Seeking Alpha

Michael Clark's  Instablog

Michael Clark
Send Message
Michael J. Clark was born and raised in Sinclair, Wyoming. He is a poet, novelist, artist, historian, and market analyst. His fine arts portfolio can be found at the following address: http://www.hoalantrangallery.com/MJC2.htm His writing portfolio can be found at:... More
My company:
Clark's Gate Timing System ©
My book:
TURN OUT THE LIGHTS
  • CGTS DAILY TRADING SIGNALS: WEDNESDAY, 22 SEPT 2010. TBONDS ARE COMING BACK; GOLD STOCKS ARE CONTINUING TO CLIMB. CAN STOCKS KEEP ASCENDING? 0 comments
    Sep 22, 2010 8:27 AM | about stocks: TNK, BBRY, AUQ, JNK, FXY, FNMA, FMCC, CHOP, CBPO, BRK.B, APOL, ABX
    CLARK'S GATE TIMING SYSTEM
      FOR: 22 September 2010, Wedesday


    CGTS VIEW

    An attempted rally yesterday, sponsored by the 'we'll do what we need to do' proclation of the FOMC board.  Continuing to ease rates?  Continuing to sponsor more debt accumulation?  Continuing to dig a hole deeper in order to get out of the hole?

    Yes.

    The rally sputtered a bit.  Asia was listless; Europe was lower at the open.  What the Fed was really telling us was that they don't have any idea what to do.  The last round of easing didn't work.  Another round of easing: while should it work this time?  I have written before: Cheap money at the beginning of the growth period of the Business Cycle (1983, for instance; 1947, for instance; 2019, for instance); begin tigheningt money at the end of the growing season in the Business Cycle (1929 for instance; 1965, 2001...)  Bennie Bernanke is like a gardener who has his seasons mixed up; and all his planting, his watering, his ministrations won't work; he has to spend this dark season getting rid of all the weeds that have taken over his garden.  The weeds are the debts that are chocking the new seeds in their cribs.  The weeds are the TBTFail institutions, the Old World Economic Emperors, who are afraid of the New World they're trying to pretend they don't have to confront.  They WILL have to confront this new environment.  Extend and pretend is an attempt to preserve the status quo, at any cost, to preserve the Power Elite that govern America through the massive institutions that have purchased the American government in order to apply steady manipulation in the direction this Power Elite wants the country and the world to go.  And Ben is the captain of this boat -- sort of.  A captain who can no longer find his sextant and can't see the stars, and never was very good at navigation anyway.  That's what the Neoclassical patrons of the Higher World Economics are supposed to provide for him.  But their messages are either being misconstrued or the ideology simply doesn't work -- works in textbooks only.

    Can stocks advance while TBonds are advancing?  Recently, it's been either one or the other.  TBonds have been in a small selloff over the last 10 days, coinciding with the stock markets' recent advance.  We're about to find out if its either stocks or TBonds, because the selloff in TBonds seems to be over.  Look at our Yield/Bond charts below in our Index Section.  We're getting a buy signal on IEF, the 10-Year + TBond ETF, and we're getting sell and shortsell signals on TBond Inverse ETFs and Yield Appreciation ETFs.

    If TBonds are getting ready to rise again, does this mean we are on the verge of more revelations of European sovereign debt problems threatening to swamp the Old Country?  Stay tune.  Should be interesting.

    MARKET MOMENTUM

    Being a compulsive 'tinkerer' with market data, I have created a new momentum indicator.  Since M5/M5 Average Differential tends to move between overbought levels above +100 and oversold levels below -100 I modified an existing indicator to create the M5/M5 Average Differential ASP (Sum Plus) which normalizes such movement, giving a +1 reading when the indicator is advancing and a -1 reading when the indicator is declining, and a 0 reading when the indicator is neither advancing or declining, which is quite often.  The neutral reading doesn't tell me if the issue is 'positive neutral' or 'negative neutral'; so I had to create another indicator for neutral readings to tell me if its latest 'non-neutral' reading was up or down.  (See "G" below.)  Now this does us all no good unless the indicator is shadowing or leading prices up or down.  I charted this new indicator in the Index charts I'm showing today (see below).  There is a pretty strong correlation between an advancing price of an issue and an advancing M5/M5Average Diff ASP.  Then, I applied this indicator to the roughly 500 issues I follow, asking how many were in advancing moves and how many in declining moves.  This indicator should be VERY SENSITIVE to large scale moves.  Today we have 214 advancing issues, and 226 declining issues.

