Intermediate Timer Confirms Move to Sidelines - as of 3-21 close

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Admin

I'll be giving a presentation at the following location this Saturday:

Great Falls Library,
9830 Georgetown Pike,
Great Falls, VA 22066
10:15a/ET - 1p/ET

The topic will focus on my new cheerleader role as the AAII Computerized Investing Special Interest Group wrangler as well as "Identifying Long-Term Income Opportunities: Using Trailing Performance to Weed Out Potential Underperformers"

I intend to stream the session via GoToMeeting for those of you who are too far away to travel.  Send me a note to GreekGodTrading [ a t ] gmail {d o t] com, making the appropriate changes to the email address, and I'll send you the call-in invite.  The call-ins are limited to 25 people, so first come first served.

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I spent the weekend wrapping up my initial newsletter hence did not post here.  If you want a copy of my Actionable Ideas, the link is here.  https://goo.gl/gezuEM  Instructions on how to subscribe are contained near the end of the downloaded document.

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Observations

As noted in my newsletter, my intermediate-term timer transitioned to "Cash" as of Friday's close, and I observed that Monday's action with respect to the timer was going to be critical.  The intermediate-termed timer has now provided two consecutive days of "Cash" rating, so I am expecting that this leg up is going to fade.  Here is the timer table:

This is not an indication to do anything other than look carefully at your portfolio and if any positions are "weak", e.g., underwater, you may want to consider reducing the size of those positions.  I do not think that we're going to continue upwards as a group from this point, so unless you've picked a really remarkable set of stocks, any positions that are presently underwater will simply sink deeper.

My Long-Cash Ratio (LCR) table is also showing the first signs of weakness:

Click on the image to enlarge.

The right side of the table is most important right now.  This is a measure of acceleration, and simply put, Monday's action was slowing on an across-the-board perspective.  Continued red on the right side could either be an opportunity to buy, especially if the left side remains green, or if we see red on the left side too, then I would expect my timers to transition to "cash".

If you look closely at the far left you see that the Long-Cash Ratio is at 3.421, down -3% from the previous day.  If you also look you see that' Friday's jump was +22% from 2.902 to 3.527, which is a huge number of stocks that moved to the "long" side.

Moving "long" for a stock (within my system) requires BOTH price movement upward (e.g., demand is driving prices upward), and volume increases.  Friday was a big day.  Whether it was a climax top or not is to be seen -- a value over 3.xxx is an incredibly overbought value and we usually do not stay up that high very long.

To get a sense of this, I watch the following indicator very closely:

Click on the image to enlarge.

This graph plots my GGT index, which is comprised of about 3000 equal-weighted stocks, and the 8-day moving average slope of the LCR.  Over the years I've observed that the 8-day slope of the LCR is a great indicator of leading overall market behavior.

On the right I've circled where we are now.  The value is positive, so the slope is upward.  It keeps moving up and down aggressively, which is somewhat uncharacteristic but it is what it is.  I've also placed a bright red arrow at a point in recent history where the value was in the ballpark of being this high.  Of relevance to you is that the GGT price continued to meander sideways for weeks after we peaked, and then it dropped about 5% or so.  If you look closely at the LCR 8d slope MA, you see it leads the broader market peaks (in general).  It also leads the dips.

There's a pony in there somewhere.  As I said in my newsletter, I'm not a buyer of stocks right now, for increasingly obvious reasons.

Strategy

1) I am looking closely at stocks that I hold that are underwater.  If they do not move upward in the next few days I'll probably unload them, despite just having added a few new positions last week.  I'm specifically talking about my positions in ESS (down -0.51%), GBX (down -1.13%), PSXP (down -2.67%), LTXB (down -3.04%), and XIN (down -3.79%).  The remainder of my portfolio is doing well at the present time.

2) I'm not buying stocks.  

3) I did buy a covered call in VXX yesterday.  Here's the math:

BOT VXX @ 18.83 and STO VXX 160401C18.5 at 0.90 (credit)

This position has a breakeven of 18.83-0.90 = 17.93

The return on the option is 3.1%

We'll see.  I continue to look at VXX puts too; I don't think the VXX is going much lower from here even if we stay in this overbought zone.

