Friday, December 18, 2015

Still no buy signal, but in buy territory

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Hopefully, if you stepped into the market this week you did so with only a few trial balloons or preferably, you looked at what I posted and saw that conditions are not correct for entry.

More of the same going into Friday's open.

The Cumulative Tick still appears weak and indecisive:

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We're not seeing any great buying phase or selling phase.  Tuesday and Wednesday did see some net buying as far as the algos were concerned, but not what I would consider a sustained, everybody is playing.  Thursday's action, despite the hammering on the indexes (which is why I don't watch the indexes except to say they really don't matter), wasn't a big blood bath -- you can see the very tight range of the cumulative tick, which simply indicates a balance in net buying and selling on a minute-by-minute basis.

Note that the white cumulative tick line is near the longer-term heavy red moving average.  When (and if) white crosses red from below we'll start seeing the slopes of all the moving averages start to tick up, giving me confidence to enter the market.

We're not there yet, and this morning's futures are negative.

Speaking of futures, here's the S&P 500 e-mini:

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Top is the e-mini price and bottom is the volume.

You can see that the close of yesterday saw a broad sell-off, effectively erasing the gains of Wednesday and half of Tuesday.  Review this chart in context of the Cumulative Tick for some further insights.

What is probable is that we'll test Monday's lows, hence, I expect more volatility and a bias downward.  If we can do this in a controlled manner I think we'll be okay; if there is a lot of volatility, then it probably will be more of the same, especially as the market dries up next week.

Click on the image to open in a new tab or window.

My Long-Cash Ratio (LCR) table is not indicating that I should be buying stocks.  It's starting to show some signs of getting closer to a buy point, but yesterday's action didn't trigger a buy signal, and frankly, neither did the strong action on Tuesday.

The LCR table also shows that we are starting to see some acceleration to the up side, as shown in the right side of the table.  We need the 2d and 3d slope of the slopes to turn positive with today's action, and if that occurs, we'll most likely get a buy signal into the weekend.

I'll certainly post the status of the process over the weekend and we can see what I plan to do for Monday.  I have my shopping lists ready but as far as I'm concerned, NO BUYING ON FRIDAY.


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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.