Thursday, September 25, 2014

Moving to Cash - Thurs, 9/25 Update

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Timer Status:

Short-term timer:  CASH
Intermediate-term timer:  CASH
Long-term timer:  CASH
Long-Cash Ratio:  0.291, falling -23% from yesterday
Percent Longs in Database:  22.6%, fell -4.9% (a large amount given there are over 3000 stocks)

Slope Table:



Cumulative Tick Chart:



Timer Table:



Commentary:

The long-term timer has transitioned to CASH, so now the model moves to 100% cash.  

Yes, we are quite oversold -- in fact, we are the most oversold that we've been in some time.  We could go lower though, or we could rocket northward.  Your crystal ball is as good as mine.

The Long-Cash Ratio fell a huge amount on a day-over-day basis: -23% downward, and this is statistically significant.  Today could have been a capitulation or exhaustion sell-off, meaning we're near a bottom, or it may continue to erode.

The Cumulative Tick chart is nearly the same as yesterday so I'll simply move on with no comment.  Read yesterday's entry if you want to better understand the chart.  Simply put, bearish on all time frames, especially short-term.

The minimum length that we've stayed with the long-term timer in "CASH" is 8 days, meaning, that after about 5 days we started heading upward.  The short-term timer will be the first to signal a return to buying, then the intermediate-term, then the long-term.  We'll see what happens here.

Strategy:

I'm placing 1% trailing stop loss (TSL), GTC, effective at 9:45 a.m. ET, on all open positions.  I still have several:



Time to raise cash in earnest.

We may reverse here since we're so oversold.  If this is the case, and we see the short-term timer move to the LONG status, and if any open sell orders exist, they will be cancelled.  If a buy signal is generated in the next week the investment level will be either 25% or 33% invested, depending upon what the LCR is doing.  More on that in future blogs.


I'm not screwing around here -- time to lock in remaining profits ($35K and change as I write) and wait for the market to figure out what it wants to do.


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

Regards,

pgd