LCR All-Time High; ST Timer has transitioned LONG. Elder continues LONG.

.

Quite a day on the markets.  Of note is that the LCR has hit an all-time high -- 4.721 -- and shows that 2403 stocks are some form of long and 509 are in some form of cash.  This is a lofty level and taking some profits here would not be a bad idea.

The GGT strength index has also hit an all-time high, and has been assigned a value of 1.0.  Where you're at the top there is only one way to go, so action the next few days will be interesting.

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

Short-Term LCR Change Timer

Wednesday was obviously a good day.  http://www.finviz.com/ is reporting that 4669 stocks advanced and 1545 declined on much heavier volume.  The primary indexes were all up, so rising prices on increased volume can only be interpreted as bullish.

The LCR movement caused the short-term timer to move LONG.  This suggests that a position in the VTI, UWM, and/or QLD is prudent, accomplished early in the trading day, e.g, between 9:30 and 10:00 or in the pre-market if you're registered to do this.  UWM took the 1st place price on Wednesday, up 2.81%.  QLD was next at 1.55%.  Both of these are 2x leveraged ETFs.  The VTI was up 0.78%, and since this is a 1x ETF, it relates on the same performance as QLD.

I'm placing an order for UWM early in the morning on Thursday.

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

Elder Intermediate-Term Timer

The timer is long, as you might expect.  The FI(13) is positive, and the values/trend on the 13d and 34d are positive and upward.

My list of Elder candidates is the following:

YMI
MNRO
CPL
NWY
MYN
WIW
AIV
C
VSH
CIK
KBE
XLNX
IAT
CHS
ATHR
AMD
MPWR
ERII
CBC

Obey price action requirements (above previous day high) and prorated volume requirements as a function of time and you'll have good entry positions.

My positions for this portfolio are doing ok with today's action.  Here are the totals:

EWH, +7.83%
EWO, +7.84%
BKF, +7.52%
FXI, +6.6%
GXC, 5.17%
PID, +4.71%
SATC, +3.23%
KOL, +2.03%
IAU, +1.86%
AES, +1.82%
XLB, +1.81%
XME, +1.54%
IGE, +1.06%
GMO, +1.02%
FDO, +0.33%
JASO, +0.29%

I'm worried about FDO and will most likely sell it on Thursday with a 1% TSL.  When stocks move upward on a strong day it basically leaves the weaker ones exposed for pruning, and FDO isn't worth holding at the present time when the others all moved up at least 1% (FDO lost -0.11%). 

I've got about 3.5% unrealized gains right now.

I sold CMS @ $18.4807 today, for a loss.  With the close the FI(13) EMA transitioned to CASH.  Here's the chart:

In the graphic above, note that the top red/green ribbon is now red.  That's the FI(13) EMA.  Also note that the MACD is rolling over, that the slope lines are dropping and converging, and tha tthe price is sitting on the 13d.  It may reverse off the 13d (simply look at the past), but the Elder signal will prevent me from entering.

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

Remember, you are responsible for your own trading decisions, not me.  Please do your own work.

Regards,

pgd

Divergence and Potential Topping

.
Greetings again from Spokane.  This is a wonderful place of the country.  I'm headed to Michigan later today, back to the area I grew up a few moons ago.

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

The dashboard:

Today's data is on the bottom line.

GGT price moved upward on Tuesday by +0.35% to $25.91 (column 2).  Volume was barely above the 50d MA average by +3%, which is in the normal noise (column 3).  Rising prices on solid volume is bullish and we should believe in the trend.

The GGT Long-Cash Ratio (LCR), which is one of the most important indicators of the database, moved upward 6% to end the day at 3.522 (columns 4-5).  This is a lofty amount but certainly shows that price and volume of the constituent stocks is moving upward.  We now have 2268 stocks in some form of long and 644 stocks in some form of cash.  The LCR trend is decidedly bullish.

I'm a firm believer in following the trend but I also want to show you something that was eye opening for me:

Simply look at the peaks above -- the light blue is the raw LCR value and the black line is a simple 4d moving average.  We are very close to historical peaks.  Certainly, we can go higher, but I think the likelihood of doubling from here is very poor.

The graph below also should put the present market in context of our past over the last 2 years:


Here, we see that exponential moving averages (EMAs) on the LCR are clearly in an uptrend AND that we are hitting lofty levels.  While we certainly could move up from here, I think we have to be watchful of a rapid breakdown. 

