Tuesday, September 30, 2014

Tuesday, Sept 30th Close Update

.
Timer Status:

Short-term Timer:  CASH
Intermediate-term Timer:  CASH
Long-term Timer:  CASH
Long-Cash Ratio:  FELL -7% to 0.260
% Long-rated stocks in database:  FELL -1.1% to 20.7%

Slope Table:


Mixed progress today in terms of the right-side of the table, but overall, bearish on the short-term.  The sea of red on the left side puts any chance of a buy signal out at least to Thursday at the earliest, and it's going to take a stellar day on Wednesday to make that happen.

Cumulative Tick:


52-week New Lows still dominate over 52-week New Highs.  No buying on the long side when this is the case.

We saw the instantaneous cumulative tick (white) cross the longer-averaged cumulative tick (red) from below, which was initially bullish, but it failed and we're back into a slightly decreasing slope on the longer-termed cumulative tick chart.  Again, no buying when this is the case.

The "bunching" of the moving average lines of the ribbon tells us that we're close to either breaking upwards (a potentially new run at the long side), or we're going to rejoin the drop in the indexes.  While we certainly can go down from here, we are very oversold at this point, so I'm not as bearish as I was a week ago.  We may still drift sideways and have a few attempts at a breakout before it occurs ... I don't know.  Your crystal ball is as good as mine.

Timer Table:


The table tells all I need to know -- Wednesday is another easy day.

Strategy:

Travel day for me, and luckily, there is no reason to watch the markets.

I'll be out playing late on Wednesday night, so no blog entry.  Next entry will be Thursday.

~~~~~~~~~~~~

Standard disclaimers apply.

Regards,

pgd

Monday, September 29, 2014

Monday, Sept 29 Close Update

.
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.

~~~~~~~~~~~~~~~

Standard disclaimer applies.

Regards,

pgd

Friday, September 26, 2014

Friday, September 26th Close Update

.
Timer Status:

Short-term timer:  CASH
Intermediate-term timer: CASH
Long-term timer:  CASH
Long-Cash Ratio:  FELL -1% to 0.289
% Long-rated stocks in Database:  FELL -0.2% to 22.4%

Slope Table:


Cumulative Tick Chart:



Holdings:


Equity Capture:



Leaders:



Commentary:

Despite the indexes moving up today (RUT +0.82%, DOW +0.99%, NAS +1.02%, SPX +0.86%), the long-cash ratio (LCR) fell -1%, indicating that the equally-weighted world and the market-cap-weighted indexes are out of sync.  I don't believe the indexes unless I'm invested in the IWM, DIA, QQQ, or SPY; everything else may or may not correlate.

The long-cash ratio is now 0.289, meaning that for every 29 stocks that are rated LONG, 100 are rated CASH.  The trend is falling.  I do not buy when this trend is falling.

Correspondingly, the number of long-rated stocks fell slightly to 22.4%.  There are 3040 stocks in the database as of tonight.  This is not what I would expect when all the indices are rising.

The left side of the slope table shows a sea of red.  All the slopes of the moving averages for the indicated time frames are downward, even the shortest ones.  I do not buy until the 2d, 3d, and 5d turn green, and the earliest this could happen is Monday with a Tuesday buy signal (because I evaluate in the evenings).

The NYSE continues to show more 52-week New Lows than New Highs, by a wide margin.  I do not buy when this is the case.

At approximately 1:50 pm today we started to see buying algorithms kick in, which lasted for almost exactly 1 hour (really).  During this period the NYSE saw, on a minute-over-minute basis, a net 500 stocks per minute ending their transaction on the tick with the bid/ask moving upwards.  The straight line in the cumulative tick chart (middle plot) tells you that these were buying algorithms.  This is encouraging, but it is not sufficient for me to jump into the market.

Also on the cumulative tick chart the long-term moving average (red) of the cumulative tick has a downward slope, but it is a bit more relaxed than it has been.  This too is encouraging, but again, not sufficient.  The real-time tick (white) needs to be above red for me to consider buying.