    Most of the momentum indicators we follow lost ground after Tuesday's trading.

    We have a sense we are getting near the top of this rally.  We are waiting for some strong notice that this has occurred however.  We are getting both buy and sell signals, both shortsell and cover signals.  Our long-term trading systems are still predominantly long.
     
    MARKET MOMENTUM
    WED
    THURS
    FRI
    MON
    TUES
     SUMMARY
    15-Sep
    16-Sep
    17-Sep
    20-Sep
    21-Sep
    GSPC - S&P 500 Index
    1125.07
    1124.66
    1125.59
    1142.71
    1139.78
     
     
     
     
     
     
    A. Trading Mom +
    203
    175
    215
    311
    232
    Trading Mom -
    46
    49
    25
    15
    22
    Bull %
    46%
    40%
    49%
    70%
    52%
    B. Mom Trend +
    293
    294
    394
    397
    392
    Mom Trend -
    69
    68
    47
    45
    49
    Bull %
    66%
    67%
    89%
    90%
    89%
    C. Advance/Decline +
    225
    194
    237
    340
    259
    Advance/Decline -
    136
    168
    205
    102
    183
    Bull %
    51%
    44%
    54%
    77%
    59%
    D. Long Trade
    171
    138
    178
    257
    205
    Short Trade
    35
    36
    15
    8
    10
    Bull %
    35%
    35%
    35%
    35%
    35%
    E. IT Trend +
    251
    253
    342
    345
    363
    IT Trend -
    109
    107
    98
    95
    76
    Bull %
    57%
    57%
    77%
    78%
    82%
    F. M5 3 M5 Avg Dif +
    273
    272
    346
    366
    360
    M5 3 M5 avg Dif -
    88
    89
    95
    75
    81
    Bull %
    62%
    62%
    78%
    83%
    81%
    G. M5 3/M5 Avg Diff Top
     
     
    17
    28
    30
    M5 3/M5 Avg Diff Bottom
     
     
    5
    6
    6
    Bull %
     
     
    77%
    82%
    83%
    H. M5/M5 Avg Diff TB Asp+
     
     
     
     
    214
    M5/M5 Avg Diff TB Asp-
     
     
     
     
    226
    Bull %
     
     
     
     
    49%
    Avg of avgs
     
    53%
    51%
    64%
    66%
     
     
     
     
     
     
    A. "Trading Momentum" = M4 ASP +1 vs -1; +1 bullish and -1 bearish.
     
     
     
    B. "Momentum Trend" = M4 ASP (+1 - 0) vs (0 - (-)1); in BUY ZONE or SELL ZONE.
     
    C. "Advance/Decline" = M4 ASP tick up vs tick down = most recent move up or down;
     
    D. "Long Trade/Short Trade" = M4 ASP +1/ Int-Trend positive vs M4 ASP -1/Int-Trend negative;
     
    E. "IT TREND" = Int-Trend positive vs negative. Slowest to turn. Most important long-term measure.
    F. "M5 3 vs M5 3 Average Differential" = Above zero bullish; below zero bearish. Perhaps best indicator for intermediate term moves.
    G. 'M5 3 vs M5 3 Average Differential' = Those registering above +100 (top) vs those registering below -100 (bottom).
     
    INDEX PICTURES

    DJIA, Dow Jones Industrials: the new bottom pane shows a new indicator that meaures the peaks and troughs of the M5/M5Average Differential (Third Pane Down, black line).  Tops and bottoms in this indicator seem to coincide roughly with trading tops and bottoms in prices.  This suggests we are very near a trading top.




