Friday, January 23, 2015

New Long Signal for All Timers, 1-22-2015

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Summary:  The strong action on 1/22/2015 has turned all timers long -- short-term, medium-term, and long-term.  Targeting 100% equity investment.

Timers:

Short-term timer:  LONG
Intermediate-term timer:  NEW LONG
Long-term timer:  NEW LONG

Long-Cash Ratio:  0.774, jumped 25% on Thursday, a very strong day.  The 2d, 3d, 5d, 8d, and 13d slopes of the LCR are all pointing upward, with the 8d and 13d newly positive.  This is a buy signal.


The table above indicates that again, we dipped a shallow dip over the last trading month and now conditions are favorable for entry into the markets.

LCR Slopes:


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

The Long-Cash Ratio jumped +25% on Thursday, which is a significant move.  In ranking it is the 157th strongest move since 2008.  Note that the LCR slopes for the 2d, 3d, 5d had been positive, and now the 8d and 13d turning is to be considered a follow-through.

This is my trigger to get back in the markets.

Cumulative Tick:

There was strong buying on Thursday on the NYSE:



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

With the close on Wednesday, the cumulative tick just barely crossed the longest moving average from below, indicating a positive tone to the markets.  As you can see to the right of the "+" symbol, yesterday was strong and now all the slopes are upward.

This is a necessary condition for me to purchase stocks.  This is a (temporary?) rising market.

Strategy:

The obvious question is "which stocks should be considered?

The GGT Stock file, located in the shared Dropbox folder for subscribers, has the latest updates.  Here are the stocks that are quality stocks that are rated "Long":


To save you the time of typing the list, here it is:

AGIO
AMBA
BFR
CARB
CAVM
CORE
DXCM
EVLV
FPRX
HDB
HNI
HPP
ICLR
JNS
LTS
LXFT
PACB
PEB
PLKI
PPC
RCL
SAVE
SMCI
SWKS
TASR
UA
UAL
UVE
VIPS
ZUMZ

If any of these stocks take out yesterday's high plus 0.1% I'm seriously considering making a purchase.

From a momentum / Effective Volume point of view (see www.effectivevolume.com), these are quality stocks that are worthy of entry:

BFR
CORE
VIPS
AAPL *
HDB
SKX *
EVLV
HPP
LXFT
PEB
UEIC *
ZUMZ
SAVE
UA

Note that any stock listed above with a " * " means that it is not a GGT long but is a serious candidate.  Also note that AAPL reports earnings in 4 days and there is a significant movement into the stock occurring.

These stocks are beaten down but again, have great fundamentals.  Unfortunately, they are not rated GGT "Long" except for RENT, which has been moving upward for the past 2 days and is a relatively new entry to my list (it is rated "Affirmed Long").  All the others are in a CASH status but are improving rapidly.  They also are quite strong in terms of EV.

LEAF
RENT
SAIA
EPAM

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Any stock that breaks out today from the lists above and that are GGT "Long" of some sort will most likely be purchased.

I typically purchase if the price goes over 0.1% of the previous day's high.  I also like to see volume above the 10-day volume of the greatest drop in price, e.g., the buying today is stronger than the selling over the past 10 days.

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As always, these are not recommendations.  You are responsible for your own decisions, and I am not.  Please do your own diligence, and please take ownership for your actions.

Regards,

Paul






Sunday, January 11, 2015

Still on a 33% Equity Signal, Close of Friday, January 9

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Timer Status:

Short-term timer:  CASH
Intermediate-term timer:  MIXED and WEAKER
Long-term timer:  LONG
Long-Cash Ratio (LCR):  0.687, falling


As you can see above, the short-term timer is in cash and has been so since the beginning of the year.

The intermediate-termed timer is in "mixed" status, which means that internally things are not confirming.  This occurs in a weak and/or uncertain market, and basically, on an intermediate term basis (2-6 weeks or so), we're really choppy and if this is your typical holding time frame, you're probably better off in cash.

The long-term timer is still long, so on a 1-4 month time frame, we're still in positive territory.  It's important though to understand DELTAs, and this is what the next table does:

Long-Cash Ratio (LCR) table, aka the "slope table"



From the left:

The long-cash ratio (LCR) is at 0.687, which means that for every 1000 stocks that are recommended to be in CASH, only 687 are recommended as potential candidates (subject to further screening).  The key here is that the trend is downward, except for 1/7 and 1/8, so the market trends are not with us.

This is not a buying climate, at least not yet.

The left side of the table, which is red, simply tells me that on multiple time frames that the LCR slopes are negative, e.g., more stocks are moving to CASH recommendation on a day-over-day basis relative to stocks that are moving LONG.  If you believe that a "rising tide lifts all boats" then the ebbing tide is lowering all boats -- this is what we're seeing now.

More importantly is the right side of the table -- we had two solid days upward BUT you can see that the slope of the slope, or the change in slope on a day-over-day basis, was mixed to negative.  This isn't good, and it certainly is NOT buying time.

Cash is king, at least in my portfolio.  You do what you want.

Just to stir it up a bit is the following:

Cumulative Tick Chart:


Despite recent performance in the markets to the downside, this set of indicators tells me that the markets are buying, at least in an underlying sense.  From the upper right:

1) the green line over the red line tells me that the 52 week New Highs is greater than the 52 week New Lows on a daily basis.  This is necessary for me to buy stocks.
2) in the middle graph, you see the reversal in algorithmic buying, which ended up with a positive slope for the day.  This too is a good sign

In the lower pane, note that

a)  note that all the slopes are positive.
b) note that white is over red, e.g., the short-term instantaneous cumulative tick is above the moving averages.

Both of these indicators are good.  Hence, the "gates" are enabled, but we are still weak in the markets.

Strategy

I'm targeting 25%-50% equity with the rest in cash.

With the Cumulative Tick setup above, we're a go for buying, BUT, I need to see the LCR stabilize and start moving upward.  It's not doing that, so as far as Monday is concerned, I'm not buying.

Take the day off and enjoy something else.  If we see positive action Monday then we'll probably get a buy signal.  I'll post if that occurs.

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Regards,

pgd


Monday, January 5, 2015

Signal Change, Close of Monday, Jan 5

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Short entry here since I'm traveling.

With the close of markets today the intermediate-termed timer transitioned to "Mixed" mode.  This is an early warning sign, and continued dropping in the markets will most likely cause this to move to "Cash".  We're not there yet, but it's close:

The table indicates that the short-term timer also transitioned this past Friday, so clearly, it's time to raise cash.  I'm dropping back to 66% invested with the signals indicated above.

The LCR table is still strong, despite the intensity of the sell off from today:


Noteable is that out of nearly 1000 down days recorded, today was the 57th strongest down day in terms of LCR (Long-Cash-Ratio) change.  This is significant.

Strategy:

Simply put, the short-term signal combined with the "mixed" intermediate-termed timer indicates that we should be 33-66% invested.  I'll get there by selling my weakest positions, and I'll use a 1% trailing stop loss, GTC, effective after 9:45 a.m.

Regards,

pgd