A number of positions sold off today, capturing more equity.  Green dots indicate new highs for the equity curve, and you can see we're generating many right now.  This is by design.

1% trailing stop losses are set on all positions EXCEPT my dividend portfolio, which uses GGT purely for timing.  There currently is about $30K open profit that could be captured if I sold at Friday's closing prices.  These positions will move to cash if they fall more than 1%, and the orders are GTC.  If we get a buy signal before they execute then I will remove the pending sell orders and these positions will form the basis of the next round of the cycle.

The leaders list is posted above.  Here are the stocks for your own evaluation:

AGN
AMRI
APT
ARII
BABY
BFR
BITA
CAAS
CBK
CORE
CP
ECHO
ENPH
EW
FB
FNHC
GIII
GILD
HBI
HEES
HOLI
HTLD
IDTI
INFN
KNX
LDL
LUV
MAR
MFRM
MNST
MPET
NXPI
OTEX
OVTI
PJC
PL
PRSC
PRXL
RCL
RFMD
RLGT
SAVE
SHPG
STZ
SWKS
TMH
TUES
WGP

These are not recommendations -- they are simply provided so you can see which stocks I am following.  Do your own diligence please.

A number of these stocks are seeing a significant inflow of large effective volume (www.effectivevolume.com).  Large effective volume signifies large-lot buying over time, and this typically is institutional buying.  I would be watching the following closely on Monday if we had a buy signal (we do NOT, so this point is moot):

LDL
RFMD
SHPG
HEES
HOLI
SWKS
IDTI
GIII
TUES
AGN
BFR
FB
PRSC

A few of these broke out today on higher volume:  HEES, AGN, PRSC.  SHPG and IDTI never fell below the 50% candle that was generated Thursday, which is generally a good sign.

Strategy:

Monday is an easy day.  No buying for me.  Sell orders are placed.  I most likely will not be watching the markets too closely.  

Monday night's eval of the markets will be interesting.

Make it a great weekend.

~~~~~~~~~~~~~~~~~

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

Regards,

pgd


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.


~~~~~~~~~~~~~~~~~~

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

Wednesday, Sept 24th Update

.
Timer Status:

Short-term timer:  CASH
Intermediate-term timer:  CASH
Long-term timer:  LONG (by a thread, by the way)
Long-Cash Ratio:  0.380, falling -4% from yesterday and 14th decreasing day of last 16
Percent Longs in Database:  27.5%, fell another -0.9%

Slope Table:



Cumulative Tick Chart:


Commentary:

We still have a sea of red on the slope table -- obviously not good for being long in the market.  The Long-Cash Ratio has fallen to 0.38, so for every 38 stocks that are rated "long", there are 100 that are recommended to be in "cash".

Buyer beware.

There is no question that we are oversold.  We can go lower though.  Yesterday's "strength", and I use the term loosely, was not pervasive across all market segments, and was largely window dressing as far as I'm concerned.  As evidence of this I provide the right side of the slope table.  The right side shows that the longest time frames are still accelerating downward, and until we get several strong days (green) for all measured time frames, it is not safe to buy stocks en masse.  Yes, feel free to cherry pick, but I'm a longer-term investor, not a day trader.

Regarding the Cumulative Tick chart, the number of 52 week New Highs is well below the number of 52-week New Lows on the NYSE and this is a huge stop sign for me.  I don't care how oversold we are, until this reverses, I'm not buying.  Period.

A good initial sign is that there was strong buying on the NYSE yesterday.  Not widespread, but for the measured TICK, where I need at least 500 stocks per minute ending the transaction with a bump upward in price, we got it.  We need more of this.

Lastly, the longer-term moving average (red) of the Cumulative TICK is still negative.  Again, bad news.  Until the instantaneous TICK (white) moves above this, it's better to be on the sidelines.

Strategy:

I'm still operating on a 50% cash position.  Stocks and ETFs are being closed, per my GGT recommendations that I calculate nightly.  Many of these have positive balances, and hence, I'm capturing equity:



Green dots above represent new highs for equity, and this is a capture of my TradeStation blotter for all accounts.

