Intra-Day Reversal Not Supported by Data - Sept 10

.
Timer Status:

Short-term timer:  CASH
Intermediate-term timer:  CASH
Long-term timer:  LONG
Long-Cash Ratio:  falling, 6th consecutive day to 1.055

Slope / LCR Table:

Cumulative Tick Chart:

Equity Chart:

Comments:

The strongest day-over-day indicator is the Long-Cash Ratio, or LCR. Despite the apparent reversal of the indexes, and the subsequent reversal of the cumulative tick indicator around 11:00 a.m., the LCR fell for the day which indicated continued weakness.  The slope of the 10d EMA on the cumulative tick is negative, and until the white line (real-time TICK) crosses the red line (10d EMA) from below it does not pay to enter the markets.

Strategy:

I continued to unwind many of my long positions to a net 50% of their original holdings.  The equity curve is now in new territory, as can be seen by the green dots above, and there are further gains to be captured.

I have set 1% trailing stop losses on all positions that are above the waterline that will take the positions down to 50% cash.  Coupled with some of the new "New Cash" entries, total holdings are between 50%-60% cash when all the dust settles.

The cumulative TICK value (white) needs to be above the 10d EMA (red) in order for it to start to turn upwards.  While this is in a down trend, and while the LCR is in a downtrend I am not going to be buying any new positions.  Yes, I have my watchlist (see a few posts ago), but I've not done any position sizing exercises AND until the 2d, 3d, and 5d EMAs on the LCR slopes values turn positive there will be no intermediate buy signal.  At a minimum the 2d and 3d need to convert to green, and this will not occur before the end of the day on Thursday.

All the book keeping is caught up, the orders are placed, so tomorrow (Thursday) will be an easy day.

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

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

Intermediate Timer Moves to Cash - Close of Sep 9

.
Timer Status:

Short-term timer:  CASH
Intermediate-term timer:  CASH (newly transitioned on 9/9)
Long-term timer:  LONG
Long-Cash Ratio:  falling, 5th consecutive day to 1.134

Slope / LCR Table:

(right-click on the image to open in a new tab or window)

Cumulative Tick Chart:

(right-click on the image to open in a new tab or window)

Timer Table:

Comments

The short- and medium-term timers have transitioned to cash.  The long-term timer is still "LONG".  The cumulative TICK indicator is starting to accelerate downward, with the 10-day EMA of this value clearly holding a negative slope.  This is not good to being long in the market.

 Although you can't see it, the LCR fell -18% relative to yesterday.   This is a large drop, so even though volume was not appreciably high today, a large number of stocks fell significantly in price action.  Read what you want into the lack of volume.

Strategy

In general, with rare exception, I do not buy stocks when the 10d EMA of the cumulative TICK is negative in slope.  I wait for this to flatten out to show that buying is starting to come back.  We're not there yet.

I intend to raise cash to 50% and unload positions (100%) that are below the water line.  Like usual I do this with a 1% trailing stop loss (TSL) which activates at 9:40-ish.

If Wednesday is a strong day up (reversal), I will probably kill any open orders that have not filled that would have taken me to 50% cash.  A reversal will have to be characterized by the instantaneous TICK line (the white one in the figure above) moving above the 10d (the red one) and heading on a positive trajectory upward.

Your crystal ball is as good as mine.  Protect your profits if the market continues to fall.

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

As with all my ramblings, you are responsible for your actions and I am not.  Please do your own diligence, and please take ownership for your actions.

Contact me if you have any questions.

Regards,

pgd

Update - Close of Monday, Sept 8

.
Timer Status:

Short-term timer:  CASH
Intermediate-term timer:  LONG
Long-term timer:  LONG
Long-Cash Ratio:  falling, 4th consecutive day to 1.384

Slope Table:

(right-click on the image to open in a new tab or window)

Cumulative Tick Chart:

(right-click on the image to open in a new tab or window)

Comments:

No re-enter signal on Monday.

The slope of the 8d EMA of the long-cash ratio (LCR) moved negative against a backdrop of all the slopes of the slopes showing negative.  This effectively negated Friday's attempt at a rally.  We are one step closer to a sell signal, but of course, we are not there.

With respect to the cumulative tick (CT), along with the EMAs on the CT, we have two negative things that are on-going in the short term:

1) the slope of the 10d CT is negative.  The tide is flowing out and boats are falling with the tide.  This is evidenced (independently) by my LCR value.
2) all of the day-over-day CT EMAs are also negative in slope, AND, they are all below the 10d EMA of the CT.

We will need a strong Tuesday to reverse this pattern.  Futures are barely positive as I write this.

