Thursday, April 14, 2016

Buying the Market - April 13th Close

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Current Outlook

The markets have recovered from Friday's consolidation and are advancing higher.  Bad news from the banks, Alcoa, and others is being shrugged off.  This is a strong market, and I am picking strong stocks.

As of the close of markets on April 13, I am a buyer.  Two primary reasons for this:

  • The Cumulative Tick picture has improved dramatically
  • The Long-Cash Ratio jumped the 72nd strongest amount in about 1800+ trading days that I've recorded.
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Cumulative Tick

The Cumulative Tick is back to almost picture perfect with Wednesday's action:


Click on the image to enlarge.

I described this view in my last blog and in my newsletter, and I urge you to read those details.  The bottom plot shows an expanding cumulative tick and when this is occurring we have a buying market.  I do not want to be caught on the sidelines.  Everything on this chart indicates that the markets are buying right here.

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Long-Cash Ratio Table

The Long-Cash Ratio, or the number of stocks ranked "long" to those that are ranked "cash" or avoid by my system, jumped 37% over the previous day's value of 1.816.  This was the 72nd strongest move in the LCR and while history favors a pullback after this occurs, the pullbacks have been buying opportunities.

The middle of the table is completely green on all measured time frames.  This means that stocks are being bought and are being bought on volume, driving prices upward.  This is a clear entry signal.

The right side of the table foretold me on Tuesday that we could have an opportunity on Wednesday.  The green of the right always precedes the green on the left, and yesterday was no exception.


Click on the image to enlarge.

Strategy

In my personal portfolio I added 6 positions yesterday:

ADC
CMN
EFX
GGG
HPY
POOL

Each is rated "long" by my system and has solid fundamentals as well as current-market characteristics.

A few stocks did not trigger and I will lower my BUY STOP, in accordance with the guidance I put out in my newsletter:

COR
CUBE
GVA
STOR

There are other stocks that look good here too, with THO, ULTA being a couple of them.

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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 GreekGodTrading [ a t ] gmail {d o t] com, making the appropriate changes to the email address, with the word "DROPBOX" in the subject and I'll add your email.  I also ask that you subscribe to this list using the link to the left (if you are on the blog), 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.  The stocks I have listed here are not recommendations -- they are seeds for you to do your own research.

Regards,

pgd