I have several pending sell orders for today.  The 1% trailing stop loss, active after 9:45 am ET, works well to capture rising equity prices but skip the opening clearing of the book.  Being sold are full positions in SSO, SPY, ROP, XLB, SIAL, XLF, ABT, and CP.

Check the GGT stock listing, available in the Dropbox folder for a clearer view of GGT ratings.

I have no buy orders pending.  Of course, I have a watch list, and I keep it updated, but I'm not buying anything today.

The earliest that we could see a short-term buy signal would be today, if it is an awesome, +2-3% day across all equity markets (not likely), or back-to-back good days today and tomorrow.  Possible, but who knows?  Your crystal ball is as good as mine.

~~~~~~~~~~~~~~~

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

Tuesday, September 23, 2014

Monday, September 23rd Update

.
Timer Status:

Short-term timer:  CASH
Intermediate-term timer:  CASH
Long-term timer: LONG
Long-Cash Ratio:  fell -23% to 0.519.  STATISTICALLY SIGNIFICANT MOVE
Number % Long Recommended Stocks: 34.2%, dropped -6.1%

Timer Table:


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


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

Commentary:

A significant drop today.  The drop of the long-cash ratio was statistically significant, and from other indicators that I employ, was accompanied by volume.  Pay attention; I'm continuing to raise cash.  Last calculations show that I have about 39% invested and the rest in cash.

Today was a severely bad day for the Cumulative TICK chart.  Selling algos were employed early and continued thoughout the day, exceeding 500 stocks being net sold per minute for over 2/3rds of the day.  The white and red traces tell you everything you need to know.

Strategy:

A number of stocks transitioned to "New Cash", and I'm selling.  No buying.

~~~~~~~~~~~~~~

Standard disclaimers apply.

Regards,

pgd


Friday, September 19, 2014

Friday, September 19th Update

.
.
Timer Status:

Short-term timer: CASH
Intermediate-term timer:  CASH
Long-term timer: LONG
Long-Cash Ratio: 0.675, decreased -5% from previous day
% Longs in the Database: 40.3%, down 1.2% from yesterday

Slope Table:



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

Slope Chart:


Cumulative Tick Chart:



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


Commentary:

Any headway that we made Thursday was given back today.  All the slopes of the Long-Cash Ratio (LCR), which measures the bullish expansion of the stock database, are now again negative.  You can see that in the slopes table (on the left, all red) and in the slope chart, which looks back over the past two weeks.

The earliest we could see a buy signal would be Monday night.

With respect to the Cumulative TICK chart, the selling algos kicked in strongly around 11:33 and finally hit bottom around 1:20 as can be seen in my annoations above.  From that point forward the market essentially went on break, with much less buying/selling going on at the NYSE.

Key here is that we accelerated downward in the 10d EMA on the cumulative TICK, which is causing us to delay re-entry on the long side. 

There is no sense entering the market on either side at the present time -- risk is higher than the reward we could capture.

Strategy:

I'm still operating on a 50% sell signal.  A couple of big names triggered to the "CASH" side with today's action -- AAPL and ORCL -- and hence I'm going to unload those positions with a 1% trailing stop loss.  AAPL is comfortably above the waterline at +5% and ORCL is flat, so net/net will show these trades capturing money.

No buying Monday.

