likely take a few days to sell my positions and get to 50%.

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I'll be back this weekend and will attempt to catch up on where we are at with all of this.

Regards,

pgd


Friday, November 14, 2014

Friday, November 14 Morning - Raising Cash to 25 Percent

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A brief note here as I do not have time for a full entry.

With the close of markets last evening I've been presented a signal to raise cash to 25% of total holdings.

A number of stocks and ETFs triggered "New Cash" signals last night, so the market is pausing here.

In addition to those stocks that have "New Cash" recommendations, I'm selling the weakest positions in all my portfolios, until each portfolio has 25% overall cash / 75% equity.  The majority of these positions are winners, but, there have been a few dogs so the net will be minimal gains.  I'll post the equity curve this weekend.

I'm selling the positions, not 25% of the positions.  This thins the weakest stocks/ETFs from my portfolio and keeps the strongest ones intact.

My strategy is to enter a 1% trailing stop loss (TSL), good 'til canceled (GTC), effective after 9:45 am this morning.  This method misses the opening volatility while the book clears.

If the "raise cash" signal reverses before positions are sold then any open orders will be canceled.  We won't know this until after the close of markets tonight (Friday).

More to follow this weekend.

Regards,

pgd


Monday, November 3, 2014

"All In" -- 100% Equity as of Monday, Nov 3 Close

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Overview:  The long-term timer has transitioned from CASH to LONG, meaning that equity can be raised to 100%.

Timer Status:

Short-term timer:  LONG
Intermediate-term timer:  LONG
Long-term timer: LONG -- just transitioned tonight from CASH.
Percent stocks that are rated "Long": 62.7% out of 3025 stocks
Long-Cash Ratio:  1.684, 16 continuous days of positive advances.

Slope Table:



You can see on the right that the slope of the slopes, or the day-over-day acceleration of the number of stocks that are transitioning from a "CASH" recommendation to a "LONG" recommendation continues the advancement on the majority of measured time frames.

A warning is that when we do have a pull back or pause, the acceleration that is negative spans further into the measured time frames, indicating that we're slowing more and more.  While we are moving forward, we are doing so at a slightly slower rate (red) than the previous day, hence, a turning point should be anticipated.

The left side of the table is a beautiful example of what we want to see in a good market.  The staircase example of greens/reds shows the steady pace of the markets, and allowed plenty of time to get on board.

Percent Longs


Historically, we're in a zone where we could see a pullback.  You can also see from the above chart that we're par with where we pulled back last time.  You can also see that we're below where we historically pull back, so who knows what's going to happen?  Your crystal ball is as good as mine, and as you can see, a reversal from this area would not be a major surprise.  We've moved steadily upward for 16 days and a slight pullback of 1-2% would be quite healthy.

Strategy

I'm 75% in cash right now, and I intend to buy breakouts when the market pulls back.  The easiest way to do this is using Alexander Elder's (modified) method to enter.  Applied to my Greenfield Leader's list, this is what I get:



On the right side of the table you see three stocks:  CORE, LDL, and STRP.  Each have a positive slope for price on the 13d and 34d time frames (green), and the 2-day force index (price * volume averaged for 2 days) is NEGATIVE while the 13-day force index is positive.  This means the following:

13d and 34d EMAs with a positive slope:  short and long-term up trends
13d FI > 0:  up trend and stock has had volume associated with it
2d FI < 0:  short-term pullback, generally on decreased volume

When this occurs, I buy the breakout.

The breakout for CORE is as follows.  Today's high was $58.66.  Adding 0.1% to this gives me $58.72.  If I get a price that is larger than $58.72 after 9:45 a.m. ET, I'll enter another position in CORE (I already have a position, it's up +6%).  Do all of this with a BUY STOP, GTC.

