No Buy Signal, as of September 3 Close

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All my timers are still recommending CASH.

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Although I was anticipating that we'd move higher, today saw barely a change in the markets as a whole.  Volume was noticeably light in front of the Labor Day weekend, and this impacts my LCR metric.

To refresh you:  The Long-Cash Ratio is a metric I developed that is based on the aggregate number of stocks that are rated some form of  "Long" and some form of "Cash".  To move to the "Long" side and become designated as a "New Long", price AND volume must be present.  Even if price moves up, the lack of volume will keep a stock in some form of "Cash".  Hence, when volume is low, we get less "New Longs", and today is no exception.  Average is 72 "New Longs" per day, on an up day, and today produced 34, with first standard deviations between 41 and 103.

A light day.

I expect that Friday will be light too.

My primary indicator of the market, the cumulative tick indicator, looks improved over yesterday:

Click on the image to open in a new tab or window.

We're still outpacing the New 52-week highs with more 52-week New Lows, which is bad overall.  We are well off our highs over the past year and many stocks are still getting beaten up.  Hence, the top trace tells me that risk is high -- the water is flowing OUT, lowering boats right now, not raising them.

The middle trace is constructive.  It started positive for the day and stayed there all day.  This is a filter set to 500 transactions per min.  If 500 ticks in one minute are ending on the next higher increment (indicating lack of supply and rising prices), then it moves up one notch.  The converse is true too.  This is a good algorithm indicator for buying/selling stocks electronically, although we're not seeing that now.  A positive bias here is good -- the markets generally are buying.

The bottom trace is bullish and there is nothing preventing me from entering the markets if they signal long.

Strategy.

With no confirmed buy signal, there is little to do Friday.  Enjoy the long weekend, and I'll post more later Monday night.

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Regards,

pgd

Close to a buy signal, September 2nd close.

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Please subscribe to this using the "Follow by Email" link to the left.  Nobody gets your email except me, and I promise that I won't email you.  It helps me see the number of folks reading this as well as ensuring you get the signals on a timely basis.  If you miss a signal this system will most likely produce sub-par results, which isn't my fault.

All my timers -- short term, intermediate-term, and long-term, are in CASH.

The Dividend portfolio, which strives to remain invested, ignores the timers and is largely in cash because the holdings in the portfolio all were recommended to CASH.  If you don't know what this means you need to download the latest file from here and in general, become a member of my Dropbox.

To become a member, send an email to pduncan [ a t } v t {dot] e d u  (fixing the address, of course), and in the subject put "Dropbox" and I'll add you to TWO groups -- my Yahoo group, as well as the Dropbox group.  I need you in the Yahoo group because it's the only way I can communicate with the Dropbox users.

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

The Long-Cash Ratio (LCR) table, which is described elsewhere in this blog, is showing signs of completing a base and starting to move higher.  On the left we have the 2d and 3d slopes of the LCR moving averages again with a positive slope, and on the right the acceleration of all of the moving averages is positive and moving higher.  This is a good set-up for launching back into stocks, BUT, we're not there yet.  The 5d slope needs to move positive (green), and this will take another day.

Hence, I am sitting pat on Thursday.  Cash is king.

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

The cumulative tick chart, which I describe often (so read previous blog entries please), is showing constructive behavior.  The morning started poorly but around 12:15 p/ET the market starting to buy aggressively and steadily, which you can see in the reversal of the white trace.  With it closing above the moving averages of the cumulative tick, it is relatively strong (for the day) and if this continues, we'll get a buy signal soon.

Note though that the top trace, which shows the 52-week New Lows on the NYSE, is still dominating.  This is a RISKY market -- more stocks are making NEW LOWS than are making NEW HIGHS, and this is bass-ackwards.  To jump into the markets full force I would need this indicator to show new highs dominating, and we're simply not there.

Of course, we could see more gyrations like yesterday (Monday) and the market could head south again, zeroing the timers.  Your crystal ball is as good as mine.  I invest in the market I'm presented with, not the one I want.

I plan to keep my powder dry Thursday.