Column 6 in the dashboard is the database strength index. The strength moved from 0.81 to 0.86, again showing strength in price, volume, and rate of change, which clearly is bullish. Again, we certainly can remain at these lofty levels, but the likelihood is increasing that this will reset.


There was also a divergence within the database that I must point out.  This is a bit technical, but the gist of it is that I calculate TWO strengths -- one is the strength of the database (column 6), and one is the strength of the database without volume.  This latter one, the one which omits volume, DECREASED in value on Tuesday.  THIS IS INCREDIBLY IMPORTANT ... it is telling us that stocks are not necessarily increasing in strength because of price, but are doing so because the volume number is above their historical optimized levels.  Please stop and think about this -- prices aren't advancing, but volume *is* advancing.  This is the classic definition of churning and I think it indicates that we are topping.

Given the action yesterday, and given where we are at in general on the markets, we are clearly in a bull leg and we should be aligned accordingly.  I continue to purchase stocks and ETFs long, and will continue to play this side of the market.  Note though that we must be aware of a potential reverse in the overall markets and be prepared to exit our longs at the first sign of weakness.

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

Short-Term LCR Change Timer

The Short-Term LCR Change Timer is still sitting at CASH-LONG (0), and if today is an up day as far as the LCR is concerned, will transition to LONG with the close of the markets.  The VTI and UWM look attractive; QLD not so much in terms of momentum.

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

Intermediate-Term Elder Force Index Timer

The raw FI(13) is positive (column 12).  The slope of the 13d EMA of price is above the slope of the 34d EMA of price.  These three indicators certainly tell us that we are long and in my opinion, anybody who shorts for anything longer than a day trade is simply throwing money away.

My holdings are doing ok, but underperformed yesterday, which I take as a warning.  Here's the chart:

The strengths are

• Bull power is very positive
• Bear power is positive
• Both the EMA and SMA calculations of FI(13) are very positive
• The FI(2) is very positive
• The MACD and MACD Signal lines are properly oriented and very linear/uptrending to the right (positive histogram)
• 13d and 34d slopes are positive and positively trending

The weakness is that the price performance did not clear Monday's action, although volume was upward relative to Monday.

Possible Elder entries are

ATI
AGN
AMX
AVY
ABX
CII
CELL
C
CLF
GLO
CNSL
DVN
DWA
DSW
ETM
EVEP
EXM
XCO
FDX
FRG
FTO
GNK
GFIG
GRZ
IMO
IEO
EWH
GSG
LH
LNC
MERC
MFLX
NM
NAT
NOG
NUE
OIS
OSUR
PKY
DGP
RRD
RSTI
SWN
GLD
GXC
TAL
TGH
BX
EGY
WERN
WPRT

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

Remember, you are responsible for your own trading decisions, not me.  Please do your diligence and please take ownership for your executions.

Regards,

pgd

LCR FELL Monday; Intermediate-Term Elder Timer is LONG

.
Greetings from Spokane, WA.  I'll be traveling all week so entries will be on an "as possible" basis.

===================
The dashboard:

GGT Price moved up on Monday on very low volume due to the Columbus Day holiday.  We can largely discount this action.

The GGT Long-Cash Ratio (LCR) FELL on Monday, despite a 200-stock difference in the ADV/DEC line at http://www.finviz.com/ which favored the ADV side of the equation.  As I've indicated in the past, when the ADV/DEC numbers are close to each other, then we have to err on the side of the status of the LCR Change Timer.  The ADV/DEC is NOT the same as the LCR, but they are highly correlated.  Monday's action was a day that this correlation was not 1:1.

The GGT strength index fell, relaxing some of the overbought feeling in the market.

Overall, with the markets down today, I am of the opinion that this is normal market behavior and that we're in no immediate danger (e.g., today).

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

Short-Term LCR Change Timer

The timer has remained in CASH-LONG (0) status, and if today is an up day, will transition to LONG (+1).  Given where we are in the actual markets right now this is unlikely, but we could reverse this afternoon.  The NASDAQ just moved positive as I write this, so we may transition.

Given this, if the markets show major strength in the ADV/DEC line at 3:30-ish, clearly in favor of the ADV by at least 20-30% more stocks on the side of the ADV balance, I'll move into VTI, QLD, and/or UWM as I see fit.  In general the NASDAQ is performing poorly (see below), so my moving into QLD right now is tenuous at best.  UWM and VTI appear to be good candidates if we move higher.

