Elder Signals Move to CASH

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Folks,

Family-related events in my world are preventing me from a blog entry.  I expect that this will continue for the next few days, so I'll post when I can.

The Intermediate-Term Elder Force Index Timer system has moved just barely negative, by only -10,000 points, tenatively indicating that we should consider a move to CASH.  Purchasing stocks today is not in your best interest.  Hence, I am not going to provide a list of candidates.

Regards,

pgd

Deteriorating LCR, Elder Intermediate Timer Long, LCR Short Term Timer in CASH

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Welcome from Northern Virginia.  I was unable to post yesterday due to my travel schedule, and things should be "back to normal" for today's action.

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Summary

• The LCR fell for the 2nd consecutive day confirming the move to CASH on the Short-Term LCR Change Timer
• The slopes of the EMAs on the LCR -- 5d, 8d, 13d, 21d, 34d, 55d -- are all negative.  When this has occured in the past it has been dangerous to my intermediate-term investing health.  I plan to prune my weakest stocks today (FUQI and EFA are GGT New Cash going into 11/12, LULU and BC are the weakest of the GGT, LLC holdings, and SKS and GSIT are my weakest personal holdings).
• LCR Strength Index has pulled back to 0.580, which is sitting on an artifical support line.  Although this indicates we have plenty of room to run upwards, breaking this support line and closing below is not a good sign.  I think today's market action will be crucial.

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Long-Cash Ratio Analysis

We need to be aware of what is occuring with this indicator:

The LCR has fallen three conecutive days, landing at 1.94 on 11/11.  It is presently indicating that 65% of the stocks in the database are LONG, or put another way, 1866 are LONG and 962 are in CASH.  Three days of falling LCR is normal market behavior and by ittself, we should not be concerned.

With respect to the raw LCRs themselves, the 13d EMA has remained stubbornly below the 21d EMA, which kept a crack in the ice and is a bit of a concern.  I am watching to see if more of the LCR EMAs "invert", that is, that the faster EMAs drop below the next adjacent slower EMA.  If we see more red in the middle of the figure above we know that we're in trouble.  Conversely, if the picture in the middle does not change, we should be in relatively good shape for entry into stocks.

The right-hand side of the figure above is problematic from my perspective.  ALL of the slopes of the LCR EMAs, from the 5d through the 65d, have now turned down.  This is a bad sign, and unless these turn upwards, the green LCR EMAs in the middle of the figure don't stand a chance.  When these slopes of the LCR EMAs turn down across the board, without ambiguity, it tells me to prune my weaker holdings.  In this case I define "weaker" as those holdings with a poor relative strength, or if you use the GGT stock files, you can check the Long Strength column for the appropriate values.  In the latter case, anything with a 1 or below can be considered weak.

I consider the rate of change of the LCR EMAs important:

In the figure above, I am plotting the rate-of-change (slope) of the 13d, 21d, and 34d EMAs on the raw LCR index.  When the values are in the white zone, upper portion of the figure, the LCRs are climbing positively on those time scales, and when they are like shown in the lower portion of the figure, the LCRs are losing ground on those time scales.  I already showed in the previous figure that the slopes of the LCR EMAs were negative; this figure shows what this looks like for three of them.

In the figure above, the fact that all of these are pointing downward does not bode well for us.  It suggests that there is not a floor at the present time, hence I would expect raw LCR values to continue to drop.  Because the LCR is tied to price and volume action it is highly likely that we will see a corresponding drop in the individual prices of stocks.  This is not good for our present holdings, but it is good if you have cash and are waiting on the sidelines.

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Strength Index

I have an oscillator that allows us to look at the strength of the underlying database, in terms of the minimum and maximum values that it has ever attained in the history of the GGT universe.  Here's the graph:

The figure above shows that we have hit all-time highs with the GGT price index (dark blue), and at the same time, we have dropped in the overall strength of the database to levels that are at an artifical trend line support.  This is artificial because the world does not know this chart -- it's a "pure play" for us and it gives me an unbiased view of the behavior of the database in terms of strength.  I am specifically looking for this support level to be violated with one-or-two additional closes substantially below the level where we are today -- 0.580 -- and if this occurs, I would not be surprised at seeing overall market volatility increase a considerable amount as well a more-significant pullback to visible market support levels (SPX, INDU, N100, etc.)

