Guardian Checklist for Wednesday 6/28/06 Published Tuesday 6/27/06
by Mark S. Young , President of Equity Guardian Group, LLC.
Investment Management & Research
Intermediate-term Outlook (weeks):
Seasonal Cycle: Negative.Coppock Breadth Indicator: Negative. The CBI was down 0.4 to 221.2, 0.5 beneath the exponential.
Weekly MACD: Negative.
Bull/Bear Market Indicator: Bull. Turning.
Conclusion: We are still in a Cyclical Bull Market, but just barely. The Seasonal Cycle negative and the Weekly MACD is Negative. This is a major warning. It's also probably early. They usually are.
Short/Intermediate-Term
NYSE Cumulative A/D Volume: Negative.ITBM: Preliminary Buy. Still unconfirmed.
Summation: Buy. Unconfirmed. NDX is positive and confirmed.
KTT*: Neutral.
CCI Daily: Buy.
10-day ARMS: Neutral. Falling Fast.
MACD Daily: Positive.
21-day MA: Negative.
Senticator: BUY.
Conclusion: Longs are favored, but we need just a better breadth, at least.
Short-term
Stochastic Turn Spotter: Pending Buy.VIX 30': Negative.
MACD 60': Sell.
Moving Averages: Negative. Watch the 1246-1247 area.
Conclusion: Shorts are favored.
Last time, I said that we had one, rather serious worry and that was ISEE. We had a 206 reading last night and that was solidly up in Sell territory. We allowed for that sell to be wrong, thanks to an offset from the low OEX/P/C ratio, but it wasn't enough to support the market and they took it down all day.
That's why we waited for confirmation. It's no fun and things are starting to look a bit bad going into the Fed's meeting. Those guys don't inspire confidence and the market is going to worry about them doing their worst. That increases the odds of the gap below being filled.
And, of course, a free fall is possible too, BUT it's not a great bet. We've got plenty of accumulated Bearishness and a hint of good news could start something exciting. Also, the daily trend is still positive as well (but not confirmed). We don't want to be too Bearish even short term. Remember, people sell at market lows for short term reasons.
All we can do is wait for the turn and confirmation.
The KTT traders sit on their hands.
Not everyone likes a short-term trading model, and would like something that hangs onto bigger moves and reflects a less frenetic trading pace. If you want to know how I would trade based upon the big picture and the sentiment, the following tracking portfolio is it.
Ideal ETF Portfolio (tracking portfolio):
25% SPY at 127.70
and
25% QQQQ at 42.10
and
25% QQQQ at 41.55.
and
25% QQQQ at 39.17.
and
25% SPY (on margin) at 126.75
and
25% SPY (on margin) at 125.20
We're very long. We may add.
Mutual Fund Models Position Summary
1) STAMP 50% Money Market.
25% Velocity
25% Titan
2) Rydex Naz Trader
0% Money Market.
100% Velocity
1)*Real Money* Seasonal Trading Asset Management Program
(All weightings are approximate)25% Velocity.
25% Titan
50% Money Market.
We are fully long. We may add, but we need confirmation.
This is a very conservative approach (~1/3 the risk of the market), using both long and short funds as well as the occasional favored sector/stock idea. All performance is net of fees, commissions, and interest. Your results may vary, especially if we trade for our accounts intra-day, and standard disclaimers apply. We use discretion. For further information, call us at 1-800-769-6980.
2) Rydex Naz Trading Model
Weekly Trend: Negative.Rydex Ratios Trigger: Positive.
MACD Risk Reducer: Buy.
CCI Entry Improver: Neutral.
NDX Stochastic: Neutral.
We are long a 100% position in Rydex Dynamic OTC (aka Velocity). We're way under water and not happy about it. The odds, however favor a rally, so we ought to get a decent exit.
QQQQ bought 100% long at 41.81. Doubled up at 41.50. Exit when the Naztrader does.
Trading is not only risky, but trading different vehicles also entails unique risks. Traders can lose a significant amount of money trading options, and more in futures. Mutual funds have certain trading limitations that must be understood before you undertake any market timing approach. Traders should discuss the forgoing issues with their broker before taking any trades. We aren't your advisor unless you have a signed contract with us. You are responsible for your own trading decisions and results. Take your time and do your homework. Past performance is no indication of future returns.
See our Web site for more
www.EquityGuardianGroup.com
Mark Young
President
Equity Guardian Group, LLC.
859-393-3335