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

Intermediate-Term Elder Force Index

The Elder 13d Force Index -- FI(13) -- continues to be positive by a substantial amount.  This is bearish for intermediate and longer-term holdings.  The slopes of the 13d and 34d EMAs on price are positive, which means we're making money on those time frames, and they are pointing upwards, which means that we are actually accelerating (making more $/day than yesterday).  Hence, our Elder signal is long going into Tuesday.

This being said, this leg is looking tired.  The NASDAQ COMP MACD is rolling over with the MACD signal line, effectively squashing any view of investments in technology.  The doji it printed on Monday does not bode confidence for me as well.  The NASDAQ-100 has already rolled over and is pointing downward on many indicators (MACD is below the MACD signal line, forcing a negative MACD histogram, the slope of the 13d EMA of price is BELOW the slope of the 34d EMA of price), so if you're holding anything that is considered tech, you may want to evaluate closely.  The DOW30 also printed a doji, so the big dogs are pausing with some indicision.

The Russell 2K and the S&P600 Small Cap are still leaders, relative to the other groupings.  Note too that the R2K printed a big, fat doji also, so the pause is across the board, even with the leaders.

I check the health of my personal holdings by placing all of the equity symbols in a list and letting HGSI equal-dollar-weight their performance.  Here's the chart:

As you can tell by the above graphic, overall, I'm holding equities that are in fairly good shape.  I do note that the slope of the 13d EMA of price has been decreasing for two days after peaking last Thursday, so the portfolio is losing steam.  The slope of the 34d EMA is still pointing upward, so the portfolio is still making money at a faster rate, day over day, on this longer time frame.  No reasons to panic.

When I dive in individually, JASO, IAU, FDO, EWO, GXC, EFA, PID, and IGE are all slowing, leaving XLB, XME, VXF, FXI, KOL, GMO, CMS,  and EWH to carry the water.  This is normal action and none of the holdings appear to be in any difficulty.

As I indicated in yesterday's entry, I sold IDCC near the open because it was showing weakness across multiple days.  Of course it went up through the day, which is par for the course.

Yesterday, I picked up positions in CMS and JASO.  They are both underwater, as they did not move much higher than my purchase price and pulled back throughout the day as it advanced.

The following equities are on my list for today:

ISLN
ACPW
RDEN
SATC
GEL
CBT
BSBR
CBG
LXP
NKTR
EE
CBST
DENN
IVC
EBF
FWF
MMT
HIX
GLDD
GSG
IPSU
PEG
EOS
ACTI
NWS
MITI
MELA
TBI
ARB
SMA
IVAC
PMI
UMC
ISIS
HZO
MBLX
PPHM
EK
RDN
SGMO
RP
GSG

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

Remember, you are responsible for your own trading decisions.  Please do your diligence and take ownership for your trades.

Regards,

pgd

Possible Transition to LONG on short-term timer;

.
Thank you to everybody who came to the meeting this past Saturday.  The meeting presentation has been posted to the TSFI forum, and will be posted to the GGT forum this morning.

I'm traveling this week, first to Spokane, WA Mon-Wed and then to Muskegon, MI on Wed-Fri.  I return to NoVA late Friday night, and detailed blogging may be tough.

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

Our familiar dashboard:

As with all my images, right-click on it to open in a new tab or window.

Friday was a banner day with the markets.  The GGT price index moved upward 1.82% to $25.78 on volume that was only -2% less than the 50d MA of volume.  Rising prices on normal volume is bullish.

Our internal barometer of the market, the GGT Long-Cash Ratio (LCR), moved up nicely too from 2.995 to 3.466, a change of +16%.  Internally, stocks appreciated nicely in terms of price and volume.  This too is bullish.

The GGT strength index, which is scaled between 0 and 1, marched upward from 0.741 to 0.881.  This means that the database of stocks improved in price, volume, AND rate of change compared to historical levels.  This is bullish, but at this level, it is also lofty.

From a pricing and LCR point of view, the markets had a good day, are certainly up in price, but are a bit overbought.  We must be selective in our entry to long positions.

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

Short-Term LCR Change Timer

Because the markets moved upward on Friday, the GGT short-term LCR change timer transitioned from CASH (-1) to CASH-LONG (0).  This is telling us to get your entry list ready.

