Monday, February 29, 2016

Parity

.
If you are on the blog page, please subscribe to this using the "Follow by Email" link to the left.  Having your email helps me see the number of folks reading this.

Summary

Buying continues despite the back/forth motion of the prices.  Two of three timers are "long" and indicating that on a short-term and intermediate-term basis we should be looking to the long side.  We have achieved, since late November/early December, database parity, which means that we have equivalent numbers of cash-rated stocks as well as long-rated stocks.  Simply put, we've come a long way in a short period of time.  I'm wanting to add to my positions, but we're overbought.  Patience...

Percent Longs

Click on the image to enlarge.

The chart above shows the percent longs in the database.  We just crossed 50%, and given that we were in single-digits in January, many, many stocks have moved upward in price and volume.

The "cloud" I'm watching is that blue line I've drawn.  Artificial -- yes.  Does it mean anything?  Probably not, because it's not a ceiling that is watched by anybody.  BUT, the constant lower highs since 2013 that show turns downward cannot be ignored.

1) we are between the pink and the green zones, which is a good short-term indicator that whatever direction we're in will most likely continue.  We're heading up, so I expect to head up.
2) when we get between 55-60% longs I'll not be surprised if we start a pull backwards.

So, a bit about buying:  the chart above also indicates that it's generally not a great idea to add to buys when we're in the zone between the pink and green areas.  We made most of our purchases when we were below the bright green line, and that's been a great decision in the past.

8-Day Slope of the Long-Cash Ratio Moving Average


Click on the image to enlarge.

The chart above *IS* actionable.  The 8-day EMA of the LCR has been a really good canary to getting into the markets, as well as getting out.  This is a short-term signal, so when it's really positive, the changes of going higher are limited.  We've had a long series of up days, and while it certainly can continue -- take a look at the chart.  We've not moved higher than present levels and stayed there for any major length of time, so risk is certainly high right now.

Take away:  Be careful buying stocks right now -- we've had quite a short-term run upward.

Timer Table


I was somewhat concerned about the Intermediate Termed Timer switching over, and the moving backwards, then forwards again, but 3 days usually works well overall.  It could change any day (see above), but for now, 33% is the target cash level.  If stocks are attractive I'll buy a position.

Cumulative Tick


  Click on the image to enlarge.

This cumulative tick chart continues to look mixed to good overall.  The last two days have been so-so in terms of algorithmic buying, but Wed/Thurs of last week were very strong buying sprees.

In the end, the positive slope of the solid red line is a great indicator -- stocks are being bought, at least on a short-term basis.

Long-Cash Ratio Table














Click on the image to enlarge

I've described this table elsewhere so I won't elaborate too deeply.  On the left we see that the LCR -- the ratio of the number of longs to the number of cash-rated stocks -- is now at parity.  Woo woo!

The next column shows a long series of up days in the LCR -- this is indicative of constant buying driving prices and volume upward.  This shows that we've moved from about 200 stocks to 1500 stocks that are "newly" long in a very quick period, which is the resilience of the market off the bottom.  No way to read this except as strength.

The sea of green in the middle to the right sides of the table show that on all measured time frame that we're heading upward.  This too is great.

Strategy

I'm targeting 67% equity / 33% cash, but we're overbought right now.  I'm not overly interested in buying right here.  This level is driving by my timer table.  The timer table is driven by the LCR.

The LCR table is a sea of green.  It can't last forever, but for now there is no weakness in buying.  If a stock looks good a trial position may be okay.

I continue to watch stocks that are showing great fundamentals, those that pay a dividend, and that are long-rated.  The full list is in my dropbox file -- instructions on how to get it are below.

I have one portfolio that is sold on GGT recommendation, the other that is sold on recommendation as well as fundamentals.  I've had to sell NEE, MATX, and KIM due to bad fundamentals after the last earnings report and GGT signal.

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.

~~~~~~~~~~~~~~~~~~~~~~~~~

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
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

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




Tuesday, February 23, 2016

Intermediate-termed Timer Transitions Long - Feb 22 Close

.
If you are on the blog page, please subscribe to this using the "Follow by Email" link to the left.  Having your email helps me see the number of folks reading this.

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.  

