Thursday, October 2, 2014

Thursday, October 2 Close Update

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Timer Status:

Short-term timer:  CASH
Intermediate-term timer:  CASH
Long-term timer:  CASH
Long-Cash Ratio:  0.193, fell -24% on Wednesday and -2% today.
% Long-rated stocks in database:  15.7%, FELL -4.2% on Wednesday and -0.8% today.

It's worthwhile to note that the present LCR of 0.193 means than for every 200 stocks that are rated "LONG", there are 1000 stocks that are rated "CASH".  This is incredibly oversold and we haven't been this low since November of 2012.  We can go lower.  In August of 2011, right in the middle of the recovery, we went as low as 0.095.

Slope Table:


Sea of red on the left side of the table, so no buy signal.  The only good indicator is on the right, and as you can see, we had a full day of green, e.g. the slope of the slopes all turned positive.  Continuing this trait is necessary to get a buy signal.

We do NOT have any indication of a buy signal at this time.

Cumulative Tick:


52-week New Lows still are dramatically outpacing 52-week New Highs.  This is inverted from what we want when we move long in the market.

As you can see in the middle plot, which is algorithmic views of buying/sell, we had a fairly strong selling market from about 10:00 to about 11:30.  European markets closed at 11:30, and then you can see that we were into a "normal" sideways market until about 12:30.  Whether Europe was selling US Equities is anybody's guess, but it makes sense given their softness right now (but correlation is not causality, so don't be so quick to draw that conclusion).  From about 12:30 to about 3:00 pm the markets experienced HEAVY buying, and we had a significant rebound for the day.  This is quite positive.

Key here for Friday is that we continue this buying process.

Note that the long-term moving average of the cumulative tick (red) is still negative in slope and falling day-over-day.  This is also inverse of what we want so there is no chance of buying on Friday.

Strategy.

I plan on taking Friday off and will not be buying stocks in any form.  A few of my dividend stocks have issued "New Cash" recommendations, so I will be closing those with a 1% trailing stop loss, GTC, effective after 9:45 or so.

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I'll post my watch list over the weekend.

Standard disclaimers apply.  Please do your own diligence and please take ownership for your actions.

Regards,

pgd