If the markets are up today as far as the ADV/DEC line at http://www.finviz.com/ is concerned, this timer will transition to LONG with the close.  To anticipate this, it could be prudent to enter VTI, UWM, QLD, etc. between 3:30 and 4:00 p.m. EDT if we have a solid advance as determined by the ADV line.  Conversely, if this is not the case, then remain in cash.

I will attempt to publish my moves if practical.

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

Intermediate-Term Elder Force Index Timer

The Elder 13d EMA on the Force Index -- FI(13) -- is positive by a significant amount, telling us that we can consider long positions (column 12).  Furthermore, the 13d slope and 34d slope on the price of stocks contained in the GGT universe (columns 14 and 15) are also both pointing upward, telling us that it is safe to move into long positions (column 16).

My list of possible entry candidates today is:

JASO
PZG
HF
PALL
ACGY
AZPN
STD
CHINA
CTRN
NTWK
VTR
OKS
LGCY
FLO
RGNC
JMBA
MYN
DCT
BND
BSV
NBG
CTRN
PLXT
APA
COG
CNX
DVN
HP
MRO
BTU
SUN
AES
AEE
CMS
DTE

I plan to use my standard requirements of price and volume to enter.

With respect to my present holdings, here's the scorecard:

EWO, up +6.51%
EWH, +5.92%
BKF, +5.03%
IDCC, +4.56
PID, +3.49%
FXI, +3.47%
GXC, +2.55%
XLB, +0.11%
IAU, -0.03%
XME, -0.13%
KOL, -0.58%
IGE, -0.59%
FDO, -0.87%
GMO, -4.16%

According to Wikinvest, which tracks my trades at Fidelity, here is my 1 month performance:

Note that I am presently 48% in cash.

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

Trading Plan for Monday

With respect to the short-term timer, I intend to enter the standard VTI, UWM, QLD positions if they are up by 3:30-ish and if the ADV/DEC line at http://www.finviz.com/ is up.

One of my holdings, IDCC, is problematic:

The MACD is rolling over, the 13d slope has crossed the 34d slope from above, and all week we've failed to make new highs.  I will sell this position with a 1% TSL on Monday.

With respect to the Elder Intermediate Timer, I'll enter the positions above if they meet my price and volume criteria.

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

Remember, you are responsible for your trading decisions, not me.  Please take ownership for your work.

Regards,

pgd

Intermediate Timer Long by a Whisker ...; Meeting Tomorrow 10/9

.
The dashboard:

The GGT Price Index fell only -0.16% on Thursday, ending the day at $25.32.  Volume was down -7% from the 50d MA, which is well within the noise distribution.  Overall this was a "normal" day in terms of price and volume action.

The GGT Long-Cash Ratio fell again from 3.239 to 2.995, and now indicates that 2234 stocks have some form of long recommendation and 746 stocks have some form of cash recommendation.  Put another way, we added a net 43 more stocks to the cash side of the recommendation list.  74.9% of the database is long, and as a snapshot, this is a very bullish stance.  Falling for two consecutive days can be considered normal, as the run-up on Tuesday certainly has given people reasons to protect profits.

The GGT strength index continues to weaken as price, volume, and rate of change all come off the highs established this past Tuesday.  We are now at 0.741, down from 0.839 yesterday, so we continue to relax the overbought position of the market.

Overall, the market is protecting gains established on Tuesday.  We've not seen a sharp sell-off, nor have we seen a seriously down-day this week.  From price and volume action alone we appear to be in a normal pattern of profit-protection and relaxation of extremes, so nothing is demanding our immediate attention.

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

Short-Term LCR Change Timer

Because the LCR dropped on Thursday, this timer moved from CASH-LONG (0) to CASH (-1), reaffirming our signal flashed on 10/4.

The GGT Equity Curve is locked in at $1.597 and is in cash, and the VTI Equity Curve, which has been in cash since 9/23, is locked in at $1.556. 

It does not matter concerning today's action; we are at least two full days from any type of long call.  With futures down significantly as I write this, I do not see how we can expect anything before Monday.

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

Intermediate-Term Elder Force Index Timer

The Elder 13d Force Index timer is LONG, but only by a whisker.  A down day today of anything greater than -1.2% in price on average volume or higher will most likely cause this timer to move to cash. 

