Wednesday, September 10, 2014

Intra-Day Reversal Not Supported by Data - Sept 10

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Timer Status:

Short-term timer:  CASH
Intermediate-term timer:  CASH
Long-term timer:  LONG
Long-Cash Ratio:  falling, 6th consecutive day to 1.055

Slope / LCR Table:


Cumulative Tick Chart:


Equity Chart:



Comments:

The strongest day-over-day indicator is the Long-Cash Ratio, or LCR. Despite the apparent reversal of the indexes, and the subsequent reversal of the cumulative tick indicator around 11:00 a.m., the LCR fell for the day which indicated continued weakness.  The slope of the 10d EMA on the cumulative tick is negative, and until the white line (real-time TICK) crosses the red line (10d EMA) from below it does not pay to enter the markets.

Strategy:

I continued to unwind many of my long positions to a net 50% of their original holdings.  The equity curve is now in new territory, as can be seen by the green dots above, and there are further gains to be captured.

I have set 1% trailing stop losses on all positions that are above the waterline that will take the positions down to 50% cash.  Coupled with some of the new "New Cash" entries, total holdings are between 50%-60% cash when all the dust settles.

The cumulative TICK value (white) needs to be above the 10d EMA (red) in order for it to start to turn upwards.  While this is in a down trend, and while the LCR is in a downtrend I am not going to be buying any new positions.  Yes, I have my watchlist (see a few posts ago), but I've not done any position sizing exercises AND until the 2d, 3d, and 5d EMAs on the LCR slopes values turn positive there will be no intermediate buy signal.  At a minimum the 2d and 3d need to convert to green, and this will not occur before the end of the day on Thursday.

All the book keeping is caught up, the orders are placed, so tomorrow (Thursday) will be an easy day.

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

Regards,

pgd