Tuesday, December 22, 2015

Optimistic W, LCR-Price Divergence, CT One Year Ago

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Monday's action on the indexes, which is often misleading, was a bullish "W":


Click on the image to enlarge.

For me this falls into the "too little too late" column, as the Long-Cash Ratio continued to fall, indicating a general weakening of stocks:

Click on the image to enlarge.

While there was some thawing on the right side (acceleration -- see the previous blog entry), and this is a requirement for a turn-around, it certainly was not strong enough to compel any buying on Tuesday.  Note that the left/middle part of the table is still a sea of red, so entering the markets here is not prudent.

The Cumulative Tick isn't showing any significant improvement either:


Click on the image to enlarge.

Again, refer to Monday's blog entry on more details.  The bottom plot is most telling -- a very tight range with no aggressive buying or selling -- something has got to (and will) give.  Nothing on this chart tells me to get into the markets here.

As a comparison, and to answer a question I received over night, here's the CT from one year ago, debunking the statement that we cannot have a strong cumulative tick going into the Christmas holiday season:


Click on the image to enlarge.

As you can see, the left side of the figure could be us today -- white below red on the lower plot, and new 52-week LOWS being made (upper plot on the left).  Then it turned around, with buying starting in earnest and the algos throughout the day showing strong, steady accumulation (middle plot).  Note that this is Xmas one year ago -- and clearly, we can have a strong market climate into Christmas.

I'd like to see some indications of this chart in today's chart -- we simply are not there.

I'm taking Tuesday off and continuing my last-minute shopping.

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Here's how to find me:

Stocktwits/Twitter:  grems8544

Greenfield Dividends: https://www.collective2.com/details/94780986
Greenfield Leaders: https://www.collective2.com/details/94921209
Greenfield Low Beta:  https://www.collective2.com/details/95702992

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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