Wednesday, September 17, 2014

Wednesday, Sept 17 Update

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Timer Status:

Short-term timer:  CASH
Intermediate-term timer:  CASH
Long-term timer:  LONG
Long-Cash Ratio:  fell another -4% to 0.677
% Long Recommended Stocks in database:  40.4%, 4th consecutive day of falling

Slope Table:

(right click on the image to open in a new tab or window)

Slope Chart:



Cumulative Tick:


(right click on the image to open in a new tab or window)


Commentary:

I was surprised that the LCR fell again today -- and this was also confirmed by the number of LONG-rated stocks in the database dropping to 40.4%.

The left side of the LCR table above is a sea of red, indicating a short-term bearish position on the market.  Below the LCR table I have presented the actual slopes over the past two weeks, and you can clearly see that while everything is below zero (red in the LCR table), we are close to transitioning to the long side if we could get a good up day.

Today was not that day.

The Cumulative TICK chart shows that there are a couple of positive things going on.  First, at the top of the chart in the upper right corner you can see that green is over red -- the number of New Highs on the NYSE was above the number of New Lows for the first time in over a week.  This is good and a necessary condition for the markets to move upward with any confidence.

Another good sign in the CT chart is that the 10-day EMA of the Cumulative TICK (solid red) is LESS negative in terms of slope.  I've drawn some straight lines that show the slope from yesterday and from Monday and you can clearly see that we are above them.  Hence, while we are still falling, and more stocks are being sold than are being bought, it's not as brutal as it has been.

You can also see that the instantaneous CT line (white) is more or less in a tight range since yesterday.  Neither good, nor bad, but with volume higher today, there was a bit of a war going on.  Note that the markets were flat until about 1:45 pm ET, then some buying started, then it fell off around 3 pm, never to return.  A false start.

Strategy:

I'm still operating on a 50% cash signal.  Most of my positions have unwound to this level, and if any portfolio is lower than 50% it's because the stocks or ETFs have fired a "New Cash" and I've sold them.

Thursday will be an easy day.  Just a few orders are left to sell (1% trailing stop loss set, GTC), and no buying is planned.

Surprisingly, my watch list is unchanged from yesterday.

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Standard disclaimers apply.  Read the left side of the blog for the verbiage.

Regards,

pgd