~~~~~~~~~~~~~~~~~~~~~~~~~

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
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

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

Thursday, February 18, 2016

Continuing to Buy for the Short Term - Equity Target 25-33 percent

.
If you are on the blog page, please subscribe to this using the "Follow by Email" link to the left.  Having your email helps me see the number of folks reading this.

Snapshot
We could be entering the 4th day of gains for the broad market, which puts it beyond simple short covering.  I bought stocks yesterday, and will be buying a few more today.  Indicators continue to show increasing strength.

Long-Cash Ratio Table
We have further gains -- more stocks transitioned to "New Long" on Wednesday than any time this year.  This means both price and volume went up significantly for those issues.

Click on the image to enlarge.

Regarding the LCR Table, I've described it in other blog entries so please review past ramblings to familiarize yourself.

Cumulative Tick
Continued buying.  Same situation as the LCR Table explanations -- I've detailed what this chart means and how to interpret numerous times in recent history -- read backwards a few entries and you'll understand.  I also posted a video over the weekend which covers it.

Click on the image to enlarge.

Timer Table
Continue entering positions on a short-term basis.  Investment level targets for me are between 25% and 33% due to continued high risk of failure of this signal:



Recent Orders
I entered 5 new positions on Wednesday:






Entered Filled/Canceled Symbol Stop Filled Price Link to Analysis
2/17/2016 7:31 2/17/2016 10:07 BSET 29.02 29.36 https://goo.gl/wqziDt
2/17/2016 7:32 2/17/2016 9:44 CR 48.45 48.96 https://goo.gl/fgp6ez
2/17/2016 7:41 2/17/2016 9:49 EQM 69.16 69.47 https://goo.gl/jxIaV8
2/17/2016 7:51 2/17/2016 9:53 KIM 26.83 26.84 https://goo.gl/7nuFuP
2/17/2016 7:54 2/17/2016 9:44 ORIT 16.23 16.25 https://goo.gl/lkavgI



I have a number of orders pending for today.  Again, I buy strength, not weakness, so if a stock did not take out the previous day's high by 0.1% the order will remain unfilled.

Strategy

Pretty simple.  I reviewed "New Long" recommendations in my stock tracking system.  Subscribers to my Dropbox have free access to that firehose (lots of information in that file).  Those that met REV and EPS growth criteria, while having a good history of growth, are good candidates.

Note that I'm buying for the longer term.  The stocks I entered above will remain in my portfolio until they change in their growth criteria.  All have reported earnings for this quarter so I'm not expecting any new news until April.  I'll sell on a case-by-case basis only.  I'm slowing my portfolio turnover rate and intend to hold these because of their dividend status and underlying good quality background.

I'm certainly not recommending that you buy these stocks.

It's important that when a signal occurs to enter (or to exit) that it is done quickly.  My goal is to get to 25-33% invested fairly quickly, then let the noise settle down.

~~~~~~~~~~~~~~~~~~~~~~~~~

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
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

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






Wednesday, February 17, 2016

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

.
If you are on the blog page, please subscribe to this using the "Follow by Email" link to the left.  Having your email helps me see the number of folks reading this.

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).

~~~~~~~~~~~~~~~~~~~~~~~~~

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
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

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

Sunday, February 14, 2016

Weekend Update - Sunday February 14

.
If you are on the blog page, please subscribe to this using the "Follow by Email" link to the left.  Having your email helps me see the number of folks reading this.

Meeting Stuff

First, thanks to all who attended the face-face presentation on Saturday.  Notes are here if you did not get a copy.

The GoToMeeting session was recorded and a can be viewed by clicking here.

Overview

With the market behavior Thursday evening, the short-term signal is cancelled and we have a complete move to CASH as our target.  No new buying, and when we get a new short-term entry signal, no more than 25-33% in equity.  We're not there yet so Tuesday is a light day (Monday is a holiday due to President's Day).

I've recorded a video that gives a high-level overview of how to use my Dropbox files and what the present climate is showing:



Strategy

Short/Medium/Long-term:  Cash is king.  Anything else is pure speculation, with serious downside risk.

No new buying on Tuesday, no matter what the market does.