Strategy:

The Stock File at the Dropbox location above has been fully updated with lists of quality stocks and their recommendations, allocated per portfolio.  You will need to review the list of stocks in the Dropbox file in order to make any informed decisions.

I'm not buying on Thursday.

If the market is up Thursday we'll most likely get an entry signal for Friday.  The Dividend portfolio will be filled with quality stocks that have higher yields.  Most of you know I buy strength so these will only be bought if they take out the previous day's high plus 0.1%.

A buy signal right now will signal a 33% equity position in the markets, subject to further evaluation of portfolio signals/quality.  If this is foreign to you I simply use the stocks screened for a specific portfolio to determine whether I should enter the portfolio.  You'll see the process over the next few days if I get a buy signal.

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As always, 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

Cumulative Tick Now Bearish (again)

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Please subscribe to this using the "Follow by Email" link to the left.  Nobody gets your email except me, and I promise that I won't email you.  It helps me see the number of folks reading this as well as ensuring you get the signals on a timely basis.  If you miss a signal this system will most likely produce sub-par results, which isn't my fault.

Today's action obviously hit prices hard.  Selling wasn't as strong as you may have thought, at least from the perspective of the cumulative tick indicator I use.  The slope of the lines is not very steep, but the chart is short-term bearish in every interpretation:

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

The top trace shows that a number of stocks fell to their 52-week low -- 212 to be exact on the NYSE -- and this significantly outpaced the number that hit 52-week highs (25).  When we have this condition risk is terribly high and it generally does not make sense to enter the markets.

The middle trace indicates that we started with a selling bias and it was more/less in a downtrend all day.  No real panic sells here, so I'm not as paranoid about the day as the talking heads would have you believe.

The "tell" here is that in the bottom plot, which has the real-time cumulative tick (white) and the moving averages of the CT (all some color of red or purple) all starting to down-trend again.  This obviously is not good -- the markets are net selling, and hence, it simply does not make sense to enter the markets when this is occurring.

Risk is very high.  It's not worth entering, and I don't bottom fish.

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

The LCR dropped with today's actions, and you can see on the left side of the table that we have red everywhere for today.  This means that all the moving averages of the long-cash ratio are now negative, and more stocks are moving to cash than the other way.  This simply confirms what we see in the Cumulative Tick chart.

The right side, which measures acceleration of the LCR in a given direction, is mixed.  I don't read too much into the mixed value -- we're right at thresholds.  The market could go either way, and cause the right side to turn more red or green depending on what it does.

The "so what" is simple -- without green on the right, you can't get green on the left, and I don't buy unless I see green on the left.

Strategy:

Take Wednesday off.  Go play golf, work, whatever.  Don't watch the markets, because it doesn't matter.

I'm not buying for the Dividend portfolio just yet, but I am getting my shopping list together.

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Regards,

Paul

Closer to a trial buy signal, Tuesday, September 1

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Please subscribe to this using the "Follow by Email" link to the left.  Nobody gets your email except me, and I promise that I won't email you.  It helps me see the number of folks reading this as well as ensuring you get the signals on a timely basis.  If you miss a signal this system will most likely produce sub-par results, which isn't my fault.

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All my timers are in CASH.

My Greenfield Dividend portfolio holds limited positions at this time.  It is mostly cash due to prudent money management policies.  It will be the first portfolio to buy as soon as we obtain more stocks that are rated "long".

Despite the thawing that started to occur last week on August 26th, mid-day, the markets are not indicating that I should step in.  The cumulative tick pattern, shown above, indicates that more stocks are making 52-week lows than are making 52-week highs.  This is not a "rising tide" and is not a good stock buying environment.

Risk is high.

The bottom trace indicates buying (in general), but is not sufficient for a buy signal.  The fact that the white trace is above the red trace is constructive, and indicates that net-net the market is buying here, it does not mean that we cannot go south.  We can, and we most likely will retest last week's lows.

The LCR table is indicating that we are close to a buy signal:

The LCR rose Monday despite the drop in markets.  This means that there is buying with falling prices.