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Stock updates are posted in a daily file that I attempt to share by the following morning with all subscribers. To review the stocks that you are holding and see how I evaluate them, you need to be a member of my Dropbox.  Send an email to GreekGodTrading [ a t ] gmail {d o t] com, making the appropriate changes to the email address, with the word "DROPBOX" in the subject and I'll add your email.  I also ask that you subscribe to this list using the link to the left (if you are on the blog), as it's the only way I can communicate with Dropbox users, if the need arises.

Here's how to find me:

InvestFeed/Twitter:  grems8544

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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

16MAR11 Weekend Update

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Summary

The ECB's actions this past week placed a "Put" under the market.  This being said, we are overbought from a Leaders perspective, but still have some room to move with respect to other classes of stocks.

VLOG

I've prepared a video blog for those who want to view on their electronic media.  It's 54 minutes long, so grab your favorite beverage and relax.  The text that follows the video highlights some of the areas I touch in the video.

UPDATE:  YouTube downsamples the quality, so here is a link to the MP4 file on my Dropbox file system.  

1. Click the link:  https://goo.gl/c1K7rR  
2. In the upper RIGHT corner, click the "Download" then "Direct Download" option to bypass YouTube.

Market Leaders -- Short Term Resistance Apparent

I define market leaders as those that are growing REVs and EPS on a quarter-over-quarter (QoQ), trailing 12-month (TTM), and year-over-year (YoY) basis.  These stocks must also be trading in the upper 25% range of their yearly movement, and the 50d MA > 150d MA > 200d MA.  Volume must be at least 100K share average for the past 3 months.

When you apply that filter, you end up with the following basket:

Click on the image to enlarge

The list of Leader stocks is available in my Dropbox "stock" file, If you are not a subscriber to my Dropbox (free), then directions are below on how to become one.  The table can be found on the "Watchlist" tab.

These are all good stocks, and the have consistently been performing well within this market.

When I take that basket and create an index using HGSI, I get the following:

Click on the image to enlarge

I think that this is a really important graph.

The "Leaders" became leaders back in late January, when they broke out and started to pull their related moving averages upward.  At the same time the 13d and 34d moving average slopes crossed and turned positive, which is bullish.  Additionally, the MACD histogram also moved positive in this time, and has been positive since then, except for Friday, March 11.

There are a few take-aways that you need to study from this graph:

1. the MACD histogram has turned negative.  Conclusion:  momentum of this basket of stocks is waning.
2. the slope of the 13d MA (price) has now moved below the slope of the 34d MA (price), but both are still positive.  Conclusion:  on a shorter-term basis, capturing some gains may be prudent, as prices are under pressure.
3. the highs of the index, starting back on 2/29 and continuing through 3/11, are hitting resistance.  Conclusion:  the leaders have most likely run as far as they can on this present leg.

Note:  this is a short-term observation.  If you are a long-term holder then all this means is that the paper gains in your portfolio could drop a bit.  I personally believe that we're good on a medium- and long-term basis.

In support of that last statement, I offer the following:

Greenfield Dividend Stocks -- Long Only

My stock classification system throws stocks into two major buckets:

• Long:  these are stocks that are outperforming their historical averages and are doing so on increased volume and prices
• Cash:  these are stocks that are underperforming their historical averages and are doing so on lower prices and perhaps lower volume

I think we would all agree that dividend-paying stocks are typically viewed as safer than non-dividend-paying stocks, largely because dividend paying stocks often are from companies who are larger, more well established, and are often considered medium-to-large caps with respect to overall market capitalization.

I further restrict my dividend-paying universe to stocks that are showing QoQ, TTM, and YoY improvements in REV and EPS.  Further, dividends must be constant to accelerating on a YoY basis, meaning, this year the stock must be paying at least the same dividends as they did last year, and preferably, a higher dividend this year than last.

Finally, I restrict by dividend stock list to those that are "Long", as defined above.

