We had them, but unfortunately, also had a few shorts that ate up much of what would have been phenomenal profits last week.
Looking at the final list of double screened output for last week there were 31 charts with multiple buy signals versus 54 the week before. 3 of those were inverse funds, which means that there were only 28 bullish signals. Non-subscribers click here for access.
There were 29 charts with a second or third sell signal on the week, versus 14 the week before. Adding the 3 buy signals on the bearish ETFs makes 32 bearish signals. The fact that there were more bearish than bullish short term signals is surprising, if