I'm traveling Sunday - Wednesday next week to Redwing, MN.  Writing will be later in the evening (most likely), and if you get the writings delivered to your email box you may realize that the cutoff for this is 10:30-ish PM.  It is doubtful that I'll be back in my hotel room with enough time to make this cut-off, so you'll have to manually check the blog if we are to get a timing signal change.

~~~~~~~~~~~~~~

As with all my postings, you are responsible for your own actions and I am not.  Please do your own diligence, and please take ownership for your actions.

Regards,


pgd

Thursday, September 18, 2014

Thursday, September 18 Update

.
Timer Status:

Short-term timer: CASH
Intermediate-term timer:  MIXED
Long-term timer: LONG
Long-Cash Ratio: 0.711, increased +5% from previous day
% Longs in the Database: 41.5%, up 1.1%

Slope Table:

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



Cumulative Tick


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

Commentary:

I'm seeing more green on the right side of the slope of the slope table above, which means that we're getting closer to a LONG signal.  As you can see on the left side, the 2d has transitioned to green, so the 2d slope is now positive.  I need the 3d and the 5d to turn before the short-term timer will transition to LONG.

The intermediate-termed timer is MIXED, which means that internally, some things are not confirming each other.  We're right at a threshold, where the markets have equal probability of moving up or down.  Literally, we are at the 50/50 point.

The Cumulative TICK indicator shows that all the moving averages are converging to the 10d (red).  Any strength in the market will put the real-time TICK (white) above red, which will pull the remaining averages up with a positive slope.  Once they all have a positive slope entering the market has a good risk/reward.

Strategy:

Get your shopping lists ready.  Here's mine:

AAP
AGN
AMBA
AMRI
APT
ARII
BABY
BBD
BFR
BITA
CAAS
CBK
CMG
CORE
CP
CTP
DAL
DXCM
ENPH
ENV
EW
FB
FNHC
GIII
GILD
HBI
HEES
HOLI
HTLD
IDTI
KNX
LDL
LUV
MAR
MFRM
MNST
NEO
NFLX
NUVA
NVGS
NXPI
OTEX
OVTI
PJC
PL
PRSC
RCL
RFMD
SAVE
SHPG
SKX
STZ
SWKS
TUES
UAL
UEIC
URI
WGP
XCRA

I do not have a buy signal yet, but we're closer.  Most of these are GGT long-rated stocks and are worthy of consideration.  Breakouts are your friend.

~~~~~~~~~~~~~~

As with all my postings, you are responsible for your own actions and I am not.  Please do your own diligence, and please take ownership for your actions.

Regards,

pgd


Wednesday, September 17, 2014

Wednesday, Sept 17 Update

.
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.

~~~~~~~~~~~~~~

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

Regards,

pgd


Tuesday, September 16, 2014

Tuesday, Sept 16 Update

.
Timer Status:

Short-term timer: CASH
Intermediate-term timer: CASH
Long-term timer: LONG
Long-Cash Ratio: Fell -1% to 0.703

LCR Slope Table:


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

Cumulative Tick Chart:


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

Commentary:

The most important takeaway from the LCR chart above is that we are starting to see some "green" on the right side of the table.  We need green over there to see green on the left side -- the left side always lags the right side.

(For your science types, the left side is the first derivative, and the right side is the second derivative.  Science now is concluded for the day).

No "buy" signals yet -- they will not happen until the slopes of the 2d, 3d, and 5d EMAs turn positive.  We're close -- really close -- and another day like today may cause an initial buy signal.

On the other hand, there's nothing bullish about the Cumulative Tick chart.  Nothing.  At the top, red over green means that there are more stocks on the NYSE hitting new 52-week lows than are hitting 52-week highs.  In the middle, there was a buying spree mid-day, but the fact that it remained constant for the majority of the afternoon basically states that the buying faltered.  The bottom graph, which is the Cumulative TICK EMA chart, basically shows that the buying spree kicked in then after 2 pm started to falter (white).  The 10d EMA (red) still has a negative slope, so net-net, more stocks are being sold than are being bought, driving prices down.

Strategy:

Another easy day on Wednesday.  No buy orders, but the shopping list is honed.  Here's a partial excerpt:


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

If you're interested in receiving real-time texting or email alerts when these stocks are higher than the previous day's high by 0.1% AND they are projected to take out the strongest down day volume relative to the past 10 down days, then send me an email at the following address:  p d u n c a n [a t} v t {d o t] e d u  (obviously without the spaces, figure out where the 'at' symbol goes, etc.) and include the following information:

Your full name:
Your cell phone number XXX-YYY-ZZZZ
Your cell phone carrier (AT&T, Verizon, Sprint, etc.)
Your email

I find that these alerts are interesting in the sense that you see who is moving in the market.  I'm running a test on these and they could prove useful.  I reserve the right to disable or change the alert structure at any time in the future ...

At any rate, no buying of stocks for me on Wednesday -- I'm waiting for an entry signal.  I'd really like the Cumulative TICK 10d EMA (red) to have a positive slope before I get back in.  

We'll see when this occurs.

