Tuesday, April 7, 2015

Systems Signals All-In, but ...

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Summary:  the GGT timer system has transitioned to an "all-in" signal, but past history suggests this could be short lived.  I'm starting with my longer-term / more-conservative dividend portfolio holdings first.

Timers:



I missed the signal at yesterday's close due to late travel.  This being stated, it does not appear that much was lost in terms of today's action, as the sell-off at the end of the day negated most gains.

LCR Table:


Right-click on the image to open in a new tab or window.

The LCR table is showing that we're in a good zone for buying.  You can see that on the left that all slopes are positive (green), which triggered the "all in".  On the right we have a good paint of green, again indicating that we are accelerating upwards in terms of the number of stocks, on a day-over-day basis, that are moving from a CASH status to a LONG status.

Taken in isolation, there is nothing in the table above that tells me to be cautionary.

Percent Longs:


Right-click on the image to open in a new tab or window.

If you listened to the weekend recording I discussed how the percent long value within the database can give us some indication of chance of success of trades to the long side.  In the figure above the key takeaway is that the present value of percent longs in the database is still very close to 50%, which you can see is neither in the buy zone (approx less than 44%) nor is it in the sell zone (approx greater than 58%).  This means that we're still quite uncertain in the direction of the possible trade.  I could make an argument that picking some short ETFs here could be prudent.  I'm not doing that in my trading, but I could make a good argument ...

Cumulative Tick:


Right-click on the image to open in a new tab or window.

On the long side, the top right of the figure above shows that we're strongly achieving a number of 52-week New Highs on the NYSE.  This is one of my criteria for buying.

The middle plot, again discussed this past weekend in the webinar and available for download in the Dropbox file, shows that at about 3 pm we started to strongly sell off.  This effectively negated many of the day's gainers.

The bottom plot is the Cumulative Tick.  The long-term CT moving average (red) is moving higher and has a definite slope upward, which is good.  The majority of the moving averages above it are still with a positive slope, which again, is good.  The instantaneous CT value (white) shows the sell-off in the late afternoon, and that pulled a few of the shorter CT moving averages down, causing them to trend downward in slope.

This latter condition is the first stage of a break down.  Your crystal ball is as good as mine, but if the behavior continues then we should not be buying.  On the other hand, pull-backs like this, as long as the LCR and long-term CT are with a positive slope (and as long as we are achieving new 52 week new highs), are all buying opportunities.  It's this latter position that I'm running with at the present time.

Strategy:

I'm a buyer, but I'm going to edge into this one a bit slower than I normally would.  My pause here is due to the percent-long value that is right at mid-scale; if we were down in the green I'd be going all in on this pull-back, but we're not.

I'm focused on my Accelerating Dividend portfolio first, as I typically hold these stocks the longest.  The stocks in this portfolio can be found on the "Dashboard" tab of the shared Excel file in the Dropbox.  Not a member of the Dropbox?  Post a note and I'll send you an invite AND force add you to our Yahoo web site (the latter being the only way I can communicate with you).

I've placed orders to buy every LONG-rated stock in the Accelerating Dividend list, GTC, effective after 9:45 a.m ET, at 1.001x the HIGH of today's market.  Hence, I buy breakouts.   If the stock does not trigger tomorrow then tomorrow night will find me adjusting the BUY STOP to the new (lower) level.

I've also placed orders using the Dividend Champions listing, again which can be found in the stock file.  This time I'm focused on the stocks with a Calmar Ratio that is much greater than 3.0 AND are LONG-rated.  The first criteria indicates how well the stock recommendation is in sync with my system, with the higher numbers indicating greater synchronization.  To save you some hassle here's my buy list (in addition to the Accelerating Dividend list not provided -- you can do a little work here), from most attractive to not-as-strong-as-the-top-stock ...

CLB
SIAL
KR
EFX
ROST
FDS
WGL
MKTX
JKHY
LB
CVS
COR
DIS
OXM
SCI
NKE
AOS
LEA
UDR
ISCA
SBUX
LAD
BR
PFG
BLX
ROP
GK
THG
SNA
MCO
USPH
LMT
MLR

Note that there are some duplicates in this list from the Accelerating Dividends list, which you would expect.

Some of you are receiving breakout emails or text messages.  I will be adding these to my portfolio too, as they occur.  For example. today I added TWTR.  If these are racing away from when the signal occurred I'll typically enter an order at the VWAP and let it be active for only the day.  If a pullback occurs it often is to the VWAP so you may be able to catch a run-away stock before it completely breaks loose.

So, general disclaimers apply here.  You are responsible for your own decisions and I am not.  Do your own diligence, and please take ownership for your actions.

Regards,

pgd