We'll see ...

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Short Term LCR Change Timer

The LCR Change Timer is in CASH.  Positions in QLD, UWM, and UYG were closed on Thursday, November 11th, all for a realized loss.  This loss is due to a number of things: 

1. my travel schedule this past week,
2. internet problems at home precluding access to my tools while I was on the road, and
3. nuances with TradeStation concerning order entry/order execution. 

Hsin and I are working on procedues to overcome external issues such as what we've recently experienced.  Actual loss values with respect to the position size in the GGT, LLC portfolio are:

• QLD, -1.34%
• UWM, -0.82%
• UYG, -1.41%

I am presently in CASH with respect to all short-term LCR Change Timer holdings.

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Elder Intermediate-Term Force Index Timer

Elder's Force Index Timer is still showing LONG.  Given this, there are candidates that are available for purchase:

WSTL
PNX
PTRY
DLIA
WIN
AOL
HMSY
CHK
DNP
MLNK
MTSN
FNFG
TRST

Note that this is downselected from a list of over 141 initial candidates; infer what you will in this.

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GGT Top 25

Every Wednesday I will provide a list of new GGT stocks that meet my top 25 criteria.  Those stocks are:

GOOG
PCLN
AAPL
CMG
CEO
AGQ
AMZN
ABV
NFLX
MA
CF
CME
AZO
FCX
BIDU
BAP
GYMB
SOHU
LNN
SNP
AMG
SI
PTR
BEN
PCP

The top 8 are relatively unchanged in position from last week, and AGQ is a new addition to the LONG list.  Note that these candidates all are in some form of GGT LONG as of the close of the markets on Wednesday, November 10th.  These have not been further screened for entry.

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As with all equities, purchase on strength, not weakness.  Elder's 2d FI method provides a good basis for learning how to do this.  Ensure you pay specific attention to volume on the day of purchase -- e.g., buy stocks in demand, not ones that are simply increasing in price.

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Remember, you are responsible for your own investment decisions, not me.  Please take ownership for your actions.

Regards,

pgd

Short-Term Timer has moved to LONG-CASH; prepare to close ST positions

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Greetings from Spokane.  Today's entry will be sparse, as the home base is having Cox internet problems and I cannot access any of the updated GGT files.  Sorry for the inconvenience.  My summary is below:

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Summary

• We experienced a -1.05% drop in the price index on volume that was 19% above the 50d MA.  This is significant and can be considered a distribution day.
• The slope on the 5d LCR value has turned negative.  This is a crack in the ice, and shows that the gains that we have achieved over the past few days are tenuous.  Any subsequent drop of additional LCR slope values will not bode well for the bulls.
• The 13d EMA of the LCR remains stubborningly below the 21d EMA.  This too is another crack in the ice, and I do not want to see any further EMAs inverting.
• The Short-Term LCR Timer has transitioned to LONG-CASH (0).  If today is down as measured by the http://www.finviz.com/ ADV/DEC bar, then this will signal a short-term move to CASH.  My positions in QLD, UYM, and UYG are underwater at the present time so I am anticipating losses for these positions if we are forced to close today.
• The Short-Term LCR Timer that uses the VTI (Vanguard Total Index) is still long.  I would suggest closing any VTI position for a profit if you can; I have locked in 1.49% in 4 days in the VTI.
• The Elder FI(13) has had a negative slope for the past two days, but is well above 0.  Unless today is a terrible day overall this will remain long.  I do not advocate purchasing stocks until we get movement upward.

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Remember, you are responsible for your own trading decisions, and I am not.  Please think before you act.

Regards,

pgd

Everything is LONG; One Minor Crack in the Ice

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Summary

• We continue to see a relaxation of the markets, as measured by the GGT Strength Oscillator.  While still very bullish at 0.806, it has relaxed enough from overbought areas to allow us to continue higher.  
• The Long-Cash Ratio indicators are indicating that the database is expanding in the numbers of stocks available to choose from.  This improves our chances of success in picking stocks that will appreciate.  The LCR Indicators are telling us to be long in stocks.
• GGT price and volume were relatively unchanged with Monday's action, which indicates either a breather/consolidation or churning within the markets.  Today's (Tuesday's) action will be important.
• Short-Term timer is LONG, and positions are appreciating as designed.
• Intermediate-Term timer is LONG, and there are numerous opportunities for entry today.
  
