Wednesday, February 17, 2016

New Entry Sig-33% Equity Target-Feb 16 Close

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Summary

Action over the past two trading days has caused a whipsaw in the short-term timer, indicating that I should attempt to become 33% invested (67% still in cash).  I'm buying quality stocks today (Wednesday, Feb 17)

Timer Table

Here's the most recent timer table:


The left column is the short-term timer, the middle column is the intermediate-termed timer, and the right column is the long-term timer.

The RIGHT column is the most important -- we are not in an uptrending market, and as such, risk is high on the longer-term.   I'm wrestling with limiting my exposure to less than 25% because the right column is recommending the sidelines.

My money management system indicates that 33% equity / 67% cash is prudent.  Certainly no more exposure than that is warranted.

Of concern is that we are whipsawing here.  This means that we were long, we went to cash, and now the system is back to long (on a short-term basis).  This is a dangerous place to be because we are right at thresholds.  

LCR Table

Part of the picture is that stocks are being bought:


Click on the image to enlarge

I've discussed the details of this table elsewhere in this blog so read backwards a few entries.  If you have questions, ask.

Of importance here is that we're back to the "height" of where we were over the last two weeks, at least in terms of strength of this move upward, so the signal is hard to ignore.  Stocks are still oversold on a historical basis so over the long haul there is plenty of fuel to take us higher.

Caveat emptor, to be sure.  Do your diligence.

Cumulative Tick

The CT verifies that this market is being bought:


Click on the image to enlarge

Tuesday's action saw the white line cross the red line from below, pulling the entire ribbon upward, and indicating that there is strength over the past two days.  If you look closely you'll see it actually started near the end of Thursday's action, so I do think it real.

Strategy

Subscribers of my Dropbox files will see that I have updated the stock file and that I have new purchases pending in the Acceleration and Dividends portfolios.

Subscription is free and instructions are below.

I buy strength.  My setup is as follows:

Determine the price that is 0.1% above the previous day's high.  Set a BUY STOP at that level, effective after 9:45 a/ET.  Orders are GTC.  If the order does not fill, lower the value that evening and try again tomorrow.  Never raise the value once the order is placed (some stocks spike in the first 15 minutes of trading then settle down after the news fades).  Continue the process until the order is filled or the stock transitions to a "Cash"-rated stock (again, see my stock file in the Dropbox).

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Stock updates are posted in a daily file that I attempt to share by the following morning with all subscribers. To review the stocks that you are holding and see how I evaluate them, you need to be a member of my Dropbox.  Send an email to pduncan [ a t} v _ t (dot] e du, fixing the address of course, with the word "DROPBOX" in the subject and I'll add your email.  I attended Virginia Tech many moons ago and it is my alumni address, so it should be easy to see how to fix the address -- simply use "vt.edu".  I also ask that you subscribe to this list using the link to the left, as it's the only way I can communicate with Dropbox users, if the need arises.

Here's how to find me:

InvestFeed/Twitter:  grems8544
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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