Friday, May 6, 2016

Strategy and Maintaining My Shopping List

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Leaders are holding up well despite the pullback.  Here's the updated list:

COR
DWA
EBIX
FB
FIZZ
HTHT
LGND
LMAT
LYTS
PAM
POST
SCLN
SFBS
SIMO
SPKE
STS
TLK
UFPI
ULTA
WBMD

The following stocks are still part of the list but are updating at TradeStation, so I don't know (as of this writing), whether they pass the Greenfield criteria:

AEIS
BANC
CENT
ERI
FPRX
PLPM

I intend to avoid the following stocks due to pending earnings release:

EBIX reports on Monday.
SCLN reports on Tuesday
HTHT reports on Wednesday
PAM reports on Thursday

I also reject the following stocks for immediate entry because they already would trigger my exit criteria:

LGND, -2% below the 21d EMA
HTHT, -1.6% below the 21d EMA
TLK, -1.3% below the 21d EMA
WBMD, huge selloff/reversal on Thursday, and is now below the 21d EMA
SIMO, -0.4% below the 21d EMA

Here's the view of the list from my Greenfield Radar presentation:


Click on the image to enlarge.

Detailed field descriptors are provided elsewhere in this blog as well as in my most recent newsletter.

From a group relative strength perspective, they are outperforming the S&P500:

Click on the image to enlarge.

The upward movement of the upper plot, in the upper right corner tells you that the group is moving higher, relative to the S&P 500.  The group price plot is the lower bar presentation and you see that prices are holding steady (meaning that the S&P 500 is falling).

If these stocks are not on your radar then I have no idea what else would be considered "quality" stocks.  These are clearly the best of the best.

In yesterday's blog entry, I mentioned that FB, FIZZ, and BANC were quietly being accumulated, and I gave entry levels for each.  Both FIZZ and BANC fired triggers to enter, although the volume on each was lower than I like.  Give serious thought to the strength that these stocks are exhibiting.

My stop loss for BANC remains a close below $19.87, and for FIZZ, two closes below 45.55.  FB is a bit more tricky, but a close below 116.57 looks prudent as an exit flag.

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Stategy

All this being said, the broader market model is suggesting extreme caution.  To wit:


Click on the image to enlarge.

The LCR table, which I have discussed at length in my latest newsletters, is now fully "red" on the left.  Stocks are falling in price on all measured periods, and until we get some indication of the group hitting a bottom then movement en masse into the market is ill-advised.

My timer table is not saying to exit the markets completely, but certainly, it is recommending that I raise cash to at least 67% of my portfolio:


Click on the image to enlarge.

The short- and intermediate-termed timers are solidly in CASH, meaning we are short-term bearish, and the long-term timer still says we are okay for holding those stocks that we have gain.  No "full" sell signals until the table turns completely red, so we simply are not there yet.

The Cumulative Tick picture is still "long" but on the thinnest of margins:


Click on the image to enlarge.

Again, I cover this presentation in every newsletter so if you are not familiar, then download the latest and get yourself up to speed, as this is a primary indicator for me.

The top trace shows some improvement in the number of stocks hitting new 52-week lows, so this is good.

The middle trace shows a sustained, but short sell-off that happened mid-day and from which we really never recovered.

The bottom trace shows the real-time market, and simply put, the closeness of the white trace, which is the cumulative tick, and the solid red line, which is a moving average that has historically been a good "do not cross" level, is troubling.  This being stated, this is also the opportune time to consider buying stocks, PROVIDED THE LCR TABLE confirms.

It isn't, so I would not get trigger happy on releasing a bunch of long orders.  That's just me though -- do what you think is best.

This final presentation is not one that I post often because it relies on your understanding of the LCR, slope, and what all of that means:


Click on the image to enlarge.

If you are new to GGT or my methods, this will probably read like Greek to you.  Simply bear with me.

The chart above shows the slope of the 8d exponential moving average of the long-cash ratio (LCR).  You saw the LCR presentation above, and if you look at that table, you'll see a solid black box around the 8d slope column.  That data is the chart above.

In the chart above, I've circled the LAST TWO DAYS of the 8d EMA slope value.  They are nearly on top of each other.  They are also hitting local 2-year lows, meaning, we probably are not going much lower.  THIS means that we're due for a bounce, and it is THIS SPECIFIC BOUNCE that often presents a good buying opportunity.  Whether it will be a sustained bounce or dead-cat is unknown.  Your crystal ball is as good as mine.

I doubt today (Friday) will be the broader move up.  I do expect it in the short-term though, and as soon as the 8d ema moves above the horizontal black line we'll have another broad entry signal.  Until then, I intend to stick with the Leader's list only, and then only those stocks that are showing accumulation.

So, aside from watching (closely) FB, FIZZ, and BANC, I'm on the sidelines.  I still continue to hold COR, CTWS, EFX, FIVN, and a position in VIX, as well as a few puts in EBIX, IPHI, and VXX.

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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