When I do this, and again, I load the list into HGSI and create an index, we get the following:

Click on the image to enlarge

While you may think this looks like the previously-shown Leader's graph I urge you to look closer.  Your take aways are these:

1. The MACD Histogram is still quite positive.
2. The slopes of the 13d MA (price) and 34d MA (price) are positive, with the 13d > 34d (bullish) -- overall price appreciation
3. The index is trading well above it's 200d MA -- longer-term bullish
4. The index is trading well above it's 13d MA -- short-term bullish.
5. The index started it's breakout much later than the Leader's index, showing that longer-termed investors needed confirmation of this market cycle before they moved off the sidelines.

While the Leader's portfolio is to be considered a momentum portfolio, the dividend list that comprises this index can be considered a true grouping of solid dividend-paying stocks that is somewhat isolated from momentum concepts.  What this means is that most investors in dividend paying stocks are there for the longer-term, so the late movement into these stocks, realative to the Leaders list, and the continued upward performance of this list suggests more staying power for the markets, vis-a-vis the Leader's portfolio, which is showing weakness.

This being said, there are a couple of highs over the past two weeks which appear as the same type of resistance that we saw with the Leaders index.  Friday was a breakout day, so it is possible we will continue higher with dividend paying stocks.

A full list of the dividend paying stocks is too big to post here.  A shortcut to the file is here.

Timer Table

Supporting the statement that a broader move upward may be underway is that my timer system has just confirmed that I should seriously consider being 100% long in the present market, on a short-term, intermediate-term, and long-term basis:

While I like to see this, we are at extremely overbought conditions:

Click on the image to enlarge

The Percent Longs chart tells me how many stocks in the database, on a percentage basis, are rated "Long".  We've moved from single-digit values in January to over 72.7% in March -- a large change for a short period.  I would not be surprised to see some weakness in the next week or two, and I will use that weakness to add to as well as establish new positions.

Ideally, I'd like to see the Percent Long chart drop back into the green zone, but that may be too much to ask for the strength in this market.  At a minimum I will wait until the Percent Long value drops below the solid red line, which is one standard deviation above all the major turning points (the solid red line is currently at 63.3%; the bottom of the pink zone is at 54.9%, which is the average of all the turning points).

Strategy

I'm waiting for "red" to appear on the right side of my Long-Cash Ratio (LCR) table:

Click on the image to enlarge

I talk about this table in the VLOG so watch it for more details.

The right side shows the slope-of-the-slopes, or acceleration, of the number of stocks transitioning from Cash to Long (movements in the LCR indicator).  You see some red on the right side, and the corresponding rows on the left side of the table are still green.  This is good -- we have a slight pullback but not enough to lose the momentum in the markets.  Friday was a strong day, it basically reset us to move upward, so we're not set up for entry on Monday.

I added to only a few positions this past week and while the incremental portions are up, I think I got lucky.  I seriously think we are quite overbought here and I'm intending to wait until we drop below 63.3% longs before I aggressively add to positions.

I need to see "new" red on the right side of that table before I will get my buy list together.

I buy strength, not weakness.  Period.  There are no exceptions to this rule.

I do not buy with a limit order.  I buy with a BUY-STOP order.  This means that the stock must move past a higher level than the previous day before I purchase.  If the order never fills and it is the end of the day, and I'm still interested in the stock, then I lower the BUY STOP to a new level.

I never buy at the open.  I always wait for the book to clear, so I never place orders that activate before 9:45 a.m. ET.  There are no exceptions to this rule.  Same goes for selling.

I only buy GGT Long-Rated stocks.  Period.  I can't think of any exception to this rule.  You can get access to about 3000 stocks and 500 ETFs by subscribing to my Dropbox folder.  Instructions are below.

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I am launching a newsletter that will be updated on the weekends and will focus on longer-termed portfolio holdings.  If you are interested in this let me know and I'll put you on the early list for comments.  I'm still working on the Paypal setup and website security configurations and don't have everything completed yet.  Send me a note to the address below in the next section with "NEWSLETTER" in the subject field and I'll add you to the trials.  Note, this will not last forever -- it will convert to a pay status.

Note, if you are a subscriber to my Collective 2 portfolios then you'll automatically get the newsletter -- I've already added your name to the list.  