The solid amount of green on the right side of the table indicates that acceleration of stocks prices is upward on a day-over-day basis.  This is a good sign, and is necessary for a buy signal.

There will be no buying Tuesday.  I'm not interested in bottom fishing.  I need the following:

* 5d or longer LCR slope to turn positive
* continued green on the right side of the table.

You can see the "head fakes" on the left side of the table.  The red-green-red patterns as we step through the days means that we've seen much back/forth.

Again, risk is high.  I am not being aggressive here.

Strategy:

Sitting pat for Tuesday.  Lists are updated in the GGT Dropbox, so go review against your own criteria.  Many of the candidate stocks that are rated LONG look good here.

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As always, do your own diligence.  You are responsible for your actions and I am not.

Regards,

pgd

Risky to Buy Stocks at this Time - August 19th Close

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Independent of some of the tweets I'm seeing from some well-known momentum masters, it simply is not a good time to get into a new round of stocks right now.  As evidence of this I present a simple chart:  the Cumulative Tick

Right-click on the chart to open in a new tab or window.

The top trace is the 52-week New Lows (red), the 52-week New Highs (green), and their difference (yellow).  When red is above green there are more stocks on the NYSE that are making 52-week new lows than new highs.  When the yellow trace is negative (it is at -589 in the picture) then we have a domination of new lows.

I [DON'T] buy stocks when we have such a strong domination to the downside. [EDITED THE ERROR]

The middle trace is a filter that I've created to watch algorithms in their buying/selling activity.  Right now it's set to 500/minute.  500 what?  500 NET stocks that are ticking lower (bids outpacing asks) per minute on the NYSE.  A transaction (buy or sell) occurs, and to get the next order filled, the price has to move up or down.  If it moves down that's a tick lower.  If it occurs 500 times per minute or more in aggregate then the red line moves down one mark.  If it occurs less than this it prints the same (previous) value, so you get a straight, horizontal line.  If you see a bunch of downward-directed lines then folks are selling their stocks -- they are unloading them.

You can see with the middle trace that we started to tick up -- the FED was giving their spin on things, and the market thought it was all good.  Unfortunately, once the market started reading the language and started to do their interpretation, it wasn't so good, so the markets resumed their spin down.  The afternoon peak in the 2nd plot occurred about 2:25 p/ET and the bears took over for the rest of the day.

The bottom trace is my cumulative tick.  It's an accumulator, nothing more, nothing less.  The real-time trace is white, the longest moving average is bright red.  When white is above red we're in good shape, and when white is above ALL of the lines, we're most likely in a short-term up-trend (just look back two days).  To get sustained buying of any confidence, I like to see white-above-red for 2-3 days without white crossing back below red.

The cumulative tick timer reset on 8/19, so I'm not in a hurry to buy new stocks.

Patience.

I'm working today, and doubt I'll be watching the markets much.  Sell orders on GGT "New Cash" recommendations have been placed, I've cancelled all outstanding buy orders in all accounts, including the Collective2 accounts, so there really isn't any need to waste time watching the markets today.

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Here's how to find me:

Stocktwits/Twitter:  grems8544

Greenfield Bargains:  https://www.collective2.com/details/95793176
Greenfield Dividends: https://www.collective2.com/details/94780986
Greenfield Leaders: https://www.collective2.com/details/94921209
Greenfield Low Beta:  https://www.collective2.com/details/95702992

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

Regards,

pgd

All Timers are Recommending Cash - August 13 Close

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With the close of markets today, August 13, my short term, intermediate term, and long-term timers have transitioned to cash.

Correspondingly, the new target cash position is 100%, e.g., move out of equities at this time.

The LCR table moved to a bearish position today, indicating that despite the reversal yesterday (Wednesday), it's not safe to be in the markets, as the entire ocean is being drained (albeit slowly):

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

The left side of the LCR table shows that the database long-cash ratio is dropping day-over-day, which means the air is slowing deflating out of the markets.  We're at low levels, with 0.526 indicating that for every 526 stocks that are recommended in some form of long, 1000 are recommended in cash, and the trend is dropping.  When this is occurring it's not a good time to purchase stocks.