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1) Start with quality stocks -- Greenfield Leader's list is as good as they come
2) Consider Elder-eligible stocks
3) Buy breakouts, so that you're buying strength

For the various portfolios that I am running, most are doing extremely well:



All of these stocks are taken from the lists in the stock file in the shared Dropbox folder, which about 110 of you review more/less nightly.  I expect you're doing about the same as above in your positions  ...

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Standard disclaimers apply.  You are responsible for your own investment decisions, and I am not.  Please take ownership for your actions, and please do your own diligence.

Regards,

pgd


Tuesday, October 28, 2014

Outstanding Day, Tuesday, Oct 28 Close

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Overview:  Markets had a notable up day.  Operating on a 75% equity position target.

Timer Status:

Short-term timer:  LONG
Intermediate-term timer:  LONG
Long-term timer:  CASH
Long-Cash Ratio:  Jumped +51% to 1.002 -- the database is at parity (equal number of stocks that are rated "LONG" and those that are rated "CASH".  There are 3029 stocks being tracked right now.

Slope Table:


All measured time frames now have a slope value that is positive.

We have a sea of green on the right, which is the slope of the slope.

This is a bullish table any way you take it.

Cumulative Tick:


Everything here looks solid.  From the top, Green over red means that more stocks are making 52-week highs on the NYSE than are making 52-week lows.  This is a requirement for me.

The middle plot is an algorithm buying/selling detector.  You can see that this afternoon was incredibly strong and that stocks were being bought and bid upwards at the end of every tick.  This chart advances upward when the number of ticks/minute exceeds 500/min to the advancing bid, so there was much strong buying going on this afternoon.

The bottom plot shows that we are in a steady uptrend in buying on all measured time frames.


This set of charts simply shows buying across the board on the S&P500, Russell 2000, and the NASDAQ.

Today was a solid day, and the 38th strongest day since September 2008 in terms of underlying market buying.

Strategy:

I'm at 50% equity right now.  I've not been too aggressive in getting into the market, and as a result, I missed 33% of the rise today (since my equity target is 75%).  I have a number of holdings and will add to them:

+


My gains to date are about +4% of my invested amount.  I've had no major losses yet on this new upward cycle.

My buy list is taken from my Greenfield Leaders list:


I also am watching today's breakouts:


Folks who choose to can get the breakouts, for a limited time, as they happen via their cell phone or email.  Send me a note if interested.

I plan on to keep buying until I hit 75% capital deployed.  It's a considerable amount of work, as I'm not using one simple portfolio.

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Standard disclaimers apply.  You are responsible for your investment actions, and I am not.

Regards,

pgd

Thursday, October 23, 2014

Thursday, October 23rd Close

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Overview:  Buying continued today but the intermediate timer is still MIXED, which is cautionary.  Operating on a target corresponding to 50-75% deployment of capital to equity.

Timer Status:

Short-term timer:  LONG
Intermediate-term timer:  MIXED
Long-term timer:  CASH
Long-Cash Ratio:  Increased +25% to 0.54 from 0.433, which is very bullish.
Percentage of stocks with a LONG recommendation:  35.1%, up 4.9% from Wednesday on 3031 stocks in the database.  This is bullish.

Timer Table:


The mixed status of the intermediate-termed timer gives me pause.  The longer this timer keeps this status, the greater the chances that this signal will reverse to the down side.  "Mixed" occurs when the internal signals of this timer are not aligned, meaning that one of the indicators is suggesting weakness while all the others have moved long.  The next few days will be critical to this signal; a reversal to the downside, given that this is the 8th trading day that we've seen an expansion, would not be a surprise to me.

Slope Table:


The LCR slope table looks good.  I am showing continued expansion of the database in terms of "Long" rated stocks, and you can see that the slope of the 34d moving average just turned positive.  You can see this on the left side.

We have a sea of green on the right, which is necessary for an expanding market.  In isolation, this is a great figure.

Transition Probabilities

A slight wrinkle to the moving long story is that it's important to get invested as soon as possible.  This has been more difficult with this signal, as the leaders are not surging to new highs across the board.