Dropbox files have been updated, so do your homework.

~~~~~~~~~~~~~~~~~~~~~~~~~

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
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

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

Friday, February 12, 2016

Buy the Dip? Not so fast....

.
If you are on the blog page, please subscribe to this using the "Follow by Email" link to the left.  Having your email helps me see the number of folks reading this.

Meeting Announcement

We will be holding a face-to-face meeting on 2/13/2016 (tomorrow, Saturday) for all interested parties at the following location:

Burke Centre Library
Room: Burke Centre Meeting Room 116K
Address: 5935 Freds Oak Rd, Burke, VA 22015
Library Phone:(703) 249-1520
Time: 10:00 AM to 1:00 PM
Meeting Start Time: 10:00 AM

I will attempt to stream the meeting audio, and perhaps video, as per past meetings, via GotoMeeting.  Attendance via GotoMeeting (GTM) is limited to the first 25 call-ins.  The ability to do this is completely controlled by the library and I have no say in Internet access.

To obtain the GTM information, you must be a member of my closed Yahoo! group.  Send a note here:

greekgodtrading-subscribe@yahoogroups.com

Summary

Thursday's action was strong enough to signal that a broad move to the sidelines would be prudent for Friday and beyond in the near term.  Futures are higher due to the OPEC agreement to curtail production, and I intend to use the day to reduce short-term exposure.

From a medium/long-term perspective with my timing systems, I am on the sidelines.

From a long-term perspective in my non-GGT portfolio, and have limited exposure.

Long-Cash Ratio (LCR) Table

Frequent readers will know the context; new readers will have to dig back a few blog entries to understand the LCR.

My LCR table has taken on a fully-bearish stance:

Click on the image to enlarge.

The middle of the table indicates confirmation that I should be on the sidelines; the right side of the table shows that we started getting signals a week ago on 2/5.  The action of 2/5 and 2/8 certainly indicated weakness and my buying this week was suspended pending the downturn.  It's difficult to buy stocks that are appreciating when the tide is flowing out of the bay.

The red on the left, the solid red in the middle, and the red on the right indicate that stocks are being sold en masse on lower prices, and although not shown here, many are being sold on substantially higher volume.

Although there certainly are bargains, I do not plan to purchase quality stocks until we see some stabilization (green) on the right side of the table.

Cumulative Tick

Simply put, the CT transitioned to a bearish mode early on 2/8 and has been on that side of the table all week:


Click on the image to enlarge.

Thursday's action was a hard sell and was confirmed by the middle plot, which shows sustained selling, with over 500 stocks per minute ending in a downtick (lower price for the next bid/ask sequence) on the NYSE.  This is significant and often shows algorithmic buying/selling -- selling in this case.

The running cumulative tick presentation on the bottom of the figure tells me to simply avoid buying.  The white trace, which is the instantaneous CT, is pulling the moving averages down on all time frames.  This is a selling environment, and until we see the white trace move upwards, I'd be wasting my money at entering the market right now.

There are more sellers of this market than there are buyers.

Strategy

I'm selling stocks that are transitioning to GGT "New Cash" recommendations in all portfolios except my Accelerating REV and EPS portfolio.  That portfolio does not use the GGT timing system as buy/sell recommendations at the stock level, although I hold off buying until I see some uptrend in the CT and the LCR.

I'm holding quality stocks across the board but many are getting beat up.  I intent to continue to hold until they 

1) transition to a "cash" recommendation, per my GGT system, or
2) show a decelerating EPS or REV value on a trailing 12 months basis and THEN transition to a "cash" status.

I'll talk more about this in my presentation tomorrow at the library.

~~~~~~~~~~~~~~~~~~~~~~~~~

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
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

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

Monday, February 8, 2016

Latest Short-Term Entry Signal Under Pressure

.
If you are on the blog page, please subscribe to this using the "Follow by Email" link to the left.  Having your email helps me see the number of folks reading this.

Meeting Announcement

We will be holding a face-to-face meeting on 2/13/2016 for all interested parties at the following location:

Burke Centre Library
Room: Burke Centre Meeting Room 116K
Address: 5935 Freds Oak Rd, Burke, VA 22015
Library Phone:(703) 249-1520
Time: 10:00 AM to 1:00 PM
Meeting Start Time: 10:00 AM

I will attempt to stream the meeting audio, and perhaps video, as per past meetings, via GotoMeeting.  Attendance via GotoMeeting is limited to the first 25 call-ins.  The ability to do this is completely controlled by the library and I have no say in Internet access.