    GSPC, S&P 500 Index: we said yesterday that the M5 Momentum Indicator (brown line, Top Pane) was bending back up, a very positive sign.  Well, it did bend back up; and now GSPC is taking out resistance, establishing a new high.  But watch out if M5 Momentum turns back down and can't resist the gravity of the trading top.  It is also looking to be topping in terms of our new indicator.



    RUT, Russell Small Cap Index.  Trading sell signal.



    TYO, Short 10-Year Bond ETF: shortsell signal.  This means we should expect another rally in the 10-Year Bond.



    TYX, 30-Year Treasury Yield.  Sell Signal.  Looks like it's had it run up -- and not a very positive rally, in fact.



    VIX, CRB Volatility Index.  Short-cover signal.  Is the VIX done sinking?  If it is, then stocks may begin coming down again.



    IEF, 7-10 Year TBond Fund: buy signal.  Not much of a sell-off.  Does this mean Ireland or Portugal is going to be found floating belly up down the Seine River in Paris?  Not certain.



    CGTS PORTFOLIO


    We haven't shown our CGTS Portfolio for some time.  This shows the 9-10 Trading Systems we are working with, and how they have performed since 6/19/10.  ST = Short-Term Trading Systems (3 such systems).  The other trading systems are more intermediate- and long-term.  We invest $10,000 per trade.  We will update this once a week.

     
    DAILY PORTFOLIO
     
     
    Active
    Active
    % Gain
    9/20/10
     
    Profit
    Trades
    Cost
    8.41%
    M4 SPIKE *
    ST
    $37,843
    45
    450000
    31.86%
    M53 vs Avg Dif
     
    $9,558
    3
    30000
    4.27%
    M2F ALT M4 2
    ST
    $2,134
    5
    50000
    2.70%
    M2F Diff Asp2+
     
    $2,974
    11
    110000
    0.21%
    M5 3 Avg Diff New
    ST
    $64
    3
    30000
    7.16%
    M53Avg Sim New2
     
    $7,155
    10
    100000
    5.18%
    M5 3 Avg +3
     
    $4,144
    8
    80000
    22.14%
    M4 Spike LT
     
    $11,070
    5
    50000
    8.49%
    M4 Spike LT 2
     
    $37,372
    44
    440000
    16.33%
    M5 3 Test LT
     
    $31,026
    19
    190000
    6.15%
    M5 3 ASP LT 2a
     
    $55,333
    90
    900000
    5.65%
    M53 Visual New2
     
    $4,518
    8
    80000
    7.97%
    M5/M5 What2?
     
    $37,467
    47
    470000
    40.21%
    M4 ASP REV TR *
     
    $16,085
    4
    40000
    2.22%
    CURRENCY
     
    $8,197
    37
    370000
     
    *subsumed into Spike
     
     
     
     
    7.53%
    Since 6/19/10
     
    $215,406
    286
    $2,860,000
     

    TODAY'S NEW TRADES

     
    We have new trades for today.  See some charts below.  TNP is giving a shortsell signal.  TNP is Tsakos Energy Navigation -- it has been a short trade since May 2009 and continues to be so.  LXRX is Lexicon Pharmaceutical -- and it is giving a buy signal in two of our trading system.


     
    9/21/10
     
     
     
     
    TUESDAY
    Close
    Long/Short
    Shares
    Trading Ssytem
    FXY
    116.29
    L
    86
    SPIKE
    YCS
    17.31
    S
    -578
    SPIKE
    PNC
    52.55
    L
    190
    M2 DIFF ASP2
    ELD
    51.54
    L
    194
    M2 DIFF ASP2
    CSUN
    4.33
    L
    2309
    M2 DIFF ASP2
    STD
    12.9
    L
    775
    M2 DIFF ASP2
    VLO
    17.15
    L
    583
    M2 DIFF ASP2
    FITB
    12.275
    L
    815
    M2 DIFF ASP2
    RBS
    15.18
    L
    659
    M2 DIFF ASP2
    MA
    216.99
    L
    46
    M2 DIFF ASP2 LT
    ELD
    51.54
    L
    194
    SPIKE LT
    ABX
    46.82
    L
    214
    M5 ASP LT 2
    IEF
    98.48
    L
    102
    M5 ASP LT 2
     
     
    ABX: American Barricks Gold.  M53 ASP ALT LT2a System.  Recently gave a sell signal.  But no selling came in.  Gold and TBonds are now giving buy signals.  Time for stocks holders to get cautious again.

