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Liquidity System Buy Signal 8/21/14

|Includes:iShares Russell 2000 ETF (IWM), PTY, XLF

XLF went above 23.06 today (8/21/14), which is a signal to sell TLT and buy IWM.

System 1 had 807 shares of TLT. At 3.55 p.m. the TLT price was $116.59. No dividends were paid since 8/1. So the sale of 807 shares fetched $94,088. The 3.59 p.m. price for IWM was $115.22. So 816 shares were bought. The system made a little money, but it paid a much higher price for IWM than where they were sold.

System 2 had 815 shares of TLT. They fetched $95,020. Half that is $47,510, which could buy 412 shares of IWM. At $18.60 per share, the $47,510 bought 2570 shares of PTY. This was also bought at a much higher price than it was sold for on 8/1.

Since Feb. 3, 2014, the Russell 2000 is up 5.98%, and 2 dividends have been paid. System 1 is down 5.91%, and system 2 is down 4.98%.

The bubble continues to inflate with September and the end of the taper approaching. But, perhaps the bubble can continue its inflation. Otherwise, the stop-losses are fairly tight.

Go back into TLT if XLF drops below 22.63, or the R2000 drops below 1133.14. These values will not vary much for several weeks.

Disclosure: The author is long TLT, IWM, NLY, REM.

Stocks: IWM, PTY, XLF