Tuesday, May 26, 2015

Raising Cash, as of close of Tues, May 26

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Short note here -- I'll elaborate more this week.

With the close of markets today we're back to raising 67% cash.  The short-term timer as well as the intermediate-termed timer have both transitioned to CASH.  The long-term timer is long, but certainly weaker.

My strategy is simple:

1% trailing stop losses, GTC, effective after 9:45 ET
Sell weakest positions first -- the further underwater they are, the faster they will be on my sell list.

66% is my equity target.  Right now I'm about 77% invested, so I'm looking to unwind about 43% of my holdings.

Standard disclaimers apply.

Regards,

pgd

Friday, May 15, 2015

Signal Transition - Short-term timer fires LONG; Close of Markets May 14

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NOTE:  Please subscribe to this using the "Follow by Email" link to the left.  Nobody gets your email except me, and I promise that I won't email you.  It helps me see the number of folks reading this as well as ensuring you get the signals on a timely basis.  If you miss a signal this system will most likely produce sub-par results, which isn't my fault.


Summary:  The short-term timer has transitioned to a LONG status.  This reduces the cash target from 66% to 33%.  Time to deploy capital.

Timer Status


With Thursday's action, we were pushed over the top and now the short-term timer is LONG.  The combination of both the short-term and long-term timers being LONG indicates that we should be buying the markets at the time, with a cash target of 33% / equity target of 67%.

LCR Table


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

The transition of the 5d and 8d to "green" kicked the short-term timer into gear.  The green on the right side of the table gave me confidence to start buying.

Cumulative Tick


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

The cumulative tick chart above is as of 11:49 a.m ET on Friday.

The trend since the 5/12 low has to come off the bottom in a controlled manner.  Overall, the transition of the "white" above "red" in the cumulative tick pattern shows me that buying is continuing today although the indexes are not showing the gains.  I like this setup, and I'm working hard right now to identify positions and place appropriate orders.

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Strategy

As always, I am placing BUY STOP orders on all candidates.  The level for the buy stop is 1.001% above the previous high.  The order is active after 9:45 a.m. ET.  If the order does not fill then I reduce the buy stop to the next level, provided that the stock or ETF still has a GGT long recommendation.

Pickings are thin right now, so I'm having to double up on size of positions in the transition from 33% equity to 66% equity.  This is okay, but it's not ideal.

All watchlists are updated and are in the shared Dropbox folder.  Stock and ETF transactions are also in the shared Dropbox folder.  If you are not a member, send a note to me at pduncan [ at } v % t } dot [ e d u   (fix the address as necessary - I messed it up because of the web bots who crawl for email addresses).  Use "DROPBOX" in the subject field.  Also expect to be added to my Yahoo! group, as it's the only way I can communicate with you.

Most of you know I attended Virginia Tech many years ago so the vt.edu after my name should be obvious.

Regards,

pgd




Tuesday, May 5, 2015

Quick Update, as of May 5 Close

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NOTE:  Please subscribe to this using the "Follow by Email" link to the left.  Nobody gets your email except me, and I promise that I won't email you.  It helps me see the number of folks reading this as well as ensuring you get the signals on a timely basis.  If you miss a signal this system will most likely produce sub-par results, which isn't my fault.

Summary:  Tuesday's action was strongly down in terms of sustained selling.  While the talking heads will point to a number of reasons, it mostly is irrelevant.  Trade the markets presented and don't try to anticipate the action.

Timer Status:



Both the short-term and intermediate-term timers are in CASH, indicating that I should be 66% in cash.  Note that the long-term timer is close to transitioning to CASH, so we may be oversold and could bounce here OR we're going to continue lower.  There is plenty of room to go lower.

Percent Longs


I've been harping that we needed to "reset" to the green zone as shown above in order to have a valid buy signal (when it occurs).  With today's action we've moved to 40% long-rated stocks in the database, so we're entering a good area.  I'd like to see it lower from here, with a good hook upward when the buying starts.   We're not there right now.

Long-Cash Ratio Table



The left side of the table -- the slopes -- indicates that we're moving lower on a day-over-day basis.  This is not a buying market at the present time.  The row of reds on the right side of the table shows that today's action caused an acceleration downward in the number of stocks moving from LONG to CASH, and again, this is not a buying market.  'Nuff said.

Cumulative Tick


This chart tells us that we should be defensive, not offensive.

Aside from the top plot, which shows that the number of 52-week New Highs is BELOW the number of 52-week New Lows, the lower plot is telling us to stay away from new positions.

The lower trace has a downward-sloping red trace, which is the cumulative tick trace averaged over about 10 days.  This negative slope means that on a day-over-day basis there is far more selling than buying, and hence, not a good entry point.

I'm waiting for the white trace, which is the real-time cumulative tick, to rise above the red cumulative tick trace.  Once this happens we'll start pulling the longer (red) trace upward, and finally, it will have a positive slope.  Until this occurs it's not worth buying this market.

Strategy:

66% cash position is my target.  What's yours?


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Standard disclaimers apply.

Regards,

pgd