     
    APOL, Apollo Group.  M2F ALT M4 2 Trading System.  Had a good rally back, after being eviscerated earlier in the year (falling from around 70 to around 38).  Time to take profits.  If this one can pull back from here but remain above its last low (38.39) then it might really be putting in a bottom.  Otherwise, it might sink out of sight.





    BRK-B, Berkshire Hathaway B Shares.  We're doing something the Wizard from Omaha would probably never do.  Take profits when you get them, especially in a Bear Market.



    CBPO, China Biologic.  M5 Visual New 2 Trading System.  Cover shortsale.  One of two 'cover' signals on Chinese stocks today.



    CHOP, China Gerui Adv Materials.  M5 ASP ALT TR2a Trading System: Cover Shortsale signal.


    FMCC.OB: Freddie Mac.  M5 3 vs Average Diff Trading System.  Cover Shortsale trading signal.



    FNMA.OB: Fannie Mae.  M5 3 vs Average Diff Trading System.  Cover Shortsale signal.



    FXY, Japanese Yen ETF Daily.  M4 Spike Trading System.  Buy Signal.  Spike is our favorite trading system.



    JPY/CNY, Japanese Yen vs. Chinese Yuan.  A slightly modified Spike Trading System (modified for currency-trading) is also giving a buy signal here.



    JNK, Barclay's High-Yield Bond ETF.  M2F Alt M4 2 Trading System.  Sell Signal.



    NXG, Northgate Minerals.  M5 3 Visual New 2 Trading System.  Take profits.  A 12% gain in two months -- but it won't be anything like what is coming for the precious metals sector.  Hold on until 2019 -- and you'll be shocked by some of the mining stocks' appreciation.

    M5 3 Visual New 2 is our attempt to quantify what we were seeing three weeks ago with so many stocks topping at the same time.  We thought it was a major market top.  Instead, it became a minor market top -- in a pretty tight trading range market.  But this trading system came out of it.



    RIMM, Research in Motion.  M5 3 ASP ALT LT2a Trading System.  Cover shortsale signal.  This is NOT at a bottom yet.  Don't buy it unless you want to flip it quickly.  This is a Bear Market pattern and needs to prove it has bottomed before you sink money into a losing prospect.  Just because a stock has gone done a lot doesn't mean it won't go down more.  Every investor learns this lesson; most of us learn it the hard way.



    TNK, Teekay Tankers, LTD.  M2F ALT M4 2 trading system.  Another shipping stock giving a sell signal.  Take your profits.  The chart pattern looks pretty good.  It certainly could go higher.  This system often gives sell signals a bit early.



    More information on the CGTS systems can be found at:

    http://home.mindspring.com/~mclark7/CGTS09.htm

     

    MICHAEL J CLARK
    Clark's Gate Timing System
    Hanoi, Vietnam

    84 4 221 92210



    Disclosure: NO POSITIONS TO DECLARE.
    Stocks: TNK, BBRY, AUQ, JNK, FXY, FNMA, FMCC, CHOP, CBPO, BRK.B, APOL, ABX
Back To Michael Clark's Instablog HomePage »

Instablogs are blogs which are instantly set up and networked within the Seeking Alpha community. Instablog posts are not selected, edited or screened by Seeking Alpha editors, in contrast to contributors' articles.

Comments (0)
Track new comments
Be the first to comment
Full index of posts »
Latest Followers

StockTalks

More »

Latest Comments


Posts by Themes
Instablogs are Seeking Alpha's free blogging platform customized for finance, with instant set up and exposure to millions of readers interested in the financial markets. Publish your own instablog in minutes.