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

Stock updates are posted in a daily file that I attempt to share by the following morning with all subscribers. To review the stocks that you are holding and see how I evaluate them, you need to be a member of my Dropbox.  Send an email to pduncan [ a t} v _ t (dot] e du, fixing the address of course, with the word "DROPBOX" in the subject and I'll add your email.  I attended Virginia Tech many moons ago and it is my alumni address, so it should be easy to see how to fix the address -- simply use "vt.edu".  I also ask that you subscribe to this list using the link to the left, as it's the only way I can communicate with Dropbox users, if the need arises.

Here's how to find me:

InvestFeed/Twitter:  grems8544

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

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

Calling the short-term top, close of March 8th

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Summary
With the close of markets on Tuesday, March 8th, I'm calling a local top.  We've been rising in terms of the number of stocks getting a "new long" recommendation for a number of weeks, but the day-over-day amounts are decelerating.  The actionable thing here is to look carefully at your portfolio and if you bought stocks when I did, around the 12th of February, if any of those stocks are underwater, there should be some serious research on whether you are a long-term holder or attempting to ride short-term waves.

My call is that most stocks that are underwater at this point will go deeper underwater as markets digest recent gains.

Do your homework folks.

Justification
The following chart is the slope of the 8-day moving average on the long-cash ratio metric that I've developed.  The sensitivity of the 8-day is good for short-term evaluation -- it means nothing if you are a long-term investor.

Click on the chart to enlarge.

The key takeaway is that we are at the highest levels in 2 years and we've started to drop -- and drop fast.  Looking back in time, sure, we could bounce around here with up and down days, but I think that we're going to see weakness in the coming days/weeks.

Note that the VALUE is positive -- it is still moving upward. Note that the day-over-day change is less than the previous day -- it is decelerating.  You can see this more clear in the next table:

Click on the chart to enlarge.

This is my Long-Cash Ratio table, and it shows all the slopes of the moving averages on the left, and the slopes-of-the-slopes (acceleration) on the right.

On the left we see a sea of green across multiple time frames.  The moving averages all are positive in slope and are moving upward on a day-over-day change.  Overall this is bullish.

On the right we see the start of red appearing -- the day-over-day changes are negative with respect to the previous day, again for the various moving averages.  This means that although we are moving upward, we are doing so with less strength.  The analogy is a ball that you throw in the air -- it still is moving upward, but it is slowing every second.  Eventually, it reaches the apex, and starts to move downward.

The cumulative tick chart also is starting to show one day of weakness:

Click on the chart to enlarge.

First of all, let me say that this is a really strong chart, except for yesterday.  The top shows many more stocks hitting new 52-week new highs than are hitting 52-week new lows -- a buying environment.  The middle plot, with the exception of yesterday, is showing strong algorithmic buying on the NYSE, especially into the end of the day.  The bottom shows the real-time cumulative tick (white), with moving averages, and simply put, we're seeing horizontal buying/selling over the last three trading days but the trends are still positive and pointing upward.

The cautionary signals from above occurred on Tuesday, especially the algorithmic chart in the middle.  It shows that there was strong, net selling into the close, and it started around 2 pm ET.  This is significant, and shows that there were profit takers to the long rise.  In fact, the relatively - flat white CT line over the past three days shows that the bull/bear war is more/less balanced, so there are net buyers AND sellers here.   Finally, the convergence of the moving averages with the slower, solid red line shows the slowing that I've been discussing, so again, caution is advised.

Click on the chart to enlarge.

We've come a long distance in a short period of time.  The chart above plots the percentage of stocks that are "long" rated -- historically outperforming their optimized price and volume levels (e.g. are in demand) -- and you can see we're in the 70% range.  Go back a few blogs and you'll be reading where we were in the single-digit range (it wasn't that long ago).

While we certainly can play up here -- simply look back at history -- over the long-haul buying stocks when we are in the pink zone has not always been a great choice.

On the other hand, buying stocks when we're below the bright green line has always been a great buying spot, and most of my holdings have solid gains right now.

It's far better to buy when we are in the green zone, and almost a sure bet to buy quality when we're below the solid green line -- and we're a great distance from that place right now.

