Monday, May 26, 2014

May 23 2014 Intermediate Timer Transitions to the Long Side, but ...

... we're not out of the woods yet.

With the close of markets on Friday, May 23rd, my short-term and intermediate-termed timers are now on the "Long" side, e.g., they are signaling a time to move into the markets.  My long-term timer is still in "Cash" and is not anywhere near close to confirming this move, hence my tentativeness.

Action:  I'll enter stocks that are in some form of long status from my GGT list, with updates available nightly in the GGT Public Dropbox.

(Aend me a note at pduncan [at] vt [dot] edu with the word "dropbox" in the subject line if you want to be added.  You'll also get forced added to a private, closed Yahoo site as it's the only way I can communicate with the subscribers.)

I've updated the lists this past three-day weekend.  The "Leaders" list offers a good overview of stocks that have great fundamentals but note, many are beaten down.  The "Greenfield Leaders" list are those that are holding up quite well in this declining market.  Here's a partial list of what I'm looking closely at right now:


and on and on and on...  You'll have to verify that these are in some form of "long" status from the stocks file in the dropbox.

In terms of buying methodology, buy strength.  This means placing a BUY STOP, Good-til-Canceled (GTC) at about 0.1% higher than the previous day's high (multiply the high by 1.001 and round up).  I also tend to place a time restriction on the order, e.g., it has to occur after 9:40 a.m. or so, simply to miss the initial clearing of the book that occurs at the open.  If the stock passes through your BUY STOP it will convert to a market order and the next price will be be taken as your order price.   If it does not pass through your BUY STOP then the order will be valid at the end of the day, and you'll need to adjust your new entry price to 0.1% higher than the day's high.  Each day this occurs you're getting a better entry price, provided that the stock remains in some form of "long" status.  If it kicks over to "New Cash", then simply cancel the order and the reserved monies will reappear in your equity balance for investments.

I'm suspect on this signal simply because of two key elements:

1) there is no volume in the present market
2) my long-term timer, the difference between the 13d and the 65d EMA (I know, simplistic), is negative.

I feel that you need both of these conditions to move higher in a sustained manner.  We have neither, so I'm not committing much coin to the market.

Simply investing the the IWM would be a good play; it's diversified, but note, GGT indications for the Russell 2K ETFs are BEARISH-favored, not bullish, so the ETFs are not indicating any long-term upside.

Cautious indeed.

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