~~~~~~~~~~~~~~~

Standard disclaimers apply.  See earlier posts as well as the left side of this blog.

Regards,

pgd

Monday, September 15, 2014

Close of Monday, Sept 15 Update

.
Timer Status:

Short-term timer: CASH
Intermediate-term timer: CASH
Long-term timer: LONG
Long-Cash Ratio:  0.711, fell another 17% from Friday's value
% Longs in Database:  41.6%, falling

Long-Cash Ratio Table:


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

Cumulative Tick Chart:

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

Commentary:

A continuation from Friday, but this time with more volume on the selling side.  You can't see it in the values above but I see it in some other tools I have and it was fairly significant.  Sometimes, not always, but sometimes volume increases on the downside due to "exhaustion" and this can often signal a turning point.  We'll see.

The LCR can keep going down from here -- and it can stay low too.  A value of 0.7 means that we are more bearish, and reversals (that last) typically do not occur until we get into the 0.3-0.4 region.  I'm not saying we have to go that low to get a market in which to invest -- I'm simply restating the past.  I invest in the market that is presented to me.

The Cumulative TICK indicator chart reveals more of the same from Friday -- everything is moving down.  Don't even thing of investing in anything until that white line is above the red line.

A head's up here:  although we're not yet triggering the "sell the next 25%" of the position, we're getting closer.  If we have a couple more down days like today we may get such a signal.

Strategy:

A large number of "New Cash" recommendations came in tonight on many of my holdings so I've set 1% TSLs, active from 9:45 a.m. onward, to launch tomorrow.  A few are above the waterline, but most are below by a percent or two, so there will be recorded losses.

I didn't even bother to cull my watch list tonight -- no sense in it, as it is impossible for a buy signal to appear before the close of Wednesday (two trading days from now).

While I'll have the workstation open on Tuesday, I doubt I'll pay much attention, as I have other work to tend to.

~~~~~~~~~~~~~~~

Standard disclaimer and closing apply.

Regards,

pgd

Sunday, September 14, 2014

Weekend Update - Sept 14 2014

.
Timer Status:

Short-term timer:  CASH
Intermediate-term timer: CASH
Long-term timer: LONG
Long-Cash Ratio:  fell -19% to 0.862.  The trend is lower.

Timer Table:


Long-Cash Ratio Table:


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

Cumulative Tick Chart:


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

Commentary:

Big picture -- no changes.  The short-term trend is lower.

Friday was a significantly hard down day in terms of the number of stocks that transitioned to "New Cash", so their price action and possibly volume signified a move to the sidelines.  The LCR fell -19% and is now below 1.0, which means more stocks in the database are in "CASH" than are "LONG".  The actual number is 46.3% and means less than half are in some form of LONG recommendation.  Note that we hit 62.5% on 9/2, so we've dropped a good bit since the high after Labor Day.

Lots of red on the LCR table, both on the slope side (left) and the slope of the slope side (right).  Again, we need the right side to be green before we can start buying on the long side.

The Cumulative TICK chart is quite bearish.  At the top on the right the number of New Lows surpassed the number of New Highs on Friday.  Not good.

Just below that is an indicator that I developed which shows what the buying/selling algorithms are doing at the NYSE -- and the downward line almost from the open sent the tone for the rest of the day.  A steady line downward means that stocks were, on net, being sold minute after minute after minute.  Only at the end of the day do you see that this line was horizontal, meaning, nothing was occurring that was out of the norm.

Just below the algo indicator is the Cumulative TICK and EMAs, and basically, the 10d EMA on the cumulative TICK (solid red) accelerated downward on Friday because the raw CumTICK (white) was so negative throughout the day.  Simply do not buy stocks until the white is above red.  Period.

Strategy:

I'm still operating within my 50% cash level at the present time.  I presently hold the following positions across all my portfolios; the ones with " * " have some sort of sell order in place:


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

Last week saw gains and losses being locked in -- I mostly sold those positions that were underwater and took 50% off the table for those positions that were above the waterline.  My equity curve improved somewhat from the previous one (see earlier blog entries):


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

My next signal to dump another 25% is very close to occurring; if Monday is a down day we'll probably see a transition Monday night, so stay tuned.  As far as an "all cash" signal, we're still a bit away from that happening, at least from today's perspective, so as long as next week is "orderly" I would not expect moving completely to cash.  Of course, your crystal ball is as good as mine.

So, with the LCR falling, with the cumulative TICK still dropping, and with more New Lows than New Highs, I'm not buying.  A few GGT stocks have moved into "New Long" territory, but I'm not buying when the rest of the ocean is flowing out of the channel, to mix metaphors.

Monday will be easy.  Orders are placed to unload the remaining positions to a 50% cash/equity holding (using a 1% Trailing Stop Loss - TSL - Good 'Til Canceled -GTC ).  Let the ones moving up continue to do so, but if they reverse, get out.  The ones that are falling, well, get out, obviously.

