Gotta Love Whipsaws -- Confirmed Move Back to Cash June 20

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With the close of markets on June 20th, my models have whipsawed completely back to the cash side.  I knew this signal was suspect, but as I indicated in my previous entry, I'm compelled to take every signal.

The damage has been quite light overall.  My underlying methodology when a new signal is generated is to do the following:

1) Update all candidates in terms of my "green screen".  I've presented the details elsewhere in this blog on what I look for -- I simply remove any stock that is not indicating "green" in my TradeStation scan and add new ones that meet this criteria.

2) I take this new list of "leaders" and I use a proprietary method of ranking 5d, 10d, 15d, and 20d Effective Volume.  I want EV to be indicating new buying in the stock, so 5d > 10d > 15d > 20d with all values positive.  This gives me a list from the best EV candidates to the "worse", although "worse" hasn't been proven as these are all good stocks from my list.

3) I ensure the stock is a GGT "Long"-rated stock:  New Long, Aff. Long, or Long.  Rare exceptions will allow me to review a CASH-indicated stock.

4) I buy on strength.  I typically place a BUY STOP order for the previous day's high price + 0.1%.  So if the stock was $20 high as of yesterday, I place a BUY STOP for $20.02.  If it was $150.00, the BUY STOP is $150.15.  The duration is for the next trading day only.  If the stop never triggers yet the stock is good as far as GGT is concerned I lower the BUY STOP and the process repeats, as long as my macro indicators are still showing an expanding market.

The last point is where we are now.  My macro indicators, namely the LCR (Long-Cash Ratio), have all moved negative in momentum.  I'm not buying stocks, I have no pending orders, and I'm exiting my holdings as GGT indicates.

Damage has been quite slight using this method.  I still have substantial gains in some of my positions, keeping the accounts above break even.  Nevertheless, I'm seeing the tides change, so I expect to be moving to Contra ETFs very soon.

Regards,

Paul

Model Signals Conditional Long Entry

Good day all,

A number of you have sent private notes asking how I'm doing and if I still post. The quick answer is that 1) yes, I'm quite well, and 2) there hasn't been much to post about, so my time is filled with other activities. Just so you are aware, aside from my day job, I've been actively seeking my birth parents (I'm adopted), and I've recently found their family lines using DNA and am working to narrow the field down to a few individuals, and 2) I'm in the process of selling my company and this is taking a considerable amount of attention. I continue to update GGT on a daily basis, post the files in the Dropbox, and keep abreast of the signals generated from my model. I've all but shut out all external noise from the talking heads, and I think my trading/investing is better for it.

With the close of markets today (June 18), my primary timers are indicating a conditional long entry. "Conditional" status is simply because not every timer is confirming the signal, but my primary one has fired and it is often more right than wrong, so here I am.

Here's the GGT Long-Cash Ratio (LCR) table:

Right click on the image to open it in a different tab or window.

The LCR has had two days of advancing into positive territory, and the transition of the 5d and 8d signals is generally a positive move, indicating that as a whole, the database is starting to see prices and volume move upward. This is a reliable signal in general, but in this state of QE-infinity all bets are off. Nevertheless, I've taken the most favorable stocks from this list and have entered conditional orders for Wednesday, and if they fill, they fill.

Here's my list: https://www.dropbox.com/s/gm1pmdowe3fwhf4/13Jun18-CombinedLeaders.txt 

These are sorted most favorable EV pattern descending, so BEAV sits on the top spot and it goes down from there. These are all "Green" stocks, meaning that they meet my tight screening criteria (covered elsewhere in this forum), and as you can see, the list is small as of right now because we've been in the throws of a consolidation.

I have no idea if this is a valid signal. With performance history as my guide, I'm taking this signal. Here's the performance of the timer since 11/2008:

These stats are compiled using the GGT index, which is mostly duplicated by investing in the IWM or VTI ETFs. I tend to invest in stocks with much higher beta than IWM or VTI, so my performance generally is better.

For those of you who subscribe to the Real Time Thrust Monitor at the Effective Volume site (www.effectivevolume.com), I've uploaded this latest list and you can get intra-day breakouts as they occur.

As always, do your diligence, and take ownership for your actions. 

Regards,

pgd

Update for Monday, 29 April

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The new combined leader list can be found here.  As usual, the list is sorted with the best Effective Volume stocks at the top, going into Monday, April 29th, and descending down to the worse timing.  All these stocks pass a rigorous screening and my view is that they are all worthy of investment.

My holding period is several days to weeks, and in some cases, months.  I make no representations as to trading these stocks on a short term basis -- I do not perform analysis on this time frame and my timer systems are not tuned to short time frames.  In other words, your on your own.