Watch http://www.finviz.com/, specifically the Relative Volume numbers to the right of each of the Dow, NASDAQ, and SP500 graphs.  If you see this significantly above 1.0 after 3:30 pm EDT, and if these three indexes are down more than 1%, protecting profits could be prudent, especially if you have any close to break-even.

I provided a LONG list of potential Elder candidates yesterday; not ONE met volume and price action requirements for entry.  This is a warning sign that we are at a local top and further relaxation of the overbought perception is required.

98 ETFs meet the initial Elder screen this morning -- that's a huge number.  Here is a list of those ETFs that have up-trending 13d EMA and 34d EMA slope lines:

FXE
TMF
MWJ
TNA
FCG
OIH
DJP
IAU
IHI
EWK
EWC
EWM
EPP
EWL
IWF
IWO
IWN
IWR
IVW
IXC
IJJ
IGE
IJR
SLV
KOL
GDXJ
SLX
DGP
PIZ
PSP
UGL
MVV
PALL
SGOL
XLP
RWR
GLD
XLB
XME
MDY
XES
VUG
VO
VOE
VB
VBK
VBR
DEM

Of this long list, note that there are several gold ETFs.  Gold has been topping, and the pull-back that we saw yesterday may be profit taking.  If the trend resumes you'll know it because the price of these ETFs will break yesterday's highs.  This could be a good entry point if you missed gold's run up, but certainly be very patient.

The list of potential stock candidates is long too -- 70 initial candidates using the HGSI Elder screen.  Here are the ones where the 13d EMA and 34d EMA slopes are in an uptrend:

AEM
AGP
ANO
AXTI
ABX
BW
EXK
GMO
HAS
HL
IPG
LAD
NKTR
ROC
SMG
SVM

Again, wait for the prices AND volume to be up before entry.

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

Trading plan for Friday

My short-term timer is in cash and those funds will remain in cash.

I intend to protect my Elder trades, e.g., if they move against me and look like they will dive underwater I will sell them.  Correspondingly, I have placed the appropriate TSL on each position -- e.g., if they are up 1.9% I have placed a 1% TSL, if they are up 5.3% I have placed a 5% TSL, etc.  It is important as the markets shake out that we not lose any monies on these weaker candidates.

All TSLs are day-only; let's see what the markets do and make a determination over the weekend.

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

We have a meeting on Saturday (tomorrow) at the Herndon Fortnightly Library, Meeting Rooms 1/2, starting at 10 am and going to 1 pm.  The address is 768 Center St, Herndon, VA 20170-4640.

I hope to see you there!

Regards,

pgd

We're Losing Steam and Need More Coal

.
First, the dashboard:

The GGT Price Index fell -0.5% on normal 50d MA volume.  I consider this normal market noise and mostly unremarkable.

The LCR fell -4% to end the day at 3.239, with 2277 stocks LONG and 703 stocks in CASH.  76% of the database is LONG right now, and this is a very bullish stance.  On a day-over-day basis the bulls are still very much in control, although I am expecting weakening as profits are taken.  I also expect that this will be somewhat mitigated because earnings season is here.

The GGT strength index fell from 0.984 to 0.839, so we're seeing a gradual weakening of the overbought condition established by Tuesday's action.  I still consider this overbought, so right now is not a prime time to jump into the market if you've been sitting in cash.

This next chart is important to understand where we are in the present bull cycle, relative to the past:

The chart shows that we are certainly in an up trend, and that the 13d EMA of the LCR is > the 21d, which is > the 34d, which is > 55d.  This is bullish, and the fact that they are all pointing upward is a very good sign.  We probably have some steam left in this bull.  But also note the relative peak of where we are right now to the past -- we are at these same levels, if not higher.  While I don't want to throw water on this market I think that we must be vigilant for a rapid breakdown in the market, as we simply cannot sustain these lofty levels indefinately.

This next graph should give you pause too:

This is the GGT Price and the GGT Smoothed Rate of Change, and it shows that we have topped locally in the GGT SROC and are now starting to decrease.  While we certainly can go higher, this is telling us that on a day-for-day basis we are having difficulty moving upward at the same rate that we were at the beginning of this run -- we are definately losing speed and momentum.

Personally, I am increasing my cash position and taking profits.  I'm not exiting, as you will see below, but I certainly am going to take profits off the table.

