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In the initial runs covering nearly 2000 stocks that meet institutional price and volume standards, I run two broad screens, one each for bearish and bullish longer-term setups.
Over several weeks, a setup that I call sleeping dogs has been increasing in number while another group that I call resting big gainers remained static. Each group encompassed about 7-8% of the total universe of the stocks that met the institutional minimums. About 3 weeks ago sleeping dogs caught up with and surpassed resting big gainers. While triggered sell signals remained few, a cancer was spreading beneath the surface of the big cap market averages.
On Friday, the cancer suddenly metastasized. Many chart patterns that had been rangebound, sleeping, suddenly broke down. Even bullish setups broke late in the day, causing many former winners to get hit hard.
The bullish fever broke on Friday, and today’s list of new additions to the list shows the effect. However, Friday’s break was driven by a statement made by President Trump.
Performance Recap
Picks closed since September 9, or open as of the October 10 close, showed an average gain of 8.5%, which is a drop from the 11.6% gain the previous week. This compares with a gain of 0.5% in the S&P 500 since September 9. The average holding period was 32 calendar days. Table below.
Table of picks and charts in subscriber report.