Thursday, September 29, 2016

End of Month-Quarter Window Dressing?

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This past weekend I gave a presentation where I stated it was time to get our shopping lists together.

Of course, as frequently occurs with Friday signals, Monday was a terrible day, effectively reversing the signal on a day-over-day basis:

Click on the image to enlarge.

If you look closely, you can see that the end-of-day (EOD) data for Monday, September 26th, showed that my LCR indicator had completely reset (left side of table, entire row is red-red-red).  This is a signal (to me) that this is not a "confirmation" of the uptrend nor is it an opportunity to enter the markets.  In fact, it literally raised the red flag.  The majority of my stock orders for Monday did NOT trigger and expired at the end of the normal trading day.  This is by design, and is why I only purchase strength.

On the other hand, this past Tuesday and Wednesday, with a focus on Wednesday, have seen significant stability and increase in volume AND prices in the market.  I know this because the only way the LCR table turns "more green" is if more stocks are classified "LONG", and in my system, they need both price and volume increases to achieve this.

This change in buying pressure can be seen with another tool I use, the Cumulative Tick:


Click on the image to enlarge.

If you are not familiar with the Cumulative Tick you should be.  Read the page here.

I've covered the presentation above numerous times in previous blogs.  Top plot:  52week daily high/lows.  Interpretation:  new highs outpacing new lows.  This is good.  This is an overall buying climate.

Middle plot:  Strength of buying and selling.  Trending upwards means sustained buying on a tick-over-tick or minute-over-minute basis.  You can see for yourself that the midpoint of the past two days has been strong.

Bottom plot.  the white trace is the instantaneous cumulative tick.  Moving upward is good, and moving upward above all the other moving averages (in color) is even better.  Whether we sustain the upwards movement is anybody's guess -- your crystal ball is as good as mine.

This is a buying climate, and I have a large number of orders placed for today (9/29).

Strategy

Simple.  I start with Greenfield stocks (read the presentation and listen to the presentation here).

For the Greenfield Dividends portfolio ( https://goo.gl/pKn45X ) I sort the list into Dividend paying stocks.  In general, these stocks are Dividend Challengers, Contenders, and Champions as defined by David Fish (google him).

The stock must be above it's 21d EMA.

Any stock that is rated GGT "New Long" or "Affirmed Long" is slated for purchase if it is not in the portfolio, and re-purchase if it is already in the portfolio.  

My entry price for a BUY STOP is 1.001 x yesterday's high.  The order is a day-order only.  If it does not fill it expires at the end of the day and goes to the expired orders place in the clouds.

I will also slate for purchase any stock meeting a new uptrend criteria that I have developed.  You will see this referred to as my "BT Strategy".  I've not released the strategy for public consumption, but you will see the trades in the Greenfield Dividends portfolio.

The Dropbox file contains a list, updated through September 28th, of all stocks in my universe meeting the Greenfield criteria.  You need to be a member of my Dropbox in order to see that list.  I will not be putting links on this web any more because I cannot track who is downloading and using the data for their paid services (you know who you are).  Disclosure:  IF YOU DOWNLOAD A FILE FROM MY DROPBOX, I SEE THAT YOU DID SO.  Don't be worried about this unless you have something to be worried about.

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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