Perhaps this time is different -- perhaps it is not.  I don't know -- your crystal ball is as good as mine.  What I do know is that *I* am not buying stocks right here, but I keep my shopping lists up-to-date.  Money management here is crucial.

This timer table still shows that we're targeting 67% investment and 33% cash.  I'm actually well above the 33% cash level right now -- we changed states into the new target around the 25th and 26th of Feb and we were already outside of the "green" zone in the Percent Long chart that I showed above.  I've been slow to get more invested here, but after getting nailed in Nov/Dec/Jan, I want to edge back into the markets with longer-termed holdings.

Strategy
For those of you who are new to this blog, I'm not a short-term guy, and I'm transitioning to holding stocks over a much longer period.  I do not invest according to the Cash/Long signals of my timers -- I use the timer states to indicate when I should be entering the market.  Exiting the market is done on an individual stock basis, and I also look at the money management levels of the timers to determine equity/cash targets.

There are a number of stocks that I'm watching, and those lists are in my shared Dropbox folder.  Instructions on how to join are below.  Newly developed leaders that are worthy of further research are these:

CMN
HPY
JBSS
VLRS
IESC
LMAT
XRS
AVNU
BAK
DRD
HTHT
VCRA
ZAGG
HOFT

Note that CMN reports earnings tomorrow, before the open.  Also note that HOFT has lower volume than I like, but the underlying performance of these stocks in this recent market cannot be debated.

Do your own diligence.

My personal holdings are doing well overall:

The stock file in the Dropbox has comments/notes on each of these, and you'll be able to see what I'm thinking in terms of longer-term prospects.

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I am launching a newsletter that will be updated on the weekends and will focus on longer-termed portfolio holdings.  If you are interested in this let me know and I'll put you on the early list for comments.  I'm still working on the Paypal setup and website security configurations and don't have everything completed yet.  Send me a note to the address below in the next section with "NEWSLETTER" in the subject field and I'll add you to the trials.  Note, this will not last forever -- it will convert to a pay status.

Note, if you are a subscriber to my Collective 2 portfolios then you'll automatically get the newsletter -- I've already added your name to the list.  

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

Stock updates are posted in a daily file that I attempt to share by the following morning with all subscribers. To review the stocks that you are holding and see how I evaluate them, you need to be a member of my Dropbox.  Send an email to pduncan [ a t} v _ t (dot] e du, fixing the address of course, with the word "DROPBOX" in the subject and I'll add your email.  I attended Virginia Tech many moons ago and it is my alumni address, so it should be easy to see how to fix the address -- simply use "vt.edu".  I also ask that you subscribe to this list using the link to the left, as it's the only way I can communicate with Dropbox users, if the need arises.

Here's how to find me:

InvestFeed/Twitter:  grems8544

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

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

Parity

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If you are on the blog page, please subscribe to this using the "Follow by Email" link to the left.  Having your email helps me see the number of folks reading this.

Summary

Buying continues despite the back/forth motion of the prices.  Two of three timers are "long" and indicating that on a short-term and intermediate-term basis we should be looking to the long side.  We have achieved, since late November/early December, database parity, which means that we have equivalent numbers of cash-rated stocks as well as long-rated stocks.  Simply put, we've come a long way in a short period of time.  I'm wanting to add to my positions, but we're overbought.  Patience...

Percent Longs

Click on the image to enlarge.

The chart above shows the percent longs in the database.  We just crossed 50%, and given that we were in single-digits in January, many, many stocks have moved upward in price and volume.

The "cloud" I'm watching is that blue line I've drawn.  Artificial -- yes.  Does it mean anything?  Probably not, because it's not a ceiling that is watched by anybody.  BUT, the constant lower highs since 2013 that show turns downward cannot be ignored.

1) we are between the pink and the green zones, which is a good short-term indicator that whatever direction we're in will most likely continue.  We're heading up, so I expect to head up.
2) when we get between 55-60% longs I'll not be surprised if we start a pull backwards.

So, a bit about buying:  the chart above also indicates that it's generally not a great idea to add to buys when we're in the zone between the pink and green areas.  We made most of our purchases when we were below the bright green line, and that's been a great decision in the past.

