Monday, March 24, 2014

Short term timer moves LONG

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Here is the status of my various timers:



Short Term Timer
Intermediate Term Timer
Long Term Timer
Status
NEW LONG (3/21)
Cash (Whipsawing Started 3/11)
Long (2/14)



Since 2008 the signals on the short-term timer have been fairly robust, as can be seen in the statistics shown below.  The equity used is the GGT index, which closely resembles the Russell 2000.




The values that are meaningful are the average winning trade value (+3.49% per trade), average losing trade value (-1.47%), and the t-Test/SQN value (2.52).  SQN values above 1.8 indicate more than chance is occurring, so this 2.52 metric indicates that the timer should keep you on the right side more than not.

Additional values that are meaningful are the ME value (0.58) and the PRR value (0.88).  ME values above 0 indicate a positive expectation that the system will make money in the long haul.  PRR values above 1.0 are desired, so the 0.88 value is indicative of the need to “tread lightly”.  Certainly, now is NOT the time to jump back into the market with both feet.





Caution is advised.  The high count of distribution days across the major indices, in combination with the whipsawing of the intermediate timer, both give me pause.  Throw in the quadruple witching day on 3/21 and the result is higher daily volume on uncertain prices.  Nevertheless, the Long-Cash Ratio (LCR) moved upward and is now reflecting a new short-term buying cycle, so entry into positions, however risky at this point, is enabled. 

It’s important to note that the short-term timer will generally precede the intermediate and long-term timer signals.  This is by design.  I have no intention of committing all my money at this time.  10-25% of a full position is about my maximum level of risk tolerance with the present timer status.


From a longer-term point of view, I like the following stocks in that they all have dividend payments, although some are not very exciting on the dividend front:



The "yellow" rows are due to data at TradeStation not populating this morning; this is common and when trading starts they do some magic on their end and the data will complete.

The list is sorted most favorable effective volume (http://www.effectivevolume.com) stocks at the top descending.

A description of the columns can be found here.  Note that the 2nd column from the RIGHT is new and is not yet in the document -- this is the change in dividend on a year-over-year basis.

Overall, my combined leaders list is looking relatively strong:



Again, the 2nd column from the right is DIVIDEND change on a Year-Over-Year basis and is not in the description document.  I'm becoming more interested in the combination of my screen with accelerating dividends so I've added that data.

Key stocks that have my attention this morning (Monday) are the following:


These stocks have been seeing significant price + volume decreases yet some are experiencing significant inflow of large effective volume (http://www.effectivevolume.com) .






For the indicated stocks, I'm watching for a breakout in price action to occur that would trigger me to jump in.

Of course, none of these listings are a recommendation to purchase.  Do your own diligence, take ownership for your actions, and ensure that your timeframes are consistent with mine or my timers simply will not work for you.

Regards,

Paul