Wednesday, March 4, 2015

Intermediate-term timer now MIXED; raising more cash as of Mar 4 close

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Summary:  Today's action (close of Wednesday, March 4) shows a continuation of the downward trend I've been discussing.  The INTERMEDIATE-term timer has transitioned to "MIXED", which means internally, indicators are not in alignment to whether we are going up from here or continuing downward.  This occurs when there is not a consensus of trend.  

With the INTERMEDIATE-term trend timer now in MIXED, and not far from CASH, my new target cash level is 50%-67%, or 33%-50% invested.

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Timer Status:

Short-term timer:  CASH
Intermediate-term timer:  MIXED (weak)
Long-term timer:  LONG



Slope Table:


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Discussion:  The Long-Cash Ratio (LCR) fell to 1.300, a drop of -14% from yesterday.  This is within normal daily range for down days and is relatively unremarkable.  More importantly is that all time frames from the 2d through the 34d range are now negative in slope, meaning that stocks are moving to some form of CASH on many significant time frames.  Another day of 34d slopes being negative will most likely cause the intermediate-term timer to move fully to CASH, forcing me to drop to 25%-33% invested and the remainder in cash.

Thursday's action will be important in context of the timers; even if the broad indexes are stable the LCR will provide internal views to the overall market behavior -- to some extent ignore the main indices.

Cumulative Tick:



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Discussion:  The Cumulative Tick is the only reason I'm not dropping my equity levels to 25%.  We are still in a buying market -- the solid red line indicates that net-net, people are buying stocks more than they are selling.  The solid white line, being above ALL of the moving averages, tells me that despite the major index action today (which was poor), everybody ended the day buying.  This is a fine-looking chart, actually.

Strategy:

As indicated above, my new target is 33-50% invested, and for my own personal circumstances, probably closer to 50 than 33.  The weakness of the intermediate-termed timer forces me down from just the short-term timer level, and the LCR 34d slope value being negative gives me pause.  Again, another day where the 34d and all the shorter EMAs remain negative will not be good.

The "tell" is the cumulative tick.  If the white trace were below the red I'd be heading for the doors, but it's the exact opposite.  People are stepping into this market.

I am NOT a buyer on Thursday, under any circumstances.

I have placed a 1% TSL, GTC, active after 9:45 a.m., on my weakest positions and am looking to get down to 50% cash.  NONE of my TSL's triggered today -- THAT is what good stocks do on a otherwise bad-index day.

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Remember, you are responsible for your own investment decisions, and I am not.  Please do your own research, and please take ownership for your actions.

Regards,

pgd