8-Day Slope of the Long-Cash Ratio Moving Average

Click on the image to enlarge.

The chart above *IS* actionable.  The 8-day EMA of the LCR has been a really good canary to getting into the markets, as well as getting out.  This is a short-term signal, so when it's really positive, the changes of going higher are limited.  We've had a long series of up days, and while it certainly can continue -- take a look at the chart.  We've not moved higher than present levels and stayed there for any major length of time, so risk is certainly high right now.

Take away:  Be careful buying stocks right now -- we've had quite a short-term run upward.

Timer Table

I was somewhat concerned about the Intermediate Termed Timer switching over, and the moving backwards, then forwards again, but 3 days usually works well overall.  It could change any day (see above), but for now, 33% is the target cash level.  If stocks are attractive I'll buy a position.

Cumulative Tick

  Click on the image to enlarge.

This cumulative tick chart continues to look mixed to good overall.  The last two days have been so-so in terms of algorithmic buying, but Wed/Thurs of last week were very strong buying sprees.

In the end, the positive slope of the solid red line is a great indicator -- stocks are being bought, at least on a short-term basis.

Long-Cash Ratio Table














Click on the image to enlarge

I've described this table elsewhere so I won't elaborate too deeply.  On the left we see that the LCR -- the ratio of the number of longs to the number of cash-rated stocks -- is now at parity.  Woo woo!

The next column shows a long series of up days in the LCR -- this is indicative of constant buying driving prices and volume upward.  This shows that we've moved from about 200 stocks to 1500 stocks that are "newly" long in a very quick period, which is the resilience of the market off the bottom.  No way to read this except as strength.

The sea of green in the middle to the right sides of the table show that on all measured time frame that we're heading upward.  This too is great.

Strategy

I'm targeting 67% equity / 33% cash, but we're overbought right now.  I'm not overly interested in buying right here.  This level is driving by my timer table.  The timer table is driven by the LCR.

The LCR table is a sea of green.  It can't last forever, but for now there is no weakness in buying.  If a stock looks good a trial position may be okay.

I continue to watch stocks that are showing great fundamentals, those that pay a dividend, and that are long-rated.  The full list is in my dropbox file -- instructions on how to get it are below.

I have one portfolio that is sold on GGT recommendation, the other that is sold on recommendation as well as fundamentals.  I've had to sell NEE, MATX, and KIM due to bad fundamentals after the last earnings report and GGT signal.

Join my Dropbox folder to see how my stocks, as well as stocks that you are holding, are doing in terms of my ranking system.

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

Stock updates are posted in a daily file that I attempt to share by the following morning with all subscribers. To review the stocks that you are holding and see how I evaluate them, you need to be a member of my Dropbox.  Send an email to pduncan [ a t} v _ t (dot] e du, fixing the address of course, with the word "DROPBOX" in the subject and I'll add your email.  I attended Virginia Tech many moons ago and it is my alumni address, so it should be easy to see how to fix the address -- simply use "vt.edu".  I also ask that you subscribe to this list using the link to the left, as it's the only way I can communicate with Dropbox users, if the need arises.

Here's how to find me:

InvestFeed/Twitter:  grems8544
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

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-termed Timer Transitions Long - Feb 22 Close

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Summary

Markets are short-term overbought.  My intermediate-termed timer has transitioned long, which raises my equity target to 67% (and of course my cash target to 33%).  As opportunities present themselves I will add to existing positions and as new stocks meet my criteria, I'll add them.

Timer Table

It will be important for the intermediate-termed timer to remain long if this signal is to mean anything:

When we are at transition points the market can whipsaw the signals, causing back-forth-back-forth movement of the indicator.  This will be something to watch for, and I will post an entry if this happens.

The intermediate-termed timer works by looking at the moving average slopes of the 13d and 34d price of the GGT index.  The GGT index looks like the Russell 2000 or the NAS 100, depending upon market mood.  It then looks at the moving-average slopes of the Long-Cash-Ratio, and if the slopes are moving upward (they are, see the LCR table below), then we can get an entry signal.  This is where we are today.

LCR Table

Click on the image to enlarge.