Strategy:

No buying today (Tuesday).  The short-term timer is in CASH because the LCR is falling.  Do not buy when the LCR falls.  Wait for the 2d, 3d, and the 5d LCR slopes are turning positive from negative.  Refer to the first table in this entry.  With respect to the LCR "slope" table, you want the right-hand side to reflect GREEN and the left side to transition from red to green.  A new signal will be generated on the day this occurs.

~~~~~~~~~~~

As with all my ramblings, you are responsible for your actions and I am not.  Please do your own diligence, and please take ownership for your actions.

Contact me if you have any questions.

Regards,

pgd

Weekend Update - Close of Friday Sept 5

.
Timer Status:

Short-term timer:  Cash
Intermediate-term timer:  Long
Long-term timer:  Long
Long-Cash Ratio:  dropped for 3rd consecutive day to 1.463

Slope Table:

(right-click on the image to open in a new tab or window)

Timer Status:

Comments:

Despite the gains in the market on Friday, I'm not convinced (yet) that we've resumed the uptrend.  A falling long-cash ratio (LCR) means that more stocks are falling below their historical, optimized levels and this is not good for portfolio growth.  If the tide is flowing out then most boats sink lower...

You can see in the two tables above that no progress was made to reverse the signals of the close of markets on Thursday, September 4th.  With respect to the top table, and the right side of the table, we see that the shortest time frames -- 2d, 3d, and 5d -- slopes of the slopes (SoS') did move positive, but this is hardly convincing.  We need strength on all time frames for the SoS' values, and it is not there.

I've been dumping positions that were underwater as well as taking 25% off the positions that were showing some positive gains since the last signal.  Lots of work, as there are 19 different portfolios to manage in real time, but it's what I signed up to do.  The combined equity curve from these portfolios is as shown:

(right-click on the image to open in a new tab or window)

The green dots signify new equity highs, and you can see that unwinding some of the losers took me down off those highs.  This is okay; as long as the general trend is from lower left to upper right I'm satisfied and the work is justified.

Strategy

Having raised about 25% cash over the last two days, my strategy is to sit pat for now and let the markets confirm which direction they want to move.  The holdings that I have right now are performing fine and if the market continues higher they will do well.  Here's the holdings dashboard:

 
(right-click on the image to open in a new tab or window)

Until the short-term timer turns positive I will not be adding to any of these positions.  Note that many of them have an "*" by their name; they have sell-orders pending at the 25% level and simply did not trigger on Friday.  They may trigger on Monday -- I don't know.

It's important to keep the shopping list handy though, as we may get a confirming "move back into the market" signal as early as Monday night.  While the following list is subject to change, and is only partial through the symbol SHPG due to the size of my screen, it's been a fairly stable list for a while:

(right-click on the image to open in a new tab or window)

To save you the effort of typing in the symbols here they are in total:

AAP
AFSI
AGN
ALK
APT
ARII
BABY
BIDU
BITA
CMG
CO
CP
CTP
CW
DAL
DXCM
EMES
ENPH
ENV
EQM
FB
FNHC
GIII
GILD
HBI
HCLP
HDB
HEES
HOLI
HTLD
IDTI
IG
JBLU
JLL
KS
LAD
LEAF
LUV
MAR
MNST
NEO
NFLX
NVGS
NXPI
OTEX
PEIX
PJC
PL
PRSC
R
RCL
RFMD
SAVE
SHPG
SKX
SNX
SWKS
TPC
TUES
UAL
UEIC
URI
UVE
VTNR
WGP
WRES
XCRA

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

As with all my ramblings, you are responsible for your actions and I am not.  Please do your own diligence, and please take ownership for your actions.

Contact me if you have any questions.

Regards,

pgd

Short-Term Signal Moves to Cash - September 4, 2014

.
Timer Status:

Short-term timer:  Transitioned to CASH
Medium-term timer:  LONG
Long-term timer:  LONG
Long-Cash Ratio:  1.473, dropped -11% from yesterday

Action:  taking 25% of all profitable positions off the table to lock in gains.  Unloading all positions that are below the waterline, as well as NEW CASH recommendations.  No new purchases.

Timer Table:

LCR Table:

(right mouse click on the image to open in a new tab or window)

The right side of the LCR table has now experienced two consecutive days of negative "slope of the slope".  The right side of the table will always lead the left side of the table, and the move to negative numbers may foreshadow a short-term or longer-term pullback.

For now, the left side of the table is still bullish on the intermediate and longer-termed time scales.  Only the short-term time scale is indicating weakness, hence, I've taken some exposure off the table.

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

Standard disclaimers apply.

Regards,

pgd

Status, September 3, 2014

.
Short term timer:  LONG
Intermediate term timer:  LONG
Long-term timer:  LONG
Long-Cash Ratio:  1.649, 1% DECREASE from previous day

In table form, here are the LCR slopes as well as the slope of the slopes:

(right click on the image to open in a new tab or window)

Commentary:

The LCR "slopes of the LCR slopes" have all turned negative on a day-over-day basis, showing a pause in the markets.  This can be seen on the right side of the table.  Nevertheless, the left side of the table is solidly green, so we are in an uptrend as a market.

I took a few profits today in my leading stocks as I've been in the market for 16 days and I'm starting to see a few more of my holdings stall/pause.  We could resume upward, or we could continue downward in a slow drift -- your crystal ball is as good as mine. The one item that made me take 25% off my highest-advanced stocks was this (see the circled area in the figure below):

(right click on the image to open in a new tab or window)

The instantaneous cumulative TICK of the NYSE moved below the 10d MA of the same value, which is a significant change compared to the last 16 trading days.  This may be temporary, or it may not.  Again, I have no idea, but locking in a few profits when this occurs is part of my trading plan.

I'm still over 85% invested.  As of today's close, aside from the cumulative TICK, we're looking pretty good overall.  Thursday and Friday's action will be interesting.

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

Regards,

pgd

Timer Status - September 2, 2014

.
Short term timer:  LONG
Intermediate term timer: LONG
Long-term timer:  LONG
Long-Cash Ratio:  1.665, steadily increasing

Graphically:

Holdings:

(right click on image to open in a new tab or window)