The middle shows that all the slopes of the moving averages are now negative.  From very long, to very short moving averages, all are feeling this and all are pointing down.

The right side shows three consecutive days of downward-accelerating movement in the markets on all measured time frames -- on a day-over-day basis, more stocks than the previous day were moving to cash.  This is a downward acceleration.

There are exceptions, of course.  If we take all my "Greenfield" stocks (screening criteria is elsewhere in the history of this blog), and take those that are recommended long as an index, the index is relatively strong:

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

Ignoring all the noise in the graph above (I'll explain some other time), the fact that all the various pricing moving averages are lower-left / upper-right AND they are not crossing tells you that the basket of Greenfield stocks are still good stocks (although if you look closely you can see that they are somewhat overbought and are struggling to make new highs).

The concept can be used to check various portfolio strategies, and as many of you know, the Greenfield Bargains portfolio is having a rough time of it:

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

This is a plot of all the stocks that are current long in the Greenfield Bargains portfolio.  Basically, you can see that it's flat in performance, and what this means is that it's going to be really hard to make money in this portfolio if the stocks in the portfolio are struggling.  Because this portfolio invests in stocks that are quality stocks BUT are beaten down, it is no wonder that this is a hard portfolio to move upward in the present climate.

Contrasting, my best performing portfolio is the Greenfield Dividends portfolio.  Here's the same presentation:

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

Again, note the lower-left to upper-right price appreciation and the moving average lines.  This portfolio is intact.

Because I'm sure someone will ask, here's the Low Beta portfolio:

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

You can see that the Low Beta portfolio is intact and advancing, although it's not made much progress over the past week.

The Cumulative Tick is the biggest tell -- despite the mid-day reversal on Wednesday, today ended on a nasty note with a sell-off in the last 60 minutes, almost to the perfect 3 p/ET start time:

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

As I tweeted earlier in the day (around 11 a/ET), 52 week new lows were outpacing 52 week new highs.  You can see this in the top trace.

The middle trace was more/less flat -- indicating no program selling or buying.  If you are looking for a reason to be optimistic I guess that would be one.

The bottom trace is the cumulative tick and this one shows that the end-of-day tick started selling off (look at white trace).  It's starting to cut through the moving averages (bad), and if it drops below the lowest one (purple), all of the moving averages will start heading south with a negative slope.  Again, that is not the time to be buying stocks.

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Strategy:

The Dividend portfolio remains 100% invested.  It does not follow the timers. As I showed above, it's doing very well in this climate.

The Bargains portfolio will be closed and cash will be raised.  The target is 100% cash.  I plan to use a 1% stop loss, reset daily for the C2 portfolio, but use a 1% trailing stop loss for the TradeStation accounts.  In both cases orders are not valid until after 9:44 a/ET.

The Low Beta portfolio, although stronger than the Bargains portfolio, is under pressure.  I'll raise cash quickly if I see it falling apart.

The Leaders portfolio is only partially invested.  I will not add to it in this climate, but I'm not closing it fully either.  Stocks that move to a "New Cash" recommendation will be sold using the same method above as the Bargains portfolio.  In fact, this applies to all portfolios without exception.

In short:  choppy waters make the management a pain in the tail.  The easiest portfolio is the Dividend portfolio.

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Here's how to find me:

Stocktwits/Twitter:  grems8544

Greenfield Bargains:  https://www.collective2.com/details/95793176
Greenfield Dividends: https://www.collective2.com/details/94780986
Greenfield Leaders: https://www.collective2.com/details/94921209
Greenfield Low Beta:  https://www.collective2.com/details/95702992

GGT Stock File (for AUG 13):  https://www.dropbox.com/s/tz6irmsncgkh18l/GGT20140503-Stocks-15AUG13.xlsm?dl=0

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

Regards,

pgd

Market Overview as of July 25 2015 Weekend

You may have to change the default resolution to 720p -- use the little "gear" in the lower right corner to do this.