I've discussed this table in other entries so I'm not going to go into the details.  I've been asked to prepare a video on it and I will.

Simply put, the slopes of the different moving averages of the long-cash ratio indicator are all positive, hence the green on the left side of the table.

The right side of the table shows a sea of green, indicating that on a day-over-day basis, we are accelerating upward in the number of stocks that are moving to a "long" state, which means that they have higher price and volume on a day-over-day basis than they have had historically.  This, needless to day, is a great situation.

We can pull back from here, and since we are somewhat overbought, I think we will.  If the chart above remains intact will determine what I do next.

Cumulative Tick

Click on the image to enlarge.

For the first time this year we have the 52-week new highs (upper plot, green) exceeding the 52-week new lows (same plot, red).  

The CT continues to advance, but yesterday (2/22) saw some coasting overall.  The market is digesting gains and this is healthy.

This is a good chart.  Again, while we may be short-term overbought, there is nothing on this chart to indicate that we should do anything other than buy and hold stocks.

Strategy

Buy strength. 

I'm raising my equity position through buying strength in my accounts, starting with my present holdings and will include new stocks as they avail themselves.

I'm watching for short-term weakness and consolidation.

Join my Dropbox folder to see how my stocks, as well as stocks that you are holding, are doing in terms of my ranking system.  

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Stock updates are posted in a daily file that I attempt to share by the following morning with all subscribers. To review the stocks that you are holding and see how I evaluate them, you need to be a member of my Dropbox.  Send an email to pduncan [ a t} v _ t (dot] e du, fixing the address of course, with the word "DROPBOX" in the subject and I'll add your email.  I attended Virginia Tech many moons ago and it is my alumni address, so it should be easy to see how to fix the address -- simply use "vt.edu".  I also ask that you subscribe to this list using the link to the left, as it's the only way I can communicate with Dropbox users, if the need arises.

Here's how to find me:

InvestFeed/Twitter:  grems8544

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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

Continuing to Buy for the Short Term - Equity Target 25-33 percent

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Snapshot
We could be entering the 4th day of gains for the broad market, which puts it beyond simple short covering.  I bought stocks yesterday, and will be buying a few more today.  Indicators continue to show increasing strength.

Long-Cash Ratio Table
We have further gains -- more stocks transitioned to "New Long" on Wednesday than any time this year.  This means both price and volume went up significantly for those issues.

Click on the image to enlarge.

Regarding the LCR Table, I've described it in other blog entries so please review past ramblings to familiarize yourself.

Cumulative Tick
Continued buying.  Same situation as the LCR Table explanations -- I've detailed what this chart means and how to interpret numerous times in recent history -- read backwards a few entries and you'll understand.  I also posted a video over the weekend which covers it.

Click on the image to enlarge.

Timer Table
Continue entering positions on a short-term basis.  Investment level targets for me are between 25% and 33% due to continued high risk of failure of this signal:

Recent Orders
I entered 5 new positions on Wednesday:

Entered	Filled/Canceled	Symbol	Stop	Filled Price	Link to Analysis
2/17/2016 7:31	2/17/2016 10:07	BSET	29.02	29.36	https://goo.gl/wqziDt
2/17/2016 7:32	2/17/2016 9:44	CR	48.45	48.96	https://goo.gl/fgp6ez
2/17/2016 7:41	2/17/2016 9:49	EQM	69.16	69.47	https://goo.gl/jxIaV8
2/17/2016 7:51	2/17/2016 9:53	KIM	26.83	26.84	https://goo.gl/7nuFuP
2/17/2016 7:54	2/17/2016 9:44	ORIT	16.23	16.25	https://goo.gl/lkavgI

I have a number of orders pending for today.  Again, I buy strength, not weakness, so if a stock did not take out the previous day's high by 0.1% the order will remain unfilled.

Strategy

Pretty simple.  I reviewed "New Long" recommendations in my stock tracking system.  Subscribers to my Dropbox have free access to that firehose (lots of information in that file).  Those that met REV and EPS growth criteria, while having a good history of growth, are good candidates.

