Saturday, April 12, 2014

April 11 2014 Long-Term Timer Signals a Move to Cash

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Read here first, then come back ...

All my timers are now in cash with the close of markets on Friday:


Note that this latest transition of the 13/65 day MA timer could be "late", e.g., the markets recover on Monday and shoot upward, or it could be the start of something relatively painful.

As this timer is my last line of defense, I'm out of the markets as of the close of business on Monday.  I have placed orders on all accounts that I manage to move into cash or cash equivalents.

My performance this year has been flat.  Our TSP account is up about 3% for the year to date.  One of my equity accounts is up +1%, while another is flat.  For the accounts that I manage, I'm down between -1% and -4%.

The NASDAQ index is performing the worse of the major indexes and is rapidly approaching the 200d MA.    It is below the 20d and 50d MAs, if it doesn't find support there it will be ominous for the longer haul.  Our close Friday at 3999.73 now sets a mental resistance at 4000 AND the 200d below at 3936 isn't too far away at about 2%.  The fact that the 20d MA is below the 50d MA is a problem all onto itself -- this is a huge boat anchor going into this earnings quarter.

The DJIA is also in the same shape, with the 20d MA below the 50d MA.  Next stop is the 200d MA which is only 2% below present value at 15,747 (we are at 16,026).

The S&P500 is holding up the best, relative to the three.  It closed at 1815.69, and the 200d is sitting down at 1761, about 3% away.

These are major support levels.  We will test them once or twice and if they hold, we'll see a good buying opportunity.  If they do not hold, well, "sell in May and go away" ...

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With respect to buying, it's too early.  This being stated, I always keep track of what I would buy if a signal occurred tomorrow.

Here's my "green screen":



As always, right click on the image to open in a new tab or window.

As a group these are holding up nicely.  As a larger group, e.g., the one that existed last week, these are the remaining survivors.  Last week saw nearly 100 stocks on both lists, now you can see the full list above.

Stocks of this quality will most likely comprise the new leadership once the markets turn (or more accurately, stocks meeting the green screen criteria will be the first to break out -- not THESE stocks per se).

Compare these two charts.  The top is chart is the performance chart of all stocks meeting my fundamentals screen but failing the moving average criteria (e.g. quality stocks that have been hit very hard in the last couple of weeks) vs. those stocks that meet both my moving average criteria as well as the fundamental criteria:

Probation:


Winners bucking the trend:


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

Of course, you'll want to pick stocks that comprise the bottom chart when the next signal comes.

If you want to subscribe to this list simply send me an email at pduncan [at] vt {dot} edu with the word "SUBSCRIBE" in the subject line and I'll add your email address to the Drobox access folder.  You'll also be forced added to a Yahoo! group called GGT, as I need to communicate with the dropbox subscribers from time to time and that is the only way I can do it.

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As always, you are responsible for your own investment decisions and I am not.  Do your diligence, take ownership for your actions, and make sure you think through your action in terms of your long-term goals.

Regards,

Paul