~~~~~~~~~~~~~

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

Make it a great week.

Regards,

pgd


Thursday, September 11, 2014

Close of 9/11 Markets

.
Timer Status:

Short-term timer: CASH
Intermediate-term timer:  CASH
Long-term timer:  LONG
Long-Cash Ratio:  reversed the downward trend; up +1% to 1.062

LCR Slope Table:

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

Cumulative TICK Chart:


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

Comments:

For the first time in 6 trading days the slope of the LCR slopes, across all measured time frames, has turned positive.  This is shown in the top table on the right hand side -- all the values are positive and green.  This condition is necessary for the slopes to turn positive -- this is shown on the left side of the table.  We are early -- all the slopes are still negative, but the right side tells us that they are LESS negative than yesterday, so we are not falling as fast.

The analogy is that we're driving a car backwards in the driveway and are slowing as we get closer to the garage.  We are slowing in reverse relative to just a few moments ago, so the speed is "more positive" (less negative) than it was a few moments ago.

Think about it.

If this keeps up the left side of the table will turn green, and we'll get our buy signals.  We're not there yet.  Take Friday off and spend time with the family.

~~~~~~~

The bottom TICK chart shows a couple of things.  First, the top panel is the New High / New Low (NHNL) for the NYSE.  We've had two consecutive days of a larger number of New Lows relative to New Highs.  Again, not a good sign if you want to be long in the markets.

The bottom cumulative TICK values show that we're still seeing more selling on the NYSE than buying.  The instantaneous value (white) was virtually sideways all day, within a tight range.  Volume was relatively normal (slightly light) so although 9/11 is certainly important, the traders were on the floor doing what they normally do.

When we see a tightly-ranged instantaneous TICK it's because there is a battle going on between the buyers and sellers.  Today they were evenly matched.

We need the white trace to move above the red trace, which is the 10d EMA of the cumulative TICK.  It may happen on Friday, or it may not.  You guessed it -- your crystal ball is as good as mine.

~~~~~~~~~

Strategy:

I'm operating on a 50% sell signal.  A number of positions fired to cash today, locking in gains or preventing further losses.

I am not a buyer in this market, although I have my watch list established.

The short-term timer will (most likely) be the first timer to convert back to the LONG side, as it does not require the longer time frames of the intermediate timer.  We're closer but not there.

Like today, Friday will be EZ-PZ.  Sell orders are set, no buying planned, and the weekend is ahead of me.  Need to catch up on the documentation but that's what weekends are made for.