• I am traveling Tuesday-Thursday so blog posting will be on an as-capable basis.

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LCR Indicators

The LCR indicators look the same as they did yesterday except there is one more row of green/red as applicable.  We still have the hold-out with the 13d LCR EMA less than the 21d LCR EMA, which is a crack in the ice but appears to be refreezing over.  All of the slope lines on the LCR EMAs are pointing upward, so if this continues, the 13d LCR EMA MUST recross the 21d LCR EMA from below, giving us complete green lights across the board.

In the three days that all the LCR EMA slopes have been completely green the GGT price index has increased +0.595%, so while early in this reaffirmation of a bull leg, we are certainly within it.

Aside from the 13d/21d LCR holdout, this system is telling us to be long in stocks.

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GGT Dashboard

Despite the primary markets being down yesterday, the GGT universe of stocks squeaked out a small gain.  Remember that I screen on stocks that are $1, have at least 100K 50d MA Volume, and that trade on the three primary exchanges.  The GGT price index moved up +0.07% to end the day at $27.58, a gain of +$0.02, and an all-time high since GGT's public unveiling in September 2008.  Volume was down slightly, ending the day -2% below the 50d MA of volume.  This is within the noise level so consider this a normal day in the neighborhood.  Unchanging prices on unchanging volume is either a sign of churning or indecision, so today's action will be important for the overall short-term trend.

Here's the dashboard:

The pricing system, comprised of their EMAs and slopes, are all green, which is very bullish for the markets.  There is no debate that we should be holding stocks long at the present time.  I used yesterday's apparent pull-back in some equities to enter numerous positions long, so I'm swimming with the trend.

Pick your stocks, pick your entries, and watch for an abrupt change in the LCR or Pricing systems.  Right now we're pointing upward.

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Short-Term LCR Change Timer

The short-term LCR change timer has completed it's 4th day of being long.  Since this time my personal position in VTI, my proxy for the GGT universe, is up +2.23%.  I entered QLD and UYG because of this signal and QLD is presently up +0.64% and UYG is up +1.71%.  If you are not in the markets with this signal I would not enter now, as this is a very short-term timer system (hence the name).

The official sell signal for these holdings is the short-term LCR change timer transitioning to a (-1) CASH position.  We are officially at least two trading days from that signal, and with the futures up as I write this, I do not think that today will be a reversal day (but your crystal ball is as good as mine).

I intend to stay the course with these holdings, but because of my travel the next three days, I will place a TSL equivalent to their ATR(20).

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Intermediate-Term Elder Force Index Timer

Elder's Force Index Timer system is LONG, indicating we can enter stocks on the long side.  The slope of the FI(13) fell yesterday, providing an opportunity to enter stocks on the long side.

My list of Elder Candidates is long so I will stop the list at the top 25 or so, as yesterday saw a pull-back, resulting in the FI(2) going negative.  Enter these stocks only if volume and price are moving upward (FI(2) transitioning positive by the end of the day):

MWW

NXTM

SKS

CNH

MBI

CENX

SBH

WCC

LUFK

AME

SLB

PMTC

ITUB

MCO

BDC

CODI

BUCY

PUK

SBS

CLP

PM

SLTM

AVT

TOT

LWSN

Disclaimer:  I hold a position in SKS.

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GGT Top25 Stocks

This is a new strategy that I am presently testing.  My "cream of the cream" are the following:

CEO

MA

GOOG

CMG

AAPL

BVN

Aside from these, my pool for entry is also:

ABV

BIDU

SOHU

LNN

SNP

DRQ

AMG

RVBD

SWM

These stocks will possibly change with the close of Wednesday night's markets, so entry on the Tuesday prior could be dicey.  Nevertheless, these are all quality stocks, and if you are holding any of these, you're probably pretty happy.

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General Disclaimer:

I have personal positions in SKS, WBSN, GBG, FOSL, GSIT, VTI, SSO, VXF, FUQI, EGY, SMTC, EFA, NOG, and JAZZ.

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Remember, you are responsible for your actions, not I.  Please take ownership for your decisions.

