The final list of double screened output for last week resulted in just 4 charts with multiple buy signals, and only 20 with more than one sell signal. Considering that we start with a universe of over 10,000 issues, these numbers are minuscule. It tells us that the market is extended on the downside and due for a respite from the selling.
But there’s no sign of it yet, other than the market seeming to be virtually sold out. There are just too few stocks that have made the turn to power a meaningful rally. Non-subscribers click here for access.
Meanwhile, on Friday alone there were 23 buy signals and 4 sell signals. These are, again, small numbers. The tilt to the buy side suggests that xxxxxxxxxx xxx xxxxxxx xxxxxx xxxxxxxxx. Non-subscribers click here for access.
So as I prepared to eyeball the charts on the final lists of buys and sells, I was thinking, “Oh boy, those 4 buys must be something special.” I was chomping at the bit to get some longs on the list in preparation for a dead cat bounce, or more. Non-subscribers click here for access.
I looked at the charts and… meh. One was a well known air package delivery service that looked more like a short setup than a long. One was a biotech, which I avoid like the plague. One was a bakery that moves about a point a year. And one was a minor TV network and content provider. That chart looked good for maybe a 5% move. Not worth the risk here. Non-subscribers click here for access.
So that meant no buys. Then I looked at the 20 final sells. A couple of gold miners showed up, which was disheartening. I won’t short gold miners. I did find one chart that was interesting enough to add as a short. It was xxxx, with a limit price. As with last week’s short side picks, entry will be conditioned on trading at the limit price at some point during the week. Non-subscribers click here for access.
Last week I had 5 conditional short sale picks with sell limit entry prices. Two of them, xxx and xxx got hit, and I added those as shown on the table below. The other 3 never traded near their limit prices. Too bad. They would have been KA CHING, had I just done the usual market price at open. Non-subscribers click here for access.
Is there a lesson in that? Uh… No. If you’re looking for a curveball, and get a fastball instead, eh, that’s baseball. Credit to the pitcher. Non-subscribers click here for access.
The screen results come from a universe of approximately1200-1500 stocks daily that meet the criteria of trading above $6.00, and with average volume greater than a million shares per day. I start the weekly process by screening for daily buys and sells from the previous Friday through Thursday. I then rescreen that output, for additional signals in the progression on Thursday and Friday. Non-subscribers click here for access.
Last week, the list had an average gain of 16.4% with an average holding period of 10 calendar days. That worked out to an average gain of 11.2% per week. Normally that includes picks closed during the week, and those still open on Friday. Last week, there were no closeouts. Non-subscribers click here for access.
The percentage gain is based on 100% cash positions, with no margin and no use of leverage or options.
The record gain tells us to expect some giveback this week. I have adjusted trailing stops to protect profits. At the same time, I wanted to allow some wiggle room for dead cat bounces because these charts look destined for a lower low within a couple of weeks, if not immediately. Non-subscribers click here for access.
Picks closed out so far in June have averaged a gain of 7.1% on an average holding period of 22 calendar days. That works out to an average of 2.2% per week. Non-subscribers click here for access.
6/6/22 Picks closed out in May averaged a gain of 3% on an average holding period of 2 weeks. That worked out to an average of 1.5% per week. There were 28 closed picks. 25 were shorts. Non-subscribers click here for access.
5/9/22 April was a challenging month. The final tally of closed picks in April had an average loss of 0.4% with an average holding period of 11 calendar days. My system does not do well when the average low to low cycle duration drops below 4 weeks. Non-subscribers click here for access.
March was better. Picks closed in March had an average gain of 4% with an average holding period of 23 calendar days. Non-subscribers click here for access.
This week we start with 5 picks plus the 1 conditional pick. The 5 existing picks are, once again, all short. The 1 new pick is also a short, so the list is still 100% short. I would expect that to change imminently, but I’ll follow the signals and evaluate the charts without bias, to the extent possible. Non-subscribers click here for access.
I’ve added stop levels to existing picks, to protect profits and close out picks as they age. While the new pick has a limit entry price, it does not have a stop. I’ll add one next week if this pick is opened, based on hitting its limit price. Non-subscribers click here for access.
All active picks are shown on the table below. Charts of new and open picks are below that.
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. This is a developmental and experimental exercise, for the purpose of providing experienced chart traders with ideas and concepts to use or not use as they see fit.
Nothing in this letter is meant as individual investment advice and you should not construe it as such. These picks are illustrative and theoretical. The method behind these picks is experimental, and may change over time. I may trade my own account, and may buy, sell, sell short or cover short, or have positions in any of the stocks on the list at any time, based on a particular trading style that is unique to me. My entry and close out levels are likely to differ from those published due to the exigencies of my trading style and time constraints. I post these items in good faith for informational and educational purposes, and do not take positions in opposition to those which are published. All chart picks are actively traded stocks, and I assume that no subscriber to these reports, nor the total of all subscribers taking positions, would do so in a size that would influence the market price.
Performance tracking assumes 100% cash basis, no margin, no options. You should not assume that recent performance as reported can or will be repeated in the future. Trading involves risk of loss. In the case of options, the loss can be 100% of the amount invested. When leverage is used the loss can exceed the account equity under certain conditions.
The opinions expressed here assume that readers are experienced investors or are working with an investment advisor.