Guardian Checklist for Friday 1/05/07
Published Thursday 1/04/07
Ranked in the top 10 for the year by TimerDigest
by Mark S. Young , President of Equity Guardian Group, LLC.
Investment Management & Research
Intermediate-term Outlook (weeks):
Seasonal Cycle: Positive.
Coppock Breadth Indicator: Positive. The CBI was flat at232.1, 0.3 above the exponential.
Weekly MACD: Sell. Not very strong, however.
Bull/Bear Market Indicator: BULL.
Conclusion: We are solidly in a Cyclical Bull Market. The SeasonalCycle is still positive and confirmed. The Weekly MACD is negative but very flat.
Short/Intermediate-Term
NYSE Cumulative A/D Volume: Positive.
ITBM: Negative. Confirmed.
Summation: Negative.
KTT*: Neutral.
CCI Daily: Neutral.
10-day ARMS: Neutral
MACD Daily: Negative
21-day MA: Positive.
Sentiment: Negative-to-
Senticator: Positive.
Conclusion: Shorts are still favored but iffy.
Short-term
Stochastic Turn Spotter: Neutral
VIX 30': Positive.
MACD 60': Negative.
Moving Averages: Negative
Conclusion: Shorts are favored. Especially if the VIX 30' turns upagain.
Last time, I said that I'd not be surprised at all by another runup to shake more Bears loose. We got it. Yet things still look a bit iffy.
Here's the situation. Technicals and sentiment say, "look for lower prices".Cumulative breadth, however, is stubbornly positive. Seasonality is good too.Additionally, in looking at the past 21 presidential cycles I've noted that only 5Januarys were down in years prior to elections. Of those, none were down much (on aclosing basis). If we get some weakness here, the odds on play is to look for higherprices into month end and if not then soon there after.
Next, we have to deal with "Weird Wolly Wednesday"--the goofy action around theWednesday prior to expiration. My feeling is that we trade down into that zone. If we canbuild some pessimism, we'll probably bounce. If not, we may have a weak expiration. If weDO trade down or flat for the month, history says that we've got an 80% chance of a rally.
If you want to short tomorrow, watch the VIX 30' MACD.
The KTT traders are flat.
Not everyone likes a short-term trading model, and would likesomething that hangs onto bigger moves and reflects a less frenetic trading pace. If youwant to know how I would trade based upon the big picture and the sentiment, the followingtracking portfolio is it.
100% Money Market
We sold 25% SPY from 125.20 at 138.24.
We're looking both ways.
Mutual Fund Models Position Summary
1) STAMP
2) Rydex Naz Trader
1)*Real Money* Seasonal Trading Asset Management Program (All weightings areapproximate)
100% Money Market.
We went fully to cash on 11/22. We will remain flexible here.
This is a very conservative approach (~1/3 the risk of the market), using both long andshort funds as well as the occasional favored sector/stock idea. All performance is net offees, commissions, and interest. Your results may vary, especially if we trade for ouraccounts intra-day, and standard disclaimers apply. We use discretion. For furtherinformation, call us at 1-800-769-6980.
2) Rydex Naz Trading Model
Weekly Trend: Negative.
Rydex Ratios Trigger: Negative.
MACD Risk Reducer: Negative.
CCI Entry Improver: Neutral.
NDX Stochastic: Neutral.
We are flat.
QQQQ Trading model: Flat
Trading is not only risky, but tradingdifferent vehicles also entails unique risks. Traders can lose a significant amount ofmoney trading options, and more in futures. Mutual funds have certain trading limitationsthat must be understood before you undertake any market timing approach. Traders shoulddiscuss the forgoing issues with their broker before taking any trades. We aren't youradvisor unless you have a signed contract with us. You are responsible for your owntrading decisions and results. Take your time and do your homework. Past performance is noindication of future returns.
See our Website for more: www.EquityGuardianGroup.com
also visit
President
Equity Guardian Group, LLC.
859-393-3335
