Saturday, March 8, 2014

Short-Term Signal to Raise Cash - EoD Mar 8 '14

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The long term trend, as determined by a simple moving average crossing of the 13d and 65d is UP.

The intermediate term trend, as determined by the slopes of a number of moving averages of stocks in the general market, is UP.

The short-term trend has signaled CASH as of the close of 3/8/14.  What does this mean?

A number of folks I interact with zip in and out of the market.  They like to be "early" on the longer signals, and they like to realize short wins.  If this fits your style you probably entered the market about 2/7 (a month ago), have seen some great increases in the broad markets (over 5% typically), and now we're seeing a stalling.  If this is you I'd lock in the gains on these short-term positions come Monday.

On the other hand, if you're like me and like the long-term and intermediate-termed trends, you do not have to do anything.  You literally can ignore the short term timer and do just fine.

Of course, there is a caveat:  the short term timer is the fastest timer, so when it goes south, the intermediate and long term timers could follow.  The intermediate timer will be next, and I'll post if it changes state.

For you mathematically minded folk, here is a historical performance of the short term-timer, as applied to the GGT index (which is closely approximated by the IWM - Russell 2000):


The short term timer, in isolation, is not a hit-the-ball-out-of-the-park system, but it isn't bad.  It gets you into winning trades quickly, and more importantly, it gets you out of losing trades very quickly.  See the "Avg Winning Trade" vs. "Avg Losing Trade" stat.  For those of you familiar with Van Thorp, the SQN value of 2.52 is a very good number.

This being said, your crystal ball is as good as mine.  I intend to stay the course until my timers indicate otherwise.  I do not trade the short term timer because of my personal schedule.  I am more of an intermediate and long-term investor.

Here are my positions and gains:

DL, up 13%
DLPH, up 2%
FB, up 3%
ILMN, up 105%
ILMN, up 4%
PKG, 2 positions, both up 5%
SAVE, up 14%
TRN, up 23%
XRS, up 63%
XRS, up 23%

I have about 9% cash right now and am on the hunt to put that capital to work.

If you follow my Dropbox files each night you've been able to track my holdings, as they are fully listed by account.  If you want this info, send a message to pduncan [ at ] vt {dot} edu with the subject DROPBOX and I'll add you.

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As far as "what is looking good", here's my list for Monday, sorted by most favorable effective volume descending:


DL
DATE
FENG
XRS
AEIS
CBM
EJ
HZNP
QIHU
COWN
MEOH
PKG
GNRC
HEES
JAZZ
NFLX
NGVC
NTCT
TRN
VRTU
YY
ANIP
DOW
GMED
ABMD
BIDU
BLDR
BOFI
CTSH
ININ
NUVA
OSUR
SWKS
WWWW
GIII
MCO
BWLD
ICLR
CSTE
PCLN
KORS
WYNN
WAB
QCOR
AEL
SLCA
EBS
KBALB
CBI
HEI
JNPR
TSLA
NAT
AUDC
FB
PACB
SBNY
THRM
BITA
FEIC
LOCK
TASR
AKAM
DORM
LIOX
SONS
PVTB
HP
GMCR
ITT
PNFP
GILD
CADX
HCLP
AZPN
HURN
LCI
LOPE
SCOR
WDR
LPLA
MTRX
ZBRA
ULTI
WAG
HF
VIPS
BWS
SCHW
AMBA
ATTU
HPJ
ICFI
LOJN
MGIC
PCOM
WTT

"Smart money" is flowing into the stocks at the top of this list, but all of these stocks pass my screening criteria as of the close of 3/7/14.

As always, do your diligence, and take ownership for your actions.

Regards,

Paul