For those of you who know how I screen, here is the "green table" (as it's become known).  Not all the stocks in the combined leader's list is here due to screen capture limitations, but the best for timing entry are presented:

As with all my blog images, right-click on the picture to open in a new tab or window so you can scan the details.

Column descriptions are to be found here.

As a group, e.g., a mini-index, the behavior is solid but range-bound:

This suggests that we are losing our ability to make new highs, and although I'm still on a long signal overall, expecting all these stocks to continue to climb would be rather foolish.  We *can* expect the individual stocks to outperform as well as underperform the chart above, and this is why timing with Effective Volume is important.

Regards,

pgd

13APR24-Timer Indicates "New Long" into the Markets

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With the close of markets on Wednesday, April 24th, my GGT timer has confirmed a move into the markets on the long side.  Shorting stocks or trading contra ETFs should be avoided if your time horizon for holding is typically longer than a couple of weeks.

As you can see, we're prone to whipsawing right now so the level of commitment into equities is subjective.  I am only placing orders for GGT securities which are "long" rated, and have a strong preference for GGT securities which are showing a cash-strength of +4 and/or favorable effective volume (www.effectivevolume.com) and/or are flashing a "New Long" status.

Daily updates of stocks on my list, along with their recommendations, are available if you send me an email to pduncan [at] VT [dot] edu, editing the syntax as necessary, and place the word "Dropbox" in the subject field with nothing else in the subject.

For those of you who are familiar, there are a number of leading stocks who should be on your watchlist.  My scan of this universe produces the following table:

Right-click on the image to open in a new tab or window to make larger.

To save you time in typing, the list of stocks above, sorted most favorable EV at the top descending, is as follows:


BIOL
VCLK
BOFI
CPTS
LOPE
NXST
CBM
EPL
SSI
KR
PRXL
STC
CTCM
CONN
MMP
KMX
MPW
SIRI
ACOR
FOR
SBGI
CZZ
HF
JRN
VMED
PIKE
PGTI
SIRO
ASTX
SFLY
SIG
EVC
HOTT
NLS
FLO
AB
CERS
COG
HCI
BX
GMCR
JOEZ
BEAV
PUK
HIMX
LEDR
SMI
TCX
WTT

Of course I urge you do perform your own diligence and to take responsibility for your own decisions.  I am not responsible for anything you do with this list of stocks.  Note that I have orders placed with many of these stocks.

Whether is this a short-term, failure-prone signal or not is left for the folks with crystal balls.  I take every signal, and I use GGT's methods to get into and also jump out of stocks.  

Happy hunting.

Regards,

pgd

Whipsaw - Moving Back to Cash

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I'm on travel so I will be brief.

My GGT model has indicated a whipsaw with the 4/11 signal to move long, effectively reversing any move to the long side. I continue to raise cash and ignore all "New Long" signals that are occurring in equities.  Now is not the time to be opportunistic, as the tide is clearly turning despite earnings season.

Remember, you are responsible for your own decisions, and I am not.  Please do your diligence, and please take ownership for your actions.

Regards,

pgd

GGT Model Signals Long 4/11

I'm on travel so this will be brief.

My GGT model has signaled that I should move long.  Stocks that are breaking out will be fair candidates, as well as GGT stocks signalling "New Long".  A listing of the latest stock database can be shared via Dropbox if you send a message to pduncan [a-t] vt.edu, replacing the [a-t] with the @ symbol and no spaces, and make the subject of the message "Dropbox".

The GGT long-term timer is long, and has been for some time.  The short-term timer and intermediate-termed timer just transitioned long with the close of markets on 4/10, so here we go into earnings season.

Remember, you are responsible for your own decisions, and I am not.  Please do your diligence, and please take ownership for your actions.

Regards,

pgd

March 18 - Short Term Timer Transitions to Cash, Stay the Course (for Now)

With the close of markets on Monday, March 18th, my GGT short-term timer has transitioned to cash. Investing in the ETF VXF or IWM would have yielded about 1.1% gains since the signal transitioned long, if you close at or better than the closing price of March 18th.

This *could be* a good entry time if the markets reverse and continue their climb. Watch the MF indicator at the Effective Volume site (www.effectivevolume.com) and stay on the correct side of that recommendation. With my intermediate-term and long-term timers still solidly bullish, pullbacks in quality stocks should be examined closely for favorable EV patterns.

To this latter point, the link HERE is of the most recent leader's list and is sorted best EV patterns descending on a 5d, 10d, 15d, and 20d lookback timeframe. My focus is the top of the list.

Note that this list changes daily with respect to order and MINOR changes to composition are weekly. This is a very solid, relatively-static list, with major updates and close examination on the weekend.

Due to my pending travel schedule I'll try to post an update using Friday's close but then it will be static for the period 3/23 - 3/30.

Regards,

Paul