Regards,

pgd

Long across the board, waiting for pullback to enter positions

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Summary

• The primary slopes of the Long-Cash Ratio (LCR) index are all newly positive for 2 days, which is an extremely bullish situation.
• The LCR EMAs are all aligned with the exception of the 13d/21d pair, which still is inverted with the 13d EMA < 21d EMA.  Again, almost complete bullishness.
• Short-Term LCR Change Timer is LONG
• Intermediate-Term Elder Force Index Timer is LONG

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Let's start with the LCR Dashboard:

We now have two solid days of the positive LCR slopes, from 5d thru 65d, as shown on the right side of the figure.  On the middle/middle-left, we have the status of the LCR EMAs, relative to each other.  Of minor significance is that we have a hold-out:  the 13d LCR EMA is still below the 21d LCR EMA, but since the slopes of all the LCR EMAs are pointing upward, we're in good shape for long investments overall.

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Here's the overall pricing/timer dashboard:

The GGT price index rose +0.51% on volume that was 41% higher than the 50d MA.  This is bullish and I prefer to see rising prices on higher volume.

The pricing EMAs, as well as their slopes, are all green, indicating that they are aligned properly (8d > 13d, 13d > 21d, 21d > 34d, 34d > 55d), and that the slopes are continuing upward.  This is bullish for long positions and there is no reason to sell anything on the long side unless it is tanking and trying to go against market flow.

The database strength fell from 1.0 on Thursday to 0.891, which I expected.  This is a very overbought value and I'd like to see it relax further prior to a massive entry into positions.

Overall, we have a very bullish condition for stock and I need to get my money deployed as soon as possible, preferably on a pullback of individual positions.  This is where the 2d Elder Force Index can help.

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Short-Term LCR Change Timer

Presently, this timer is LONG.  I presently hold positions in QLD (-0.56% gain), UWM (-0.19% gain), UYG (+3.20% gain), and VTI (+2.36% gain) in accordance with the rules of this timer.  I will sell any position that appears to be breaking down significantly or rapidly.  At this point, if you are not in these positions, I recommend you sit on the sidelines.

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Intermediate-Term Elder Force Index Timer

The Elder timer is long, and has been without whipsaw since October 19th, 2010.  This timer is suggesting that you can purchase stocks long.

Pullback candidates that meet the Elder 2d Force Index criteria are as follows:

KNXA

VRUS

FMCN

BAK

CIB

TTWO

TSU

CROX

CTXS

CACI

PXP

FMX

EMC

E

LSCC

TMO

NIHD

CAH

JDAS

TTI

SEAC

APT

DMND

FITB

EQT

FLO

ATLS

VVR

NIO

SYY

CL

GMR

NIO

SYY

CL

GMR

These are not recommendations for purchases.  What these do represent are those stocks that are in an uptrend yet pulled back sufficiently on Friday to allow entry today.  IF these stocks move above Friday's high AND do so on significant 10-day volume, your probabilityl of success will increase.

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GGT Top 25

This is a new strategy that is working well.  Every week I create a list of 100 stocks from the GGT Longs that have the best performance in terms of daily gain but with lower volatility.  This list is valid until close of business Wednesday night:

GOOG

AAPL

CMG

CEO

ABV

MA

BIDU

SOHU

GYMB

LNN

DRQ

AMG

RVBD

SWM

BVN

======================

Remember, you are responsible for your actions, not me.  Please do your diligence and take ownership for your decisions.

Regards,

pgd

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Summary

• The primary slopes of the Long-Cash Ratio (LCR) index are all newly positive for 2 days, which is an extremely bullish situation.
• The LCR EMAs are all aligned with the exception of the 13d/21d pair, which still is inverted with the 13d EMA < 21d EMA.  Again, almost complete bullishness.

===============

Let's start with the LCR Dashboard:

We now have two solid days of the positive LCR slopes, from 5d thru 65d, as shown on the right side of the figure.  On the middle/middle-left, we have the status of the LCR EMAs, relative to each other.  Of minor significance is that we have a hold-out:  the 13d LCR EMA is still below the 21d LCR EMA, but since the slopes of all the LCR EMAs are pointing upward, we're in good shape for long investments overall.