To get the GotoMeeting information you must register with my Yahoo! group:

GreekGodTrading@yahoogroups.com

If you are a member I'll post the info later this week.

Summary

As I write the market is setting up for ugliness this morning.  Futures are down hard, so I expect the positions that I hold to be under pressure.  We are still within a short-term buy but longer-term cash signal (33% invested, remainder in cash), so the present weakness should be no surprise.  Buying will be opportunistic and only if it meets conditions.

Long-Term View

Cash.  I have a large amount of cash and am on the sidelines.  My money management guidelines are pointing to 33% equity / 67% cash right now.   With little exception any positions that I hold (aside from cash-secured puts) are dividend-paying stocks with historically good track records.

Cumulative Tick

The cumulative tick indicator is a short-term indicator.  It does nothing for the long-term view of the markets.

Friday's CT presentation shows that the sell-off was broad and deep:

Click on the image to enlarge

The middle trace shows that algorithmic and/or strong selling started at the open and was more/less constant until the mid afternoon.    The impact on the present signal can be seen in the lower plot -- we are within a close range to the white, instantaneous cumulative tick dropping below the red moving average, which will pull everything downward.  If white crosses red from above we could certainly retest the lows of January.

This chart suggests to me that I should not be entering any positions.

LCR Table

The LCR table provides me a short-term and intermediate-term view of the markets.

Presently, the LCR table is showing short-term weakness in the present buy signal:

Click on the image to enlarge

On the left side, for the first time in weeks, the LCR moved downward.  This weakness was not overly strong but it stopped the run upward.  The LCR fell to 0.358, and although one-day-does-not-make-a-market, I take it as a warning shot over the bow.

Combined with the CT presentation, we are certainly under selling pressure.

The middle of the table shows the first sign of red in awhile.  This "red" means that the slope of the 2d LCR is downward, so on the shortest of measured time frames we have weakness.  The rest of the slopes are still positive, which is good but as you can see, the values are less than Thursday's values.

The right side of the table shows the first deceleration of the LCR in some time, again on all measured time frames.  Continued "red" on the right side of the table will bring red to the left side, and this will negate our short-term buy signal.

Strategy

My long-term view is unchanged.  Cash is king.

On a shorter-term basis, my existing positions are going to see weakness.  GGT "New Cash" signals fired for the following holdings and I need to decide if they are in a "follow the sell signal" or "hold due to dividends and yield" category:

CTSH
CUBE
HEI
IOSP

I've linked the symbols to their charts; if you click through you should see why I really like CTSH (no dividend but EPS growth is perfect) and HEI.

I've done an analysis on CTSH and HEI and you can find them here and here respectively.  Not recommendations to buy/sell/hold, and of course, do your own diligence.  CTSH announces earnings today (Feb 8) and HEI on Feb 23rd.  CUBE announces earnings in 10 days (Feb 16) and IOSP in 8 days (Feb 16).

