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Second, Even Bigger, Explosion of Sell Signals in Swing Trade Screens

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This Friday’s screens had  26 buys and 136 sells. 9 of the buys were inverse ETFs, meaning that only 17 of the signals were bullish and 145 were bearish. This is a big number that indicates downside thrust, but it can also mean that it’s time for a minor bounce first.

This week’s numbers compare with 19  buys and 53 sells which was a pretty good indication that last week would be bearish. 11/22/21 51 sells is still a big enough number on the sell side to make me sit up and pay attention. I was overconfident on the long side, and overstayed several of the longs on the pick list without trailing stops. I’ve instituted them, and a few outright sells this week.

Only 1246 stocks, about 100 less than usual, met the initial screening criteria in the current screen thanks to the semi holiday shortened session. But a whopping 13% of them rendered signals on Friday, which is more than triple the norm. Last week there were 4% sell signals. 11/22/21 That’s a more than a typical percentage of new signals on a given day. So it’s time to look for a possible rollover and more shorts to add to the list.

Last week, I added 6 shorts to the list and put stops or sells on most of the longs. 8 of them were closed out as a result. I have added a sell condition to one pick and have stops on 3 others.

On this week’s list of sell signals, most had dropped to or near support. As a general rule I would not short a chart where price was at or near support. This might be the rare time that they crash through, but I must go with percentages. Despite the 145 bearish signals I only found 4 charts that were weak enough but far enough above support to add to the list as shorts this week. They’re shown on the table below.

In total, this will bring the list to 13 open picks, of which 2 will be longs, and 11 will be shorts. That’s up from 6 shorts last week. I don’t remember ever having as many shorts since starting this swing trade chart picks a couple years ago.

As of Friday, the average gain of open picks and those closed last week was +2.2% with an average holding period of 20 days. That’s not bad considering the S&P tanked last week. As long as we have a  plus sign when the broad market is down, it has the smell of victory.

However, it compares with an average gain of + 3.6% with an average holding period of 27 calendar days. And that was a drop from an average gain of 8.5% on an average holding period of 25 calendar days 3 weeks ago. I previously allowed the list to age too much without installing trailing stops. Then last week, while I was Jack be nimble, I was not quite nimble enough.

The table and charts of open picks are below. I have stops in place on aged picks, but I’m leaving fate to the wind on the picks from last week, and this week’s new picks. Have to give them time to breathe. I will add stops as they age.

The table and charts of open picks are below (subscriber version only).

Table (subscriber version only)

Charts (subscriber version only)

Technical Trader subscribers click here to download the complete report.

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.

These picks are illustrative and theoretical. Nothing in this report is meant as individual investment advice and you should not construe it as such. Trade at your own risk. 

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