====================

Here's the overall pricing/timer dashboard:

The GGT price index rose +0.51% on volume that was 41% higher than the 50d MA.  This is bullish and I prefer to see rising prices on higher volume.

The pricing EMAs, as well as their slopes, are all green, indicating that they are aligned properly (8d > 13d, 13d > 21d, 21d > 34d, 34d > 55d), and that the slopes are continuing upward.  This is bullish for long positions and there is no reason to sell anything on the long side unless it is tanking and trying to go against market flow.

The database strength fell from 1.0 on Thursday to 0.891, which I expected.  This is a very overbought value and I'd like to see it relax further prior to a massive entry into positions.

Overall, we have a very bullish condition for stock and I need to get my money deployed as soon as possible, preferably on a pullback of individual positions.  This is where the 2d Elder Force Index can help.

=========================

Short-Term LCR Change Timer

Presently, this timer is LONG.  I presently hold positions in QLD (-0.56% gain), UWM (-0.19% gain), UYG (+3.20% gain), and VTI (+2.36% gain) in accordance with the rules of this timer.  I will sell any position that appears to be breaking down significantly or rapidly.  At this point, if you are not in these positions, I recommend you sit on the sidelines.

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Intermediate-Term Elder Force Index Timer

The Elder timer is long, and has been without whipsaw since October 19th, 2010.  This timer is suggesting that you can purchase stocks long.

Pullback candidates that meet the Elder 2d Force Index criteria are as follows:

KNXA

VRUS

FMCN

BAK

CIB

TTWO

TSU

CROX

CTXS

CACI

PXP

FMX

EMC

E

LSCC

TMO

NIHD

CAH

JDAS

TTI

SEAC

APT

DMND

FITB

EQT

FLO

ATLS

VVR

NIO

SYY

CL

GMR

NIO

SYY

CL

GMR

These are not recommendations for purchases.  What these do represent are those stocks that are in an uptrend yet pulled back sufficiently on Friday to allow entry today.  IF these stocks move above Friday's high AND do so on significant 10-day volume, your probabilityl of success will increase.

========================

GGT Top 25

This is a new strategy that is working well.  Every week I create a list of 100 stocks from the GGT Longs that have the best performance in terms of daily gain but with lower volatility.  This list is valid until close of business Wednesday night:

GOOG

AAPL

CMG

CEO

ABV

MA

BIDU

SOHU

GYMB

LNN

DRQ

AMG

RVBD

SWM

BVN

======================

Remember, you are responsible for your actions, not me.  Please do your diligence and take ownership for your decisions.

Regards,

pgd

Reaffirmation of Intermediate-Term Bull Leg

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Summary

• The short-term portfolio, which trades VTI, UWM, and QLD, is presently up 1.9% on this present signal.  Friday's activities will continue without change to this portfolio.
• ALL of the slopes of the LCR EMAs have turned positive, which officially signifies the start of a new intermediate-term bull leg.
• Several LCR EMAs are inverted, so we do not yet have confirmation of this intermediate-term bull leg.  Correspondingly, I intend to keep some of my powder dry.
• Thursday's action achieved an all-time high in the GGT Price Index and the Strength Oscillator

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Let's jump right in to the dashboard, specifically starting with the LCR:

As with all my figures, right-mouse click on the image to open in a new window or tab.

The Long-Cash Ratio (LCR), which is a measure of the number of stocks in the GGT universe that are appreciating (LONG) to those that are underperforming (CASH) moved up a dramatic amount with Thursday's action.  The LCR jumped +62%, ending the day at 2.878, and indicates that we have 2069 stocks with some form of LONG status and 719 with some form of CASH status.  This movement is very bullish.

The 5th column from the left indicates a major crack in the bear ice.  The 5d exponential moving average (EMA) on the LCR has now crossed back above the 8d EMA from below, which is bullish.  We still have a number of EMAs which are inverted, so we will need to see these turn green in order to have confirmation that this bull is here for the duration.  As of this morning the 8d < 13d, the 13d < 21d, and the 21d < 34d.    I personally would not commit 100% of my monies to the market at this time unless you are an aggressive investor/trader, as we want to see this inversion situation cleared.

