Guardian Checklist for Thursday 9/07/06
Published Wednesday 9/06/06
by Mark S. Young , President of Equity Guardian Group, LLC.
Investment Management & Research
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Intermediate-term Outlook (weeks):
Seasonal Cycle: Negative.
Coppock Breadth Indicator: Positive. The CBI was down 0.7 to 225.1, 0.6 above the exponential.
Weekly MACD: Positive.
Bull/Bear Market Indicator: BULL.
Conclusion: We are solidly back in a Cyclical Bull Market. The Seasonal Cycle is still negative and the Weekly MACD is positive.
Short/Intermediate-Term
NYSE Cumulative A/D Volume: Positive.
ITBM: Positive.
Summation: Positive.
KTT*: Sell.
CCI Daily: Neutral.
10-day ARMS: Neutral.
MACD Daily: Positive.
21-day MA: Positive.
Senticator: Neutral.
Conclusion: Longs are still favored but a lot of damage was done.
Short-term
Stochastic Turn Spotter: Neutral.
VIX 30': Negative. Not far from a Buy.
MACD 60': Negative.
Moving Averages: Negative. Watch the 1307-1308 area.
Conclusion: Shorts are favored. Watch the MACD or the VIX 30' for clues of a turn back up.
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Last time, I said that breadth was nicely positive as were the daily and weekly trends, and new highs were adequately robust. The supply and demand equation for stocks also remains very, very positive. I asked why would one want to pick a top in that situation. The market answered with a simple "Profit?"
Seriously, we understood the case for lower prices, but we also saw an equally good case for higher prices.
For all that selling, we still are in a daily and weekly up trend. Breadth was pretty ugly, but the indicators remain positive. Expiration is next week, so, if things go according to plan, we could get a low tomorrow. I'm a bit worried about breaking down out of a few rising wedges.
Sentiment, meanwhile, is pretty negative on the boards and elsewhere. I really see no good sign of a top.
The KTT traders no longer have a Sell. We may get one later, however.
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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.
25% SPY at 125.20
and
25% QQQQ at 36.70 or better.
We may add back longs on weakness or sell on a big spike or a turn.
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Mutual Fund Models Position Summary
1) STAMP 50% Money Market.
25% Velocity
25% Titan
2) Rydex Naz Trader 0% Money Market.
100% Velocity
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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 lighten up depending upon the nature of the next move.
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: Positive.
Rydex Ratios Trigger: Neutral.
MACD Risk Reducer: Positive.
CCI Entry Improver: Neutral.
NDX Stochastic: Neutral.
We are long a 100% position in Rydex Dynamic OTC (aka Velocity). We're still under water but we're looking better. Sell if the NDX prints 1600.
QQQQ bought 100% long at 41.81. Doubled up at 41.50. Exit when the Naztrader does.
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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.
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See our Web site for more
EquityGuardianGroup.com
Mark Young
President
Equity Guardian Group, LLC.
859-393-3335
