Guardian Checklist for Thursday 2/28/08
Published Wednesday 2/27/08
by Mark S. Young, President of Equity Guardian Group, LLC.
Investment Management & Research
Intermediate-term Outlook (weeks):
Seasonal Cycle: Positive.
Coppock Breadth Indicator: Buy. The CBI was down 0.1 to 230.9, 0.7 above the exponential.
Weekly MACD: Neutral. Turning.
Bull/Bear Market Indicator: Bear.
Conclusion: We are in a Cyclical Bear Market. This is just a condition but it means more care must be exercised. The Seasonal Cycle is positive. The Weekly MACD is turning up.
Short/Intermediate-Term
NYSE Cumulative A/D Volume: Positive.
ITBM: Positive.
Summation: Positive.
KTT*: Neutral.
CCI Daily: Negative.
10-day ARMS: Neutral.
MACD Daily: Positive.
21-day MA: Positive.
Conclusion: Longs are favored, but we really could stand to sell off a bit.
Short-term
Stochastic Turn Spotter: Sell.
VIX 30': Negative.
MACD 60': Sell.
Moving Averages: Positive. Watch the 1361-1364 area.
Conclusion: Shorts are favored, but moreso beneath the MA's.
Last time, I said that selling was reasonable, since we were overdone, but if we didn't see some sellers show up, things could get crazy. We got the sell off and it looks like we'll get some more.
No real damage was done and window dressing is likely to support. If we can avoid any really bad news, I think the market can find it's feet pretty quickly after a bit more selling.
Now, remember, this is a Bear market still, so sell offs can be a bit deeper than we'd ordinarily think, but if things have really turned up, I'd expect selling to be contained.
Sentiment is very supportive here, though the OEX P/C suggests that at least some early selling is virtually a lock.
KTT traders are Neutral.
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):
50% long DIA at 127.54.
50% long UWM at 50.61
I'm about fully long. UWM looks much better now. I may do some selling on strength.
Mutual Fund Models Position Summary
1) STAMP
2) Rydex Naz Trader
1)*Real Money* Seasonal Trading Asset Management Program (All weightings are approximate)
75% Money Market.
25% 2X Dow long fund
0% 2X Russell long fund
I may go back into the 2X Rut fund if I see a shot. I'm also looking at Velocity.
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 Asset Trigger: Neutral.
MACD Risk Reducer: Positive.
CCI Entry Improver: Pending Sell.
NDX Stochastic: Neutral.
50% Money Market.
50% Velocity.
Long 50% position in Velocity. Doubled up. Watch for an alert. I expect the Naz to wake up here shortly.
QQQQ Trading model: 50% long 47.47. Doubled up at 46.95. We may double up or dump if 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 information: EquityGuardianGroup.com
Mark Young
President
Equity Guardian Group, LLC.
859-393-3335
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