Next entry will be Sunday night.

Make it a great weekend.

Regards,

pgd




Wednesday, September 10, 2014

Intra-Day Reversal Not Supported by Data - Sept 10

.
Timer Status:

Short-term timer:  CASH
Intermediate-term timer:  CASH
Long-term timer:  LONG
Long-Cash Ratio:  falling, 6th consecutive day to 1.055

Slope / LCR Table:


Cumulative Tick Chart:


Equity Chart:



Comments:

The strongest day-over-day indicator is the Long-Cash Ratio, or LCR. Despite the apparent reversal of the indexes, and the subsequent reversal of the cumulative tick indicator around 11:00 a.m., the LCR fell for the day which indicated continued weakness.  The slope of the 10d EMA on the cumulative tick is negative, and until the white line (real-time TICK) crosses the red line (10d EMA) from below it does not pay to enter the markets.

Strategy:

I continued to unwind many of my long positions to a net 50% of their original holdings.  The equity curve is now in new territory, as can be seen by the green dots above, and there are further gains to be captured.

I have set 1% trailing stop losses on all positions that are above the waterline that will take the positions down to 50% cash.  Coupled with some of the new "New Cash" entries, total holdings are between 50%-60% cash when all the dust settles.

The cumulative TICK value (white) needs to be above the 10d EMA (red) in order for it to start to turn upwards.  While this is in a down trend, and while the LCR is in a downtrend I am not going to be buying any new positions.  Yes, I have my watchlist (see a few posts ago), but I've not done any position sizing exercises AND until the 2d, 3d, and 5d EMAs on the LCR slopes values turn positive there will be no intermediate buy signal.  At a minimum the 2d and 3d need to convert to green, and this will not occur before the end of the day on Thursday.

All the book keeping is caught up, the orders are placed, so tomorrow (Thursday) will be an easy day.

~~~~~~~~~~~~~~~~~

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

Regards,

pgd


Tuesday, September 9, 2014

Intermediate Timer Moves to Cash - Close of Sep 9

.
Timer Status:

Short-term timer:  CASH
Intermediate-term timer:  CASH (newly transitioned on 9/9)
Long-term timer:  LONG
Long-Cash Ratio:  falling, 5th consecutive day to 1.134

Slope / LCR Table:


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

Cumulative Tick Chart:


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

Timer Table:





Comments

The short- and medium-term timers have transitioned to cash.  The long-term timer is still "LONG".  The cumulative TICK indicator is starting to accelerate downward, with the 10-day EMA of this value clearly holding a negative slope.  This is not good to being long in the market.

 Although you can't see it, the LCR fell -18% relative to yesterday.   This is a large drop, so even though volume was not appreciably high today, a large number of stocks fell significantly in price action.  Read what you want into the lack of volume.

Strategy

In general, with rare exception, I do not buy stocks when the 10d EMA of the cumulative TICK is negative in slope.  I wait for this to flatten out to show that buying is starting to come back.  We're not there yet.

I intend to raise cash to 50% and unload positions (100%) that are below the water line.  Like usual I do this with a 1% trailing stop loss (TSL) which activates at 9:40-ish.

If Wednesday is a strong day up (reversal), I will probably kill any open orders that have not filled that would have taken me to 50% cash.  A reversal will have to be characterized by the instantaneous TICK line (the white one in the figure above) moving above the 10d (the red one) and heading on a positive trajectory upward.

Your crystal ball is as good as mine.  Protect your profits if the market continues to fall.

~~~~~~~~~~~~~~

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

Contact me if you have any questions.

Regards,

pgd

Update - Close of Monday, Sept 8

.
Timer Status:

Short-term timer:  CASH
Intermediate-term timer:  LONG
Long-term timer:  LONG
Long-Cash Ratio:  falling, 4th consecutive day to 1.384

Slope Table:


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

Cumulative Tick Chart:


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

Comments:

No re-enter signal on Monday.