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

Short-Term LCR Change Timer

The timer is remaining in limbo-land at a CASH-LONG (0) state because the market fell in terms of the LCR yesterday.  Given this, I did not move into any new positions in the VTI, UWM, or QLD areas.

Watch again around 3:30-4:00 today for the ADV/DEC line at http://www.finviz.com/ to be far more on the ADV side than DEC side.  If this is the case, I most likely will open a position in VTI, UWM, or QLD.  If not the case, then the timer will reset to CASH (-1) and we'll be at least two days from a long call.

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

Intermediate-Term Elder Force Index Timer

The Elder FI(13) timer continues to indicate LONG so in the big picture, it is okay to purchase stocks on the long side.

Here's my watch list for today:

BIDU
TKR
OPLK
XXIA
CIB
DISCA
AMZN
CBT
ORLY
PPG
PPO
PTEN

TYH
IYZ
EWD
IWP
IJR
BRF
PIZ
PIE
PDP
QQQQ
MVV
QLD
TQQQ
RWR
XBI
MDY
XLU
VO
VOE
VBK

As always, look for entries ABOVE yesterday's high AND volume above the pro-rated values according to the time of day.  I like the following schedule and use it daily:

By 10:00, volume over 12.5% of 10d MA
10:30, 25%
11:15, 33%
12:15, 50%
1:15, 60%
2:15, 70%
3:15, 90%

Yesterday I sold EGHT for a slight gain (it dropped like a rock), IGN for a slight gain, and VHC for about a 16% gain.  I purchased HTHT and FDO.  My positions are as follows:

EWO, +5.8%
IDCC, +4.7%
BKF, +4.67%
EWH, +4.4%
PID, +3.21%
FXI, +3.10%
GXC, +2.26%
EWN, +1.98%
PFM, +1.31%
FDO, -0.22%
HTHT, -7.06% OUCH!

Note that HTHT signaled a move to cash with the close of the markets so I will lick my wounds and sell this stock, even though I purchased it yesterday.  Bad timing on my part, although it looked good at my point of entry.

I still have my 1% TSLs on EWN and PFM, good-til-cancelled.

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

Trading Plan for Thursday

With respect to the Short Term Timer, I will watch market action around 3:30 and decide on VTI, UWM, and QLD at that time.

With respect to the Elder FI(13) Timer, I have a busy business day today so I will not be at the PC except sporatically.  I have set my watch to alert me at the appropriate times as indicated above and will check the price/volume of stocks on the list.  I will purchase any stock that meets volume and price action as laid out above.

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

Remember, you are responsible for your own investment decisions, not me.  Please do your diligence.

Regards,

pgd

Strength Index Near All-Time High, ST Timer may move LONG, Elder Whipsawed LONG

.
I'm not sure how many of you are downloading the nightly ETF postings by my colleague Joe (jumpinjoe), and all I can say is that if you're not downloading, then you should be.  There are some interesting tidbits going on the the ETF world.

Contained within that nightly posting are the status of 81 different flavors of Contra ETFs.  Something happened within those Contras last evening that I've never seen in over two years of watching the list:  we have only 3 Contras, out of 81 total, that are in a LONG status.  All the rest are in some form of CASH status.  This is incredibly bullish.  The three that are in LONG status are AGA (low volume, ignore), SMB (low volume, ignore) and SKF (6.8M shares volume).  SKF is the leveraged Contra of the Financials, and the fact that we don't see it's sister here (SEF, -1x Financials), nor it's bigger brother FAZ (-3x Financials), suggests that this is an outlier.  Indeed, here's the GGT timing chart for the last year:

As you can see, it's getting the heck beat out of it since signalling long, but overall, it has kept us on the right side of the trade for the larger moves.

Something that may escape you if you review the "By Recommendation" page is this:  One of the New Cash recommendations is QID.  This went to New Long with Monday's action, and with Tuesday's banner day, it whipsawed to New Cash.  In fact, three other ETFs followed the same path.  All systems whipsaw -- all I can hope for is that GGT keeps me on the right side of the trade the majority of the time.

This one whipsaws, and shows that investing in Contras during bull markets can be hazardous to your financial health:

To wrap this up, 3.7% of the Contra ETFs that I track are LONG.  The rest are in some form of CASH.  I think we can watch this ratio and see when the market begins to roll over.

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

The dashboard:

Our price index jumped +2.29% on Tuesday's action, on volume that was +12% higher than the 50d MA.  Rising prices on higher volume is a good sign.