Note that I'm buying for the longer term.  The stocks I entered above will remain in my portfolio until they change in their growth criteria.  All have reported earnings for this quarter so I'm not expecting any new news until April.  I'll sell on a case-by-case basis only.  I'm slowing my portfolio turnover rate and intend to hold these because of their dividend status and underlying good quality background.

I'm certainly not recommending that you buy these stocks.

It's important that when a signal occurs to enter (or to exit) that it is done quickly.  My goal is to get to 25-33% invested fairly quickly, then let the noise settle down.

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

Stock updates are posted in a daily file that I attempt to share by the following morning with all subscribers. To review the stocks that you are holding and see how I evaluate them, you need to be a member of my Dropbox.  Send an email to pduncan [ a t} v _ t (dot] e du, fixing the address of course, with the word "DROPBOX" in the subject and I'll add your email.  I attended Virginia Tech many moons ago and it is my alumni address, so it should be easy to see how to fix the address -- simply use "vt.edu".  I also ask that you subscribe to this list using the link to the left, as it's the only way I can communicate with Dropbox users, if the need arises.

Here's how to find me:

InvestFeed/Twitter:  grems8544
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

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

New Entry Sig-33% Equity Target-Feb 16 Close

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If you are on the blog page, please subscribe to this using the "Follow by Email" link to the left.  Having your email helps me see the number of folks reading this.

Summary

Action over the past two trading days has caused a whipsaw in the short-term timer, indicating that I should attempt to become 33% invested (67% still in cash).  I'm buying quality stocks today (Wednesday, Feb 17)

Timer Table

Here's the most recent timer table:

The left column is the short-term timer, the middle column is the intermediate-termed timer, and the right column is the long-term timer.

The RIGHT column is the most important -- we are not in an uptrending market, and as such, risk is high on the longer-term.   I'm wrestling with limiting my exposure to less than 25% because the right column is recommending the sidelines.

My money management system indicates that 33% equity / 67% cash is prudent.  Certainly no more exposure than that is warranted.

Of concern is that we are whipsawing here.  This means that we were long, we went to cash, and now the system is back to long (on a short-term basis).  This is a dangerous place to be because we are right at thresholds.  

LCR Table

Part of the picture is that stocks are being bought:

Click on the image to enlarge

I've discussed the details of this table elsewhere in this blog so read backwards a few entries.  If you have questions, ask.

Of importance here is that we're back to the "height" of where we were over the last two weeks, at least in terms of strength of this move upward, so the signal is hard to ignore.  Stocks are still oversold on a historical basis so over the long haul there is plenty of fuel to take us higher.

Caveat emptor, to be sure.  Do your diligence.

Cumulative Tick

The CT verifies that this market is being bought:

Click on the image to enlarge

Tuesday's action saw the white line cross the red line from below, pulling the entire ribbon upward, and indicating that there is strength over the past two days.  If you look closely you'll see it actually started near the end of Thursday's action, so I do think it real.

Strategy

Subscribers of my Dropbox files will see that I have updated the stock file and that I have new purchases pending in the Acceleration and Dividends portfolios.

Subscription is free and instructions are below.

I buy strength.  My setup is as follows:

Determine the price that is 0.1% above the previous day's high.  Set a BUY STOP at that level, effective after 9:45 a/ET.  Orders are GTC.  If the order does not fill, lower the value that evening and try again tomorrow.  Never raise the value once the order is placed (some stocks spike in the first 15 minutes of trading then settle down after the news fades).  Continue the process until the order is filled or the stock transitions to a "Cash"-rated stock (again, see my stock file in the Dropbox).

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

Stock updates are posted in a daily file that I attempt to share by the following morning with all subscribers. To review the stocks that you are holding and see how I evaluate them, you need to be a member of my Dropbox.  Send an email to pduncan [ a t} v _ t (dot] e du, fixing the address of course, with the word "DROPBOX" in the subject and I'll add your email.  I attended Virginia Tech many moons ago and it is my alumni address, so it should be easy to see how to fix the address -- simply use "vt.edu".  I also ask that you subscribe to this list using the link to the left, as it's the only way I can communicate with Dropbox users, if the need arises.

Here's how to find me:

InvestFeed/Twitter:  grems8544

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

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