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Cycle based screening methodology struggles with rangebound markets where wave frequencies go hyper, amplitudes are large, and/or the market is whipped around by news. The idea is to survive those periods, and then be well positioned for the next sustained trend. We’re in survival mode now. The list has been mostly minimally positive during this rangebound period, but the meatgrinder effect finally appeared last week. The market chewed us up and spit us out.
The list currently has an average loss of -0.6% on an average holding period of 17 calendar days, including open picks and those closed out last week. That’s a sharp deterioration from a 3% average gain the week before.
During the week ended Friday, February 27, out of 1899 stocks meeting institutional price and volume criteria, the screens produced the following results:
Cumulative lists of longer-term setups:
- 371 resting big gainers, up from 5 last week
- 415 sleeping dogs, up from 393 last week.
- 156 breakout charts last 9 months- unchanged from 156 last week
- 120 breakdown charts last 9 months – up from 119
Weekly screens of cycle positions.
- 97 met strict major or intermediate trend buy setup criteria, up from 57. Of all bullish longer-term setups, 31 charts triggered short term buy signals, down from 122 the prior week.
- 66 met strict major or intermediate trend sell setup criteria, up from 41. Of all bearish longer-term setups, 19 charts triggered short term sell signals, down from 32 the prior week.
Tactics
For actionable trades, I visually review charts that triggered short term signals from the prescreened structural candidates. 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
- 2 new picks, including no buys and two shorts. See table below.
- 6 existing picks were closed last week. I have set 9 to be closed as of the opening price Monday (see table below).
- 3 earlier picks will remain open, 2 buys (energy), and one short.
Current Performance
Picks closed in February had an average gain of 2.6% on an average holding period of 18 calendar days. Picks currently open have an average loss of 5.8% and an average holding period of 14 calendar days.
Table in subscriber report. Non subscribers, click here for access.