Sunday, March 22, 2015

Confirming 100 Percent Equity Target, Friday, March 20 Close

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Summary:  Friday's action caused the LCR to move positive on all measured time frames.  Correspondingly, this confirms that I should be 100% invested in equities at this time.

Timer Table:



The table shows that we are "long" on all timers -- short term, medium term, and long term.  The "optional actions" column also indicates that when this particular setup has occurred in the past the chances of trades from this point forward being profitable are diminished, hence, adding to my positions at this time is not advised.  So, if I'm not 100% invested (I'm not), then pending buy orders should be canceled or otherwise removed from consideration.



LCR Table:


The LCR table shows that we had a huge day on Friday.  Some of this is certainly due to options expiration, but not all of it.  Friday's action was the 59th strongest LCR move upward since 2008, which is significant.

The fact that the LCR shows that all measured moving averages have a positive slope tells me that we're firing on all cylinders, options expirations or not.

Cumulative Tick:




The cumulative tick, which shows the net buying/selling with an uptick/downtick per min of transactions, rocketed in the early morning and stabilized by lunch/afternoon.  This is a buying chart, and it shows that on net that stocks traded on the NYSE are being bought and are doing so on higher and higher prices.  This is good.

Strategy:



The chart above shows the GGT price index overlaid with the GGT Percent Longs as indicated in the database.  The chart shows a new high in terms of GGT price, and it also shows that we've entered a zone where historically, the markets have pulled back.  This is indicated by the pink zone.

This is not a predictive chart.  It simply shows that the market is entering a zone where a pullback is possible, so buying at this point could be a losing proposition.  This chart is NOT related to the recommendation above that I not buy any more stocks -- but two separate indicators are telling me to be careful here, so I'm not going to chase going to 100% equity until we get some sort of pullback.

It's all part of the game.  Buy breakouts as the market absorbs gains.

I'm cancelling all open buy orders except those that are related to my dividend portfolio (which tries to stay 100% invested unless the long-term signal has transitioned to cash).  Stocks that break out on price AND volume may be purchased, but they will have a marginal impact on percent invested.

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Remember, 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