Friday, September 26, 2014

Friday, September 26th Close Update

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Timer Status:

Short-term timer:  CASH
Intermediate-term timer: CASH
Long-term timer:  CASH
Long-Cash Ratio:  FELL -1% to 0.289
% Long-rated stocks in Database:  FELL -0.2% to 22.4%

Slope Table:


Cumulative Tick Chart:



Holdings:


Equity Capture:



Leaders:



Commentary:

Despite the indexes moving up today (RUT +0.82%, DOW +0.99%, NAS +1.02%, SPX +0.86%), the long-cash ratio (LCR) fell -1%, indicating that the equally-weighted world and the market-cap-weighted indexes are out of sync.  I don't believe the indexes unless I'm invested in the IWM, DIA, QQQ, or SPY; everything else may or may not correlate.

The long-cash ratio is now 0.289, meaning that for every 29 stocks that are rated LONG, 100 are rated CASH.  The trend is falling.  I do not buy when this trend is falling.

Correspondingly, the number of long-rated stocks fell slightly to 22.4%.  There are 3040 stocks in the database as of tonight.  This is not what I would expect when all the indices are rising.

The left side of the slope table shows a sea of red.  All the slopes of the moving averages for the indicated time frames are downward, even the shortest ones.  I do not buy until the 2d, 3d, and 5d turn green, and the earliest this could happen is Monday with a Tuesday buy signal (because I evaluate in the evenings).

The NYSE continues to show more 52-week New Lows than New Highs, by a wide margin.  I do not buy when this is the case.

At approximately 1:50 pm today we started to see buying algorithms kick in, which lasted for almost exactly 1 hour (really).  During this period the NYSE saw, on a minute-over-minute basis, a net 500 stocks per minute ending their transaction on the tick with the bid/ask moving upwards.  The straight line in the cumulative tick chart (middle plot) tells you that these were buying algorithms.  This is encouraging, but it is not sufficient for me to jump into the market.

Also on the cumulative tick chart the long-term moving average (red) of the cumulative tick has a downward slope, but it is a bit more relaxed than it has been.  This too is encouraging, but again, not sufficient.  The real-time tick (white) needs to be above red for me to consider buying.

A number of positions sold off today, capturing more equity.  Green dots indicate new highs for the equity curve, and you can see we're generating many right now.  This is by design.

1% trailing stop losses are set on all positions EXCEPT my dividend portfolio, which uses GGT purely for timing.  There currently is about $30K open profit that could be captured if I sold at Friday's closing prices.  These positions will move to cash if they fall more than 1%, and the orders are GTC.  If we get a buy signal before they execute then I will remove the pending sell orders and these positions will form the basis of the next round of the cycle.

The leaders list is posted above.  Here are the stocks for your own evaluation:

AGN
AMRI
APT
ARII
BABY
BFR
BITA
CAAS
CBK
CORE
CP
ECHO
ENPH
EW
FB
FNHC
GIII
GILD
HBI
HEES
HOLI
HTLD
IDTI
INFN
KNX
LDL
LUV
MAR
MFRM
MNST
MPET
NXPI
OTEX
OVTI
PJC
PL
PRSC
PRXL
RCL
RFMD
RLGT
SAVE
SHPG
STZ
SWKS
TMH
TUES
WGP

These are not recommendations -- they are simply provided so you can see which stocks I am following.  Do your own diligence please.

A number of these stocks are seeing a significant inflow of large effective volume (www.effectivevolume.com).  Large effective volume signifies large-lot buying over time, and this typically is institutional buying.  I would be watching the following closely on Monday if we had a buy signal (we do NOT, so this point is moot):

LDL
RFMD
SHPG
HEES
HOLI
SWKS
IDTI
GIII
TUES
AGN
BFR
FB
PRSC

A few of these broke out today on higher volume:  HEES, AGN, PRSC.  SHPG and IDTI never fell below the 50% candle that was generated Thursday, which is generally a good sign.

Strategy:

Monday is an easy day.  No buying for me.  Sell orders are placed.  I most likely will not be watching the markets too closely.  

Monday night's eval of the markets will be interesting.

Make it a great weekend.

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

Regards,

pgd