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The screening algorithms produced another week of solid performance last week. But that was yesterday. Our focus now turns to the week ahead, to preserve and grow gains, and reduce the number of losing trades. The methodology is turning up a good number of winners, but still too many losers, and I have been remiss in adding too many iffy setups to the list. The screens are doing their job. The screener needs to do better.
During the week ended Friday, October 31, out of 1899 stocks meeting institutional price and volume criteria, the screens produced the following results :
Setups:
First, recapping the cumulative lists of longer-term setups, there were:
198 resting big gainers up from 186 last week, and
224 sleeping dogs, up from 207.
I also look for breakout and breakdown stocks from the last 6 months. The buy side outnumbered the sells, 127 to 100.
Then I run weekly screens based on cycle positions.
370 met major or intermediate trend buy setup criteria (down from 543 the previous week).
248 met major or intermediate trend sell setup criteria, up from 175 the previous week.
Tactics
For actionable trades, I visually review charts that triggered short term signals in the second half of the week from the prescreened candidates. New picks are shown on the table below and their charts follow.
I also review the existing issues on the list for whether to close, hold, or add or adjust stops. Here are the results of my final review for this week.
Trade Selections and Adjustments
- 6 new picks, of which, 3 buys and 3 shorts
- 1 short pick stopped out and 2 shorts covered as planned, 3 closeouts at Monday’s open
- 11 prior picks will remain open this week, 4 shorts, and 7 buys
- 3 picks with stops (one trailing). The rest will ride without
Performance Recap
Picks closed in October showed an average gain of 3.4% on an average holding period of 4 weeks. Currently open picks have an average gain of 10.3% on an average holding period of 17 calendar days. This compares with a gain of 2.5% in the S&P 500 since September 30.
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