Wednesday, October 22, 2014

Indecision, Wednesday, October 22nd Close

Overview:  The intermediate-termed timer has transitioned back a step and is now in a mixed mode, meaning that internal indicators are not aligned 100% to either side (CASH or LONG).  Critical period for this bull leg.

Timer Status:

Short-term timer:  LONG
Intermediate-term timer:  MIXED (transitioned from LONG, so a step backwards)
Long-term timer:  CASH
Percentage of stocks in the database that are rated LONG:  30.2%, up 2.6% from Tuesday (bullish)
Long-Cash Ratio:  0.433, up +14% from Tuesday's value of 0.380 (bullish)

Timer Table:

As I stated in the overview, the "Mixed" moniker on the intermediate-termed timer stems from internal signals not being in alignment to the long side (in this case).  How this will resolve itself is anybody's guess -- your crystal ball is as good as mine -- but given that we still are seeing strength in the Long-Cash Ratio (LCR) and that the number of stocks with a "LONG" rating is growing, I'm still leaning that this will turn positive.

Until it does, I'm not buying too aggressively.

Slope Table:

Obviously, there is slight weakness in the 2d and 3d slope of the slopes, shown on the right.  This is to be expected with today's actions.  The left side of the table is intact, which is good.  We did not lose ground in any appreciable sense today, which is bullish (for now).

Cumulative Tick Chart:

The top shows that on a day-over-day basis, we have more 52-week New Highs than new lows.  This is desired and necessary for me to buy stocks on the long side.

The middle plot shows that about mid-day, around 12:30, the selling algos kicked in and never really subsided.  This dropped the cumulative tick (white) throughout the day, which put a chink in the armor but that's about it.

The solid, thick red trace has a positive slope, with the instantaneous cumulative tick (white) above it, so overall, we're still quite bullish.  I'm on the long side.


Buy orders.  Today represents an opportunity to get some stocks about 1% cheaper than yesterday, so I am resetting my GTC orders to 0.1% higher than today's high, fired with a BUY STOP, active after 9:45 a.m. ET.

My list of stocks is taken from the Greenfield Leaders and Greenfield Bargains list in the dropbox file that I share with many of you.  It's free (for now) for the asking.

I'm operating on a 75% equity target for available funds.  The move of the Intermediate-termed timer to MIXED will slow me down in my aggressiveness, so 50% is still my first target (I'm a bit over 30% invested) and when/if the timer gets back to LONG I'll move a bit faster in getting into positions.


Standard disclaimers apply, of course.