Looking forward, my position in SSS is probably next to fire a "New Cash"; we'll see how today goes.

~~~~~~~~~~~~~~~~

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
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

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




Thursday, February 4, 2016

A Tale of Two Mindsets

.
If you are on the blog page, please subscribe to this using the "Follow by Email" link to the left.  Having your email helps me see the number of folks reading this.

Summary

The Long-Cash Ratio (LCR) value continues to strengthen, indicating that buying is occurring, driving both individual price and volume upward.  The buying is selective though, because average prices are not in sync.  This is a cautionary indicator which supports the present call of being on a short-term buy signal but longer-term "raise cash" signal.

Price Slopes

As you probably can imagine, I have numerous indicators with the system that I don't expose on a daily basis -- not because of anything proprietary, but simply because too many indicators causes too much noise.

In the end, price is what matters -- it's what we bank, it's what we retire with, and in the end, it's the end goal despite the myriad of ways to get to higher prices.

One of my indicators is a parallel of the LCR table -- it's a price slope table.  The construction is simple:

1) take the average, equal-weight prices of all the stocks in the database.
2) apply various exponential moving averages (EMAs) to the price series
3) look at the slopes (rise, fall) of the individual EMAs
4) look at the rate-of-change of the slopes, which is also known as acceleration.

Doing all of that magic, we have the following conditions:

Click on the image to enlarge.

The left side presents the slopes of the moving average of prices, and the right side presents the rate of change of the slopes.

For the left side, green means a positive (upward-trending) slope, which means prices are increasing.
For the right side, green means a positive acceleration upward in the rate of change, compared to the previous day, which means that if the right side has lots and lots of green, we will start seeing green on the left.

We don't have this scenario.  What we do have is a bunch of noise -- some days prices move forward, some days they move backwards.  You can see this on the left side of the table.  This being said, the right side looks relatively solid -- lots of attempts at moving higher, but only to be negated the next day or so.

As a comparison, here is a chart from 2014.  This is 2014, 2 years ago:


Click on the image to enlarge.

The key takeaway here is that the red/green at the top of the right side of the table eventually set up the sea of green on the left side of the table (area "1" led to area "2").  Note that during the period of rising prices (area "2"), we saw the right side of the table go back and forth -- this is normal market behavior as the market digests gains (area "3").

Again, we don't have this.  Prices are struggling to move higher, despite the attempts of the market to force things higher off the lows.

As I stated above, the rally off the bottom is selective, not broad.  How do we know this?

Long-Cash Ratio Table

The LCR table measures the number of stocks in a "long-recommendation" state, e.g., they have price and volume growth, relative to the number that are in a "cash-recommendation" state, e.g., those that have decreasing prices with or without volume.

Here's the LCR table:

Click on the image to enlarge.

Of significance here is that that despite the market's gyrations in price, we now have had 10 consecutive days of day-over-day gains in the LCR.  If you look back at 1/21/2016 you'll see that the LCR was at 0.085, which means that I was recommending that only 238 stocks in the database were worthy of our hard-earned money, while 2785 were in some form of decline below their historical performance records.  Note that 1/21/2016 is one day off the bottom as I measured it, and we've climbed steadily since.

We are now at 769 to 2243 stocks, or a LCR value of 0.343.  25% of the stocks in the database are now in a "long" status, and this value has been growing on a day-over-day stance.

Here's the "so what?":

The LCR gives us a view that stocks are either being acquired or sold.  Right now the growth of the LCR, as shown on the left (increasing green in the slope portion) tells us to actively be acquiring stocks.  In fact, I'd say that we're a bit deep into this present cycle so we may be a few days late for the initial entry.  That being said, note that the RIGHT side of the table showed a whole-bunch-of-green before the LEFT side of the table turned.  I've written over and over about this -- we have a view that we can enter the market at turning points -- and the LCR gives us this view, independent of what we see the major indexes doing.

(I hate the major indexes, just like I hate my own GGT average.  NONE of the price indexes, including my GGT average, give the full picture.)

Cumulative Tick

The CT resumed it's upward trend, indicating broad buying on a short-term basis:


Click on the image to enlarge.

Wednesday started relatively ugly with a jump of new 52-week lows (upper trace).  Mid-day the algos started buying the dip, resulting in sustained buying that pulled sentiment around (middle trace).  The CT (white) and the longest moving average of the CT (heavy red) are positively trending upward, pulling the other moving averages upward with a positive slope, so there is a clear indication that folks are buying, ON THE SHORT TERM, this market.

Of course, today could see a reversal.  Your crystal ball is as good as mine.

