Monday, August 11, 2014

August 11th Close: Short-term Timer Signals Entry

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Summary

Long-Term Timer:  CASH
Intermediate-Term Timer:  MIXED (possible transition to LONG or CASH possible)
Short-Term Timer:  LONG (and confirmed)

Here's the graphical version:



This latest transition indicates that it's safe (safer) to go in the water than just a few days ago.  The "Mixed" status of the intermediate-termed timer is somewhat of a warning -- until it moves long we are not in a sustained uptrend on that time interval.  Hence, expectations of holding anything longer than a few days at most (with the data that we have today) is misplaced.

I intend to start buying positions that show strength.  I covered how I do this in previous writings so read backwards.  I use a BUY STOP that turns on after 9:40 a.m.

In addition to yesterday's "Greenfield Leaders" list, there are a few additional stocks that appeared today:

BX
ENPH
ENV
IDTI
LDL
PEIX
PL

I don't have a GGT recommendation for PEIX and it will be the weekend before I can stop the number crunching and insert it.  Sorry for the inconvenience.  PL, ENV, and INPH are long, with BX, IDTI, and LDL in cash.  The GGT stock file in the Dropbox folder has been updated.

Also from yesterday's list -- remove BFR, as it's not performing well, despite the drop in volume which is showing loss of selling conviction.  The chart looks terrible, so I'm not sorry to see it go.  Note that it was already a GGT "Cash" stock so you should not have been playing with it in the first place.

As far as the LCR table is concerned, here's the update:

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

Of interest is that the LCR -- the Long/Cash Ratio -- has moved off the bottom of 0.335 now for two consecutive days, which is good.  A value of 0.335 means that nearly 3 stocks are in CASH for every one that is LONG -- this is really an oversold condition.  Parity is a value of 1.  3:1 to the reverse is overbought (3 LONG for every 1 CASH) and is the other extreme.  I think the bottom is in (for now) and we're going to move higher in a zig-zag fashion.

Whereas Friday saw just the 2d and 3d LCR slopes turning positive, today saw the 5d and 8d slopes also change positive.  This is what triggered the SHORT TERM BUY signal.

It could fail.  Just look back at 7/22 - 7/25 and you can see an example of this.  I don't think that it will -- the right side of the table is green AND it is stronger, so I think we're okay.  Again, zig-zag, but most likely upward.

When you buy strength on individual stocks it takes days to enter positions.  My goal is to ramp into the market all week and hopefully be around 25% "in" when the medium-termed timer moves LONG and 75% in when the long-termed timer moves LONG.  We'll see.

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As usual, 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