The LCR jumped 47% to 3.357, and now indicates that 2296 stocks have some form of LONG status and 684 stocks have some form of CASH status.  77% of the database is LONG, and we've not been here since early April.  With history as our teacher we all know what happened near the end of April.

The 6th column from the left is the GGT strength index.  It is now at 0.984, the highest level recorded since 9/13, and in terms of 1-day change, jumped from 0.573 to its present level.  WOW.  The problem is, there isn't much we can do in terms of moving up from here ... another jump in this strength simply is not achievable. 

While we may play around here a bit there is only one way to go when you're at the top, so be in tune folks.  I wouldn't consider this market (today, Wednesday) a wonderful buying opportunity if you're sitting on the sidelines...

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Short-Term LCR Change Timer

Poor ole change timer.  Just when it thinks the world is disintegrating it gets slapped with another jump upward.  My loss in VTI is evidence that this timer is playing catchup.  With the move yesterday the Short Term Change Timer has transitioned from CASH (-1) to CASH-LONG (0), and if today is an up day as far as the LCR is concerned, it will move back to the long side.

By now you should know how to play this.  If http://www.finviz.com/ is UP at 3:30-3:45 as far as the ADV/DEC bar is concerned, we have fairly good confidence that the LCR will be up too when I upate later this evening.  This means that movement into VTI, UWM, QLD, etc. could be prudent.  Again, your crystal ball is as good as mine.  I'm not fretting that I missed this move with the ST Change Timer, nor should you.  It happens and in the course of history of this timer, it works far more often than it fails.  I intend to stay the course.

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Intermediate-Term Elder Force Index Timer

Elder has whipsawed with Tuesday's action ... the timer continues to provide a positive 13d Force Index, and the slopes of the 13d and 34d EMAs are positive on the GGT universe.  This tells me it is okay to enter stocks long, if I can find any.

I trimmed CSUN from the portfolio yesterday, as it looked weak.  I placed 1% TSLs on EWN (up 3.28% for the day), IGN (up 2.48%), and PFM (up 2.06%), and the TSLs never fired. 

I will leave the 1% TSL on EWN, as it is only up +1.59% in my portfolio and I do not want to incur loss.  IGN is up +2.97% in my portfolio so I will open it up to a 2% TSL.  PFM is up +1.31% so again, I will leave the 1% TSL intact.  These were the weakest of my holdings going into yesterday's action and I am not confident that they will keep their momentum.

Here are my holdings and performance:

VHC, +43.31%
EGHT, +11.92%
IDCC, +6.27%
BKF, +5.10%
EWO, +4.27%
EWH, +4.23%
FXI, +3.17%
IGN, +2.97%
PID, +2.67%
GXC, +2.42%
EWN, +1.59%
PFM, +1.31%

Note that NO Elder-Filtered ETFs are returned by HGSI.  This is because the 2d Force Index of the entire ETF database (screened for > $1, >100K shares) is positive. I do not buy unless the 2d Force Index is NEGATIVE AND REVERSING ON THE DAY OF PURCHASE.  There are no ETF candidates for today.

Only 4 stocks are returned in the Elder-Filtered stocks (see my past blog for the setup):  SMTX, PAY, CNU, and KFN. 

• CNU is losing momentum and the 13d EMA slope is now below the 34d EMA slope, with both pointing down.
• KFN looks interesting and is a good candidate for entry IF it moves higher than yesterday's high of $9.08 on above-average volume.
• SMTX is losing momentum in a big way and not only are the 13d/34d EMA slope lines inverted, they are almost below $0/day.  Bad news.  Avoid.
• PAY is disqualified because the 13d/34d EMA slope lines are inverted AND the 13d slope line is NEGATIVE at about -$0.02/day.  Yuck.

Patience.  Wait for a 2d Force Index pullback -- it's coming.

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Trading Plan for Wednesday.

Short-Term Timer:  if the markets are higher with respect to the ADV/DEC line at http://www.finviz.com/ by 3:30-ish I will move long in VTI, UWM, and/or QLD (my choice).

Intermediate Timer:  I will keep an eye on KFN, and will move on it if it continues to move higher on higher volume.  I will keep my TSLs in place on my present weakest holdings as discussed above.

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Remember, you are responsible for your trading decisions, not me.  Please take ownership for these decisions.

Regards,

pgd