The transition table above shows historically, since September of 2008, what happens when the 2d - 21d LCR moving averages are already long (positive), as can be seen in the previous table, and the 34d moves to positive territory.  This is the situation that we have with today's action.

Historically, trades placed tomorrow (the day after the transition of the 34d transition) only work between 17-18% of the time to the end of the macro signal (e.g., when the timers all transition to CASH).  The set of stocks is much larger now than it was last week, so that is partly to blame (not a perfect system), but also, we're getting long in the tooth on this signal.  Again, I would not be surprised at a slight pullback here.


Cumulative Tick -- S&P500, Russell 2000, and the NASDAQ


On the good side, each of the major indexes showed more new 52-week highs than lows, with the NAS doing so by a thin margin.

The SPX putzed around today and didn't do much algo buying despite the high index gains.  Unless you are investing in a mutual or ETF tied to the indexes, you should ignore their action.  I ignore the major index values in general because the underlying stocks do not show the massive gains in terms of Cumulative Tick that we saw in the prices.

If you're not familiar with the Cumulative Tick, read more here.

The positives in the chart above are that the S&P500 and the NASDAQ finished strong for the day in the last few minutes.  This jump upward means that there was considerable buying and that the bid prices were advancing for the constituent stocks after each tick transaction.  This is bullish.

The Russell 2000 was a laggard in this regard.  The R2K is comprised of smaller-cap stocks, so the bigger, dividend paying and larger market cap stocks were the winners today, along with tech.

Cumulative Tick - NYSE


The NYSE Cumulative Tick looks good overall.  Not nearly the gains that we saw in the index increases, which should give you pause.  Algo buying was not overly present on the NYSE today.

Strategy

I'm a buyer, but with some caution.  I have many positions that are up, for a collective 1-2% on my portfolio, but these gains could fade quickly.

I'm continuing to deploy capital, but I'm not aggressively going after stocks that haven't yet fired.  I received a note about this today and what this means is this:

1) under normal conditions, when an order does not fill for the day, the stock did not break out.  My normal procedure is to re-adjust the price for entry downward to 0.1% above the day's high (which will be lower than my present price), and if the stock take out today's high with tomorrow's action, then I'm in.  This is what I consider "Aggressive".

2) What I plan to do tomorrow is different, e.g., less aggressive.  My orders that I have standing tonight will sit with the higher valued trigger prices, e.g., the levels that correspond to 0.1% higher than YESTERDAY's high.  This means that the stock has to work hard to get to this higher level before my Buy Stop will trigger.

Yes, I'm giving up some gains.  More importantly, if the stock is headed downward, GGT will fire a "New Cash" recommendation and I'll kill the buy order, and then the cash is safe.  For now though, with an expanding LCR, there are few "New Cash" recommendations.  In fact, out of a database of over 3000 stocks, today only produced 23 "New Cash" recommendations, and NONE of them were in my present holdings nor were they in my watch lists.

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

Regards,

pgd


Wednesday, October 22, 2014

Indecision, Wednesday, October 22nd Close

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Overview:  The intermediate-termed timer has transitioned back a step and is now in a mixed mode, meaning that internal indicators are not aligned 100% to either side (CASH or LONG).  Critical period for this bull leg.

Timer Status:

Short-term timer:  LONG
Intermediate-term timer:  MIXED (transitioned from LONG, so a step backwards)
Long-term timer:  CASH
Percentage of stocks in the database that are rated LONG:  30.2%, up 2.6% from Tuesday (bullish)
Long-Cash Ratio:  0.433, up +14% from Tuesday's value of 0.380 (bullish)

Timer Table:


As I stated in the overview, the "Mixed" moniker on the intermediate-termed timer stems from internal signals not being in alignment to the long side (in this case).  How this will resolve itself is anybody's guess -- your crystal ball is as good as mine -- but given that we still are seeing strength in the Long-Cash Ratio (LCR) and that the number of stocks with a "LONG" rating is growing, I'm still leaning that this will turn positive.