The slope of the 8d EMA of the long-cash ratio (LCR) moved negative against a backdrop of all the slopes of the slopes showing negative.  This effectively negated Friday's attempt at a rally.  We are one step closer to a sell signal, but of course, we are not there.

With respect to the cumulative tick (CT), along with the EMAs on the CT, we have two negative things that are on-going in the short term:

1) the slope of the 10d CT is negative.  The tide is flowing out and boats are falling with the tide.  This is evidenced (independently) by my LCR value.
2) all of the day-over-day CT EMAs are also negative in slope, AND, they are all below the 10d EMA of the CT.

We will need a strong Tuesday to reverse this pattern.  Futures are barely positive as I write this.

Strategy:

No buying today (Tuesday).  The short-term timer is in CASH because the LCR is falling.  Do not buy when the LCR falls.  Wait for the 2d, 3d, and the 5d LCR slopes are turning positive from negative.  Refer to the first table in this entry.  With respect to the LCR "slope" table, you want the right-hand side to reflect GREEN and the left side to transition from red to green.  A new signal will be generated on the day this occurs.

~~~~~~~~~~~

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

Contact me if you have any questions.

Regards,

pgd

Sunday, September 7, 2014

Weekend Update - Close of Friday Sept 5

.
Timer Status:

Short-term timer:  Cash
Intermediate-term timer:  Long
Long-term timer:  Long
Long-Cash Ratio:  dropped for 3rd consecutive day to 1.463

Slope Table:


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

Timer Status:


Comments:

Despite the gains in the market on Friday, I'm not convinced (yet) that we've resumed the uptrend.  A falling long-cash ratio (LCR) means that more stocks are falling below their historical, optimized levels and this is not good for portfolio growth.  If the tide is flowing out then most boats sink lower...

You can see in the two tables above that no progress was made to reverse the signals of the close of markets on Thursday, September 4th.  With respect to the top table, and the right side of the table, we see that the shortest time frames -- 2d, 3d, and 5d -- slopes of the slopes (SoS') did move positive, but this is hardly convincing.  We need strength on all time frames for the SoS' values, and it is not there.

I've been dumping positions that were underwater as well as taking 25% off the positions that were showing some positive gains since the last signal.  Lots of work, as there are 19 different portfolios to manage in real time, but it's what I signed up to do.  The combined equity curve from these portfolios is as shown:


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

The green dots signify new equity highs, and you can see that unwinding some of the losers took me down off those highs.  This is okay; as long as the general trend is from lower left to upper right I'm satisfied and the work is justified.

Strategy

Having raised about 25% cash over the last two days, my strategy is to sit pat for now and let the markets confirm which direction they want to move.  The holdings that I have right now are performing fine and if the market continues higher they will do well.  Here's the holdings dashboard:

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

Until the short-term timer turns positive I will not be adding to any of these positions.  Note that many of them have an "*" by their name; they have sell-orders pending at the 25% level and simply did not trigger on Friday.  They may trigger on Monday -- I don't know.

It's important to keep the shopping list handy though, as we may get a confirming "move back into the market" signal as early as Monday night.  While the following list is subject to change, and is only partial through the symbol SHPG due to the size of my screen, it's been a fairly stable list for a while:


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

To save you the effort of typing in the symbols here they are in total:

AAP
AFSI
AGN
ALK
APT
ARII
BABY
BIDU
BITA
CMG
CO
CP
CTP
CW
DAL
DXCM
EMES
ENPH
ENV
EQM
FB
FNHC
GIII
GILD
HBI
HCLP
HDB
HEES
HOLI
HTLD
IDTI
IG
JBLU
JLL
KS
LAD
LEAF
LUV
MAR
MNST
NEO
NFLX
NVGS
NXPI
OTEX
PEIX
PJC
PL
PRSC
R
RCL
RFMD
SAVE
SHPG
SKX
SNX
SWKS
TPC
TUES
UAL
UEIC
URI
UVE
VTNR
WGP
WRES
XCRA

~~~~~~~~~~~~~~

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

Contact me if you have any questions.

Regards,

pgd