Strategy

Having established that a) the indexes and GGT price index is flat and choppy, that b) the market is being bought as far as selective stocks, and c) the market is resuming an uptrend, now what?

I'm buying what I consider quality stocks with good fundamentals.  My combined holdings, in all portfolios, are with the following stocks:


Duplicative symbols appear because they are in separate accounts.  Note my entry into NHTC is probably an error in judgment on my part -- we'll see.

I also own some CSPs, which are doing okay:

Symbol                     Position Open P/L %
WBA 160219P70     Short            0.00%
FSLR 160219P57.5     Short            77.84%
BURL 160219P44     Short            35.29%
ADBE 160219P85     Short            31.69%

These expire in February and I still have time to decide what to do with them.  I purchased these at the recent market bottom when the LCR was in single digits but we saw lots of green developing on the acceleration portion of the LCR table, giving me some indication that the local-bottom was forming.  These positions allow me to collect some premium to boost overall performance.  I would not mind if these stocks were put to me when we hit expiration, but I think the likelihood is very low at this point (except for WBA).

For those of you who are following the "greenfield" methodology that I've developed and read the blog from a few days ago, here is the greenfield presentation for my holdings:


Click on the image to enlarge.

Note that I've included estimated earnings report dates/times, and sorted the list accordingly, so be careful if you consider any of these stocks for purchase.  Do your own homework -- I'm not recommending that you follow me at all.

Field descriptors for the greenfield chart above can be found on this blog entry.  CTWS is the only one that has marginal volume -- all the rest meet my overall criteria.

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

Here's how to find me:

Stocktwits/InvestFeed/Twitter:  grems8544

Greenfield Dividends: https://www.collective2.com/details/94780986
Greenfield Accel Sales, EPS, and Pre-tax Profits:  https://www.collective2.com/details/95702992

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

New Meeting Announcement

We will be holding a face-to-face meeting on 2/13/2016 for all interested parties at the following location:

Burke Centre Library
Room: Burke Centre Meeting Room 116K
Address: 5935 Freds Oak Rd, Burke, VA 22015
Library Phone:(703) 249-1520
Time: 10:00 AM to 1:00 PM
Meeting Start Time: 10:00 AM

I will attempt to stream the meeting audio, and perhaps video, as per past meetings, via GotoMeeting.  Attendance via GotoMeeting is limited to the first 25 call-ins.  The ability to do this is completely controlled by the library and I have no say in Internet access.

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

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







Monday, February 1, 2016

I trust that your shopping lists are ready

.
If you are on the blog page, please subscribe to this using the "Follow by Email" link to the left.  Having your email helps me see the number of folks reading this.

Summary

Thursday triggered an initial entry and Friday's strong action confirmed a short-term buy signal.  My target equity level is around 33% or so, perhaps a bit higher because we were so oversold.

Long-Cash Ratio Table

In a word, bullish:


Click on the image to enlarge.

The LCR jumped 74% from 0.159 on Thursday to 0.277 on Friday, confirming entry into the markets.  I've been writing about this for many days so this should not have been a big surprise.  The growing staircase of green in the middle of the table indicates that stocks are moving into a "new long" recommendation (volume plus price appreciation), and the right side indicates that on all measured timeframes that we are accelerating upward on a day-over-day basis.

Futures are down as I write this so I'm expecting a day of pullback / digesting gains.  I consider it healthy in that it helps to keep us from moving upward too quickly.

For new folks reading this, the table is bullish but in a young stage of growth.  Any red on the right side of the table would indicate short-term slowing (prices decreasing), and if sustained, would put the middle of the table under pressure.

Note that a reading of 0.277 is incredibly oversold.  We have a long way to go upwards just to reach parity (1.000), where the number of long-rated stocks equals the number of cash-rated stocks, let alone higher.  Expect some pullbacks.

Cumulative Tick

As previously mentioned in other blog entries, Friday's CT presentation was classic confirmation:



Click on the image to enlarge.

After messing around on Wednesday and Thursday with a tight range (the moving averages all converging and tight), Friday's explosive move upside and "fan" presentation of the moving averages to the upper right shows that buying was strong and sustained on all fronts on the NYSE.  This is a great confirmation presentation.

The middle plot shows that algorithmic buying was present and sustained at over 500 stocks per minute ending on an uptick.  Given the number of stocks on the NYSE you would think this is relatively easy to accomplish, but as I've shown in the past, it is not.  this sustained upward-moving trace shows that markets were stepping in aggressively.

As long as the white remains above the solid red line in the lower plot we are in an uptrend, albeit a short-term one (for now -- your crystal ball is as good as mine).

"Greenfield"