I draw your attention to the right side of the figure above, specifically the bottom of the figure.  Whereas the left side of the figure represents the specific LCR EMAs, the right side of the figure represents the slope of these LCR EMAs.  These are (by design) leading indicators on the actual EMAs, because we cannot remove the aforementioned inversion situation unless the slopes of the LCR EMAs are positive (pointing upward).  For the last few days I've been saying that unless these all turn green that we should be concerned about the longevity of this bull leg, and with yesterday's action we have finally removed that concern.  The fact that all of these slopes of the LCR EMAs are now pointing upward reaffirms the intermediate-term bull leg and you need to participate if you are to make any money.

======================

Let's look at the other area of the dashboard:

Our GGT price index jumped +1.9% on Thursday, ending the day at $27.42.  I note that this is the highest we have ever been since GGT went live in September 2008.  Volume was significantly higher, ending the day with a jump of +43% above the 50d MA.  I often write of wanting higher prices on higher volume, and we achieved this on Thursday.  The bulls are firmly in control.

The Pricing EMAs, shown in columns 4-7, are all green -- this indicates that the alignment of the pricing system is bullish.  Additionally, the slopes of these EMAs (columns 8-12) are all green, indicating that they are pointing upward.  This too is bullish.

Column 13 represents our Strength Oscillator and it is showing a value of 1.000.  This is the highest value ever recorded and indicates that in terms of price, volume, and rate of change of price, we are at the strongest we have been compared to any time in the past two years.  As I frequently tell my kids, when you're at the top there's only one way to go -- down.  It will be an interesting next few days.

Overall, the bears are hiding and the bulls control the table.  If you're sitting on the sidelines you need to stop watching and simply pull the trigger.  Wait for a pullback, e.g., wait for the two-day Elder Force Index to indicate that it's okay to purchase a specific stock.  I'll post a candidate list below of equitites meeting this criteria.

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Short-Term LCR Change Timer

We are presently LONG in VTI with this timer, and the position is up 1.9% in two days.  We may see a bit of a pull-back today, and if this is the case, I will use the 39-minute bar with a MACD crossing in the lower half of the window to enter another position.  My general rule is not to chase this timer, as the GGT system signaled long on Wednesday (the VTI system signaled long on Tuesday), but we may be able to take advantage of general profit taking in the markets and the normal relaxation of prices.

QLD and UWM are also both candidates for entry under this timer system.

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Intermediate-Term Elder Force Index Timer

This timer is LONG, as expected.  It has been long since 9/2, and aside from a brief whipsaw on 10/9 and 10/19, it continues to keep us on the right side of the market.

If you do not know how to read the chart above in terms of the status of the Elder FI(13) timer please post a note in the GGT Yahoo! group (subscribe by sending a message to GreekGodTrading-subscribe@yahoogroups.com, and send a message from your email account by addressing it to GreekGodTrading@yahoogroups.com ).  Note that you must be a member of that group prior to posting any messages.

Here is my candidate list of Elder equities for Friday.  These have been screened against the GGT Universe of LONG-recommended stocks and ETFs.  The list is short, because the 2d Force Index is positive for most of the LONG universe, blocking entry to extended stocks:

MIPS
FFIV
ATHN
GLBL
SSP
NWSA
SIRO
AMED
GXDX
ECT

I intend to enter these only if they are higher than yesterday's high AND they meet prorated volume requirements.  For review, my prorated volume requirements are:

By 10:00, the stock is at 12.5% of the 10d MA of Volume
10:30, 25%
11:15, 33%
12:15, 50%
1:15, 60%
2:15, 70%
3:15, 90%

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GGT Top 25

This is a new strategy that will suggest the strongest stocks, as measured by the slope and coefficient of regression over a variable lookback period.  This list will be updated weekly, with new symbols appearing on Thursday of each week.  Enter only if price and volume are increasing (purchase strength):

GOOG
PCLN
AAPL
CMG
CEO
NFLX
AMZN
ABV
CF
AZO
MA
BAP
FCX
BIDU
SOHU
EMN
GYMB
LNN
SNP
DRQ
AMG
RVBD
MOS
SWM
BVN

For GGT, LLC members, this strategy will be added to our strategy document.

====================

Remember, you are responsible for your own investment decisions, not me.  Please take ownership for your actions.

Regards,

pgd