Monday, September 29, 2014

Monday, Sept 29 Close Update

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Timer Status:

Short-term Timer:  CASH
Intermediate Term Timer:  CASH
Long-Term Timer:  CASH
Long-Cash Ratio:  FELL -3% to 0.279
% Long-rated Stocks in Database:  FELL -0.6% to 21.8%

Slope Table:


The LCR fell another -3% to 0.279, indicating that out of 279 long-rated stocks in the database, 1000 are rated for cash.  This value -- 0.279 -- is incredibly oversold, but we can go lower.  On 11/15/2012 we hit 0.233, and on 5/21/2012 we hit 0.181.  In both cases we had false starts to the upside, then clocked lower lows.

The right side of the table, which is the slope of the slopes shown on the left side, has two solid days of gains.  The right side MUST show significant green before the left side, and we have this setup with today's action.  Whether it will translate into a buy signal is unknown -- we certainly do not have one this evening.

We are approaching a possible buy signal, but it does not exist as of this data.  We need the left side 2d, 3d, and 5d to turn green.

Cumulative Tick Chart:


52 Week New Lows still are outpacing 52 Week New Highs.  Until this changes it makes no sense to buy stocks unless you can magically cherry pick winners that will buck the trend -- I can't do so with any consistency so I don't do it anymore.

In terms of buying and selling under algorithmic control, we ended the day nearly net neutral.  The early morning selloff was on the indexes only -- the selling pressure did not last long and buying kicked in shortly after the open.

The longest moving average on the cumulative tick chart significantly moderated the downward slope of the previous days -- simply look at the red trace.  Further, despite the indexes all being in the red, you can see that the real-time cumulative tick made significant upward progress today -- more stocks ended on a positive advance in the bid/ask after the tick transition, and on the whole, this is what we need to see.

I'm specifically looking for the white trace to move above the red trace, and then all the other moving average ribbon lines will turn positive and move above the red trace.  When this occurs we'll have our first indications that the move to the upside is real and that the bottom may be in.  This method is not full proof -- we need other indicators to confirm -- but it is necessary for a sustained advancing market.

Equity Capture:


Most of my unrealized profit was realized today -- you can see the dramatic vertical climb of the equity curve as the remaining positions were stopped out.  Again, this is by design.  I'm almost entirely in cash now (about 10% invested), so powder is nearly 100% dry until we get the next signal.

Here are my remaining holdings:


Strategy:

Tuesday is another easy day.  I have one open sell order -- SIAL -- and the remaining positions are only triggered by GGT recommendations.  I have no buy orders.

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Standard disclaimer applies.

Regards,

pgd