Until it does, I'm not buying too aggressively.

Slope Table:


Obviously, there is slight weakness in the 2d and 3d slope of the slopes, shown on the right.  This is to be expected with today's actions.  The left side of the table is intact, which is good.  We did not lose ground in any appreciable sense today, which is bullish (for now).

Cumulative Tick Chart:


The top shows that on a day-over-day basis, we have more 52-week New Highs than new lows.  This is desired and necessary for me to buy stocks on the long side.

The middle plot shows that about mid-day, around 12:30, the selling algos kicked in and never really subsided.  This dropped the cumulative tick (white) throughout the day, which put a chink in the armor but that's about it.

The solid, thick red trace has a positive slope, with the instantaneous cumulative tick (white) above it, so overall, we're still quite bullish.  I'm on the long side.

Strategy

Buy orders.  Today represents an opportunity to get some stocks about 1% cheaper than yesterday, so I am resetting my GTC orders to 0.1% higher than today's high, fired with a BUY STOP, active after 9:45 a.m. ET.

My list of stocks is taken from the Greenfield Leaders and Greenfield Bargains list in the dropbox file that I share with many of you.  It's free (for now) for the asking.

I'm operating on a 75% equity target for available funds.  The move of the Intermediate-termed timer to MIXED will slow me down in my aggressiveness, so 50% is still my first target (I'm a bit over 30% invested) and when/if the timer gets back to LONG I'll move a bit faster in getting into positions.

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Standard disclaimers apply, of course.

Regards,

pgd

Tuesday, October 21, 2014

Intermediate-Term Timer Now Long, October 21 Close

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Overview:  With both the short-term and intermediate-term timers now long, equity positions will be raised to 75% of capital.

Timer Status:

Short-term Timer:  LONG
Intermediate-term Timer:  LONG
Long-term Timer:  CASH
Long-Cash Ratio:  Jumped +33% to 0.380 from 0.285, the 77th largest jump in over 1000+ up days
Percent stocks with a LONG rating in the database:  27.6% out of 3034 stocks, up 5.4% from Monday.

Timer Table:


Historically, the progression shown above has worked out well.  It is possible for a slight pullback given today's action, so maintaining the Intermediate-term Timer recommendation will be key for continued buying of stocks.

Slope Table:


More green.  If you are not aware of the significance, please refer to older entries.  The right side of the table looks great.

Cumulative Tick Chart:



Continued upward slopes on all measured time frames.  Steady buying in the morning and afternoon.


Same chart as above, only zoomed so that you can see that we do have a large number of stocks on the NYSE making new 52-week highs.  This is significant and is worthy of continuing on the long side of stocks.

Strategy:

Continued buying on the long side.  The list of Greenfield Leaders is as follows:


This list is growing fast from just a few days ago and I'm trying to get into as many of these stocks as my different portfolio specifications will allow.

Beaten down stocks that have good fundamentals are in my Greenfield Bargains list:


The "red" here simply shows that pricing criteria has been violated in some fashion, an as soon as price moves higher most of these stocks will graduate to the Leaders list.

The complete list, to save you from typing each symbol, can be found in the Dropbox shared "stock" file that is updated nightly.  If you are not a member please send a note to pduncan {a t] v t [dot] e d u (figure it out, without spaces, etc.) with "Dropbox" in the subject and you'll get added to the shared folder.

I'm a buyer, attempting to get to a 75% deployed status.  It's hard.  Even with the buying over the past week I'm only at 25%; finding stocks that meet my portfolio criteria has not been as easy as it seems.   Historically, it's taken me about a week to deploy monies once a new signal is received; the first few days of this signal were slow and most stocks did not flip to "GGT LONG" status, preventing entry.  Tonight saw a large number transition, so the game is on.

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Standard disclaimers apply.

Regards,

pgd