Tuesday, February 23, 2016

Intermediate-termed Timer Transitions Long - Feb 22 Close

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Summary

Markets are short-term overbought.  My intermediate-termed timer has transitioned long, which raises my equity target to 67% (and of course my cash target to 33%).  As opportunities present themselves I will add to existing positions and as new stocks meet my criteria, I'll add them.

Timer Table

It will be important for the intermediate-termed timer to remain long if this signal is to mean anything:

When we are at transition points the market can whipsaw the signals, causing back-forth-back-forth movement of the indicator.  This will be something to watch for, and I will post an entry if this happens.

The intermediate-termed timer works by looking at the moving average slopes of the 13d and 34d price of the GGT index.  The GGT index looks like the Russell 2000 or the NAS 100, depending upon market mood.  It then looks at the moving-average slopes of the Long-Cash-Ratio, and if the slopes are moving upward (they are, see the LCR table below), then we can get an entry signal.  This is where we are today.

LCR Table

Click on the image to enlarge.

I've discussed this table in other entries so I'm not going to go into the details.  I've been asked to prepare a video on it and I will.

Simply put, the slopes of the different moving averages of the long-cash ratio indicator are all positive, hence the green on the left side of the table.

The right side of the table shows a sea of green, indicating that on a day-over-day basis, we are accelerating upward in the number of stocks that are moving to a "long" state, which means that they have higher price and volume on a day-over-day basis than they have had historically.  This, needless to day, is a great situation.

We can pull back from here, and since we are somewhat overbought, I think we will.  If the chart above remains intact will determine what I do next.

Cumulative Tick

Click on the image to enlarge.

For the first time this year we have the 52-week new highs (upper plot, green) exceeding the 52-week new lows (same plot, red).  

The CT continues to advance, but yesterday (2/22) saw some coasting overall.  The market is digesting gains and this is healthy.

This is a good chart.  Again, while we may be short-term overbought, there is nothing on this chart to indicate that we should do anything other than buy and hold stocks.

Strategy

Buy strength. 

I'm raising my equity position through buying strength in my accounts, starting with my present holdings and will include new stocks as they avail themselves.

I'm watching for short-term weakness and consolidation.

Join my Dropbox folder to see how my stocks, as well as stocks that you are holding, are doing in terms of my ranking system.  

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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