As of the week ended Monday, September 26 closing prices, there was only 1 chart with second or third buy signals over the past two trading days, and 53 with second or third sell signals. That compares with 64 multiple sells at the end of the week before. For the week, the bears still had it, but that can turn on a dime. On Monday on a standalone basis there were 9 buys and 9 sells. Nothing to get excited about for either side.
The scoreboard for September so far, excluding the two picks still open (+10.5% avg.), shows an average gain of 3.4%, on an average holding period of 15 calendar days. All of the 16 picks closed out in September have been shorts. Of the 16 picks closed in August, 11 were buys and 5 were shorts. Non-subscribers click here for access.
After visually reviewing the charts of this week’s multiple buy and sell signals, I found the one buy signal uninteresting. Non-subscribers click here for access.
On the sell side, there were quite a few that appeared to have a little running room to the downside, but too little before reaching support. I skipped over those. Ultimately there were 4 that I liked enough to add to the list on the short side. They were xxxx, xxxx, xxxx, and xxxx. Do we notice a theme there? The charts are posted below. Non-subscribers click here for access.
With the 15% exposure that I theoretically committed on the existing picks, adding these 4 would bring me to a commitment of about 45% of my trading capital, with the other 55% in cash. Non-subscribers click here for access.
The two existing picks have gained an average of 10.5% on an average holding period of 8 calendar days as of today. Non-subscribers click here for access.
Would be nice to have had more shorts out, but with a schedule of only once a week, sometimes the swing trade turn gets missed, particularly when they happen on a V reversal. These are common at lows but rare at highs. Rare doesn’t mean never, however, and we got one two weeks ago. Non-subscribers click here for access.
But there’s something to be said for spending a few minutes a week on trading, rather than hours in front of a screen. Life must be lived! Non-subscribers click here for access.
For this week, I’m adding 4 picks on the short side as of Tuesday’s opening print. I have added trailing stops to the two existing picks to take them out automatically if the stops get hit. The 4 new picks will have no stops for the first week to give them some breathing room. Diversification will provide some cushion if one of them goes haywire against us. Non-subscribers click here for access.
The screen results come from a universe of approximately 1200-1500 stocks daily that meet the criteria of trading above $6.00, and with average volume greater than a million shares per day. I start the weekly process by screening for daily buys and sells from the previous Friday through Thursday. I then rescreen that output, for additional signals in the progression on Thursday and Friday.
The percentage gain is based on 100% cash positions, with no margin and no use of leverage or options.
9/5/22 16 picks were closed out in August. The average gain was 3.4% with an average holding period of 2 weeks. Since last November, when I last tweaked the screening and selection methodology, 108 picks were closed out with an average gain of 2.9% and an average holding period of 17 calendar days. Non-subscribers click here for access.
8/1/22 July had been a narrowly rangebound meatgrinder market until last week. Only two picks were closed out during the month for an average loss of 2.6%. Non-subscribers click here for access.
7/4/22 Picks closed out in June averaged a gain of 10.1% on an average holding period of 17 calendar days. That works out to an average of 4.1% per week. There were 12 closed picks. The win rate was 75%. I would hope to continue that, but it is by no means a given. Non-subscribers click here for access.
June’s performance is not something we should expect to duplicate too often, if at all. The average weekly gain since I tweaked the methodology in mid January is just 1.29%, while trending upward lately. Non-subscribers click here for access.
6/6/22 Picks closed out in May averaged a gain of 3% on an average holding period of 2 weeks. That worked out to an average of 1.5% per week. There were 28 closed picks. 25 were shorts. Non-subscribers click here for access.
5/9/22 April was a challenging month. The final tally of closed picks in April had an average loss of 0.4% with an average holding period of 11 calendar days. My system does not do well when the average low to low cycle duration drops below 4 weeks. Non-subscribers click here for access.
March was better. Picks closed in March had an average gain of 4% with an average holding period of 23 calendar days. Non-subscribers click here for access.
The strategy and tactics opinions expressed in this report illustrate one particular approach to trading. No representation is made that it is the best approach, or even suitable for any particular investor. This is a developmental and experimental exercise, for the purpose of providing experienced chart traders with ideas and concepts to use or not use as they see fit.
Nothing in this letter is meant as individual investment advice and you should not construe it as such. These picks are illustrative and theoretical. The method behind these picks is experimental, and may change over time. I may trade my own account, and may buy, sell, sell short or cover short, or have positions in any of the stocks on the list at any time, based on a particular trading style that is unique to me. My entry and close out levels are likely to differ from those published due to the exigencies of my trading style and time constraints. I post these items in good faith for informational and educational purposes, and do not take positions in opposition to those which are published. All chart picks are actively traded stocks, and I assume that no subscriber to these reports, nor the total of all subscribers taking positions, would do so in a size that would influence the market price.
Performance tracking assumes 100% cash basis, no margin, no options. You should not assume that recent performance as reported can or will be repeated in the future. Trading involves risk of loss. In the case of options, the loss can be 100% of the amount invested. When leverage is used the loss can exceed the account equity under certain conditions.
The opinions expressed here assume that readers are experienced investors or are working with an investment advisor.