If you believe in signs, miracles, portents, and quantum mechanics, then stock charts and trading screens are for you! Allow me to explain.
In our search for stocks to add to our swing trade chart picks list, the final list of double screened output for last week resulted in 92 charts with multiple buy signals, and only 5 with more than one sell signal. 3 of the 5 were gold ETFs. Non-subscribers click here for access.
Meanwhile, on Friday alone there were 81 buy signals and 0 sell signals. That’s right. Zero sells. So from a bearish perspective there’s nothing to hang our hats on. After last week’s pump, there’s no hope for dump. Non-subscribers click here for access.
As I prepared to eyeball the charts on the final lists of buys and sells, I was thinking that it’s too late to buy, but I tried to keep an open mind. As I went through the charts, I kept seeing the same thing. They all looked as though they had maybe another day or two of upside before hitting a wall of resistance. So I said, “No thanks.”
But then I saw one that I thought, “Here’s one I can hold and hope.” The symbol was xxxx. It was a sign. I put it on the list. Scientific method, right? 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.
6/20/22 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.
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.
The percentage gain is based on 100% cash positions, with no margin and no use of leverage or options. Non-subscribers click here for access.
Last week, the list had an average gain of 14.9% with an average holding period of 12 calendar days. That worked out to an average gain of 8.6% per week. That includes picks closed during the week, and those still open on Friday. Non-subscribers click here for access.
There was the expected giveback from the week before, but in the end, still a near record performance. That was great, especially considering that everything was short. But because there were signs that the market was sold out the week before, I had tightened the trailing stops. As a result, all 5 of the older picks got stopped out with profits. Non-subscribers click here for access.
The one new pick, xxxx, was a short. Call it luck, or a good job by the screens and my eyes, but it bucked the rally and sold off hard, giving the list a nice boost. As usual, I put it on the list without a stop, but I’m adding one this week to protect the profit, but still allow room for additional price decline. Non-subscribers click here for access.
Picks closed out so far in June have averaged a gain of 10% on an average holding period of 22 calendar days. That works out to an average of 3.8% per week. That’s not something we should expect to duplicate too often, if at all. The average weekly gain since I tweaked the methodology in mid January is just 1.25%, but trending upward. 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.
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.
March was better. Picks closed in March had an average gain of 4% with an average holding period of 23 calendar days.
This week we start with 1 open pick and one new pick. The open pick is a short with the symbol xxxx. The new pick is a buy with the symbol xxxx. Hey. I gotta do what I gotta do. Non-subscribers click here for access.
I’ve added a stop to xxxx, to protect the profit in case they do, but also allow room for more downside if they don’t. I have added xxxx without a stop in the first week, as usual, because you gotta hold on to xxxx, at least on the first week. Non-subscribers click here for access.
I’m sorry. I had no choice about that. Because I already had xxxx, I considered adding LIFE, but it was premature. Non-subscribers click here for access.
OK, I’m really sorry this time. I won’t do it again. I promise.
All active picks and those closed out last week 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.