We came into last week with an empty list thanks to inconclusive screens and chart patterns. That was probably a good thing, considering the sharp reversal on Thursday.
The raw daily data for last week as a whole tilted strongly to the sell side thanks to Thursday and Friday’s action. For the week ended Friday there were 63 charts with at least one buy signal and 195 with at least one sell signal. On Friday alone, there were 11 buys and 114 sells.
I screened just the lists of previous daily buys and sells for final signals on Thursday and Friday, looking for a progression of signals through the week. The final lists resulted in just one buy signal, a gold miner, and 14 charts with a sell signal on Thursday or Friday, following sell signals earlier in the week. I eyeballed these 15 charts for ones to add to the chart pick list for this week.
First I want to mention the one buy, XXXX (subscriber version. I loved the long term pattern, but the setup was not a low risk entry short term, so I did not add it to the list. I wanted to, but since this is a short term swing trading exercise, and this looked short term risky, despite its long term potential, I didn’t. Take that for what it’s worth. If you’re a gold bug, you’ll probably find it interesting.
Now, the short sale candidates… Surprisingly, there were few with great low risk setups. Of the 14 final sells, most had been in downtrends for at least several weeks, and were near major support. They could break down on this move, but I’d rather wait to short them on the next rebound. If this is the bear market that I think it is, there will be many better opportunities ahead to go short. And if it’s not the bear market that I think it will be, the list’s risk exposure will be limited to the two stocks I’ve selected, shown below. Charts below.
The table of new picks, as well as open and closed picks, last week along with charts of new and open picks are in the report (subscriber version only).
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.