I'm initially focused on two primary portfolio constructions.  The first is the classic "Greenfield Dividend" portfolio, which has dividend-paying stocks as the primary criteria, and the secondary criteria being that the stock show constant to accelerating dividends, revenues, and EPS in the recent time frame.  Here is a subset of the stocks making this cut:


Click on the image to enlarge.

The list above is not exhaustive and subscribers to my Dropbox have access to the full list, with other important information.

The field titles should be self-explanatory, but here is a fast breakdown:

c-50: how far the close is from the 50d moving average
RevYoY: same year-over-year revenues  percent change
RevQtr-1: revenues in the present reported quarter compared to 1 quarter previous
RevQtr-1y: revenues in the present report quarter compared to the same quarter a year ago
%TTMRevChg:  trailing 12 month revenue change compared to the previous year's TTM rev change
QREV -- what the quarterly revenue is

EPSYoY: same year-over-year EPS percent change
EPSQtr-1: EPS in the present reported quarter compared to 1 quarter previous
EPSQtr-1y: EPS in the present report quarter compared to the same quarter a year ago
%TTMEPS:  trailing 12 month EPS change compared to the previous year's TTM EPS change
QEPS -- what the quarterly EPS is.  Negative isn't bad if the trend is upward.

YoYDivChg -- how much have dividends changed for the equity in the present year compared to the previous year?  Same as TTM
Score - an internal system I use to rank the stock.  Don't ask, and red/negative does not mean what you think it does.  I simply sorted it this way for the presentation.
V - does the stock have at least 100K shares 50d moving average volume?

The "yellow" in the table indicates that Tradestation does not have a value for that specific stock.  I've I'm familiar with the stock I typically ignore partial omissions from Tradestation.

If you are a Tradestation user the indicator is available.  I ask that you consider a donation (using the link on the web site, left side) if you are interest in the indicator.  Note that it is locked to your customer ID and network ID, so I'll need that information if you want a copy.  The most recent version is 2.1.4, which is shown above.  It runs flawlessly under Tradestation v9.1 and v9.5 still gives it intermittent fits.  I'm running v9.1 and expect many of you are too.

Within this dividend paying strategy I'm looking for stocks that would be adequate to be timed with the GGT timing system, as well as those that would work as long-term holdings and that do NOT use the GGT timing system.  Because time is limited, and because risk is presently high I am only investing in Greenfield stocks that meet both criteria, although this will not be the case as the market matures.

Strategy

I'm a buyer within this market, targeting 30-40% equity in all portfolios.  Note that I already have positions in a number of the stocks that I am going to discuss, as I entered over the past week as conditions improved.

My February cash secured puts are all massively in the money, as I bought them when the markets were at the extreme local lows but when we had "thawing" occurring on the right side of the LCR table.  Go back a few blog entries -- perhaps 1-2 weeks -- and you can read when I was buying them.  The LCR can provide a good indication when to collect some premiums but of course, it is possible to continue to fall when the LCR is in the single digits, so the stock could be put to you at expiration if the price has dropped that far.  Only write a CSP on a stock that you would want to own at the lower value.

As a gimmee, here is a sampling of the stocks that meet my dividend criteria and are in tune with the GGT system:


Click on the image to enlarge.

These are not recommendations and you should do your own diligence on these stocks.  Note that I own a few of these and have orders pending for others on this list.  Note that ANFI does not pay a dividend but is on the list due to a possible significant undervalue criteria being met.  All the stocks meet the Greenfield criteria I discussed earlier.

This list, as well as others, are available (for free!) to my Dropbox subscribers.  Instructions on how to subscribe are below.

Independent of time frame for holding, my entry methodology is the same:

1) BUY STOP LOSS entry only
2) entry price is 0.1% higher than the previous day's high (buy strength)
3) delayed entry until after 9:45 a/ET
4) if buy stop loss does not fill, then I adjust the price downward, never upward.
5) with little exception, the stock will be a GGT "long"-rated stock (New Long, Affirmed Long, or Long)

~~~~~~~~~~~~~~

Unless something really remarkable happens Monday, I will not be blogging on Tuesday due to travel.  My next blog entry will most likely be Wednesday morning.

~~~~~~~~~~~~~~

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.

Subscribe to my twitter feed if you want intra-day observations:  grems8544

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

Meeting Announcement

We will be holding a face-to-face meeting on 2/13/2016 for all interested parties at the following location:

Burke Centre Library
Room: Burke Centre Meeting Room 116K
Address: 5935 Freds Oak Rd, Burke, VA 22015
Library Phone:(703) 249-1520
Time: 10:00 AM to 1:00 PM
Meeting Start Time: 10:00 AM

I will attempt to stream the meeting audio, and perhaps video, as per past meetings, via GotoMeeting.  Attendance via GotoMeeting is limited to the first 25 call-ins.  The ability to do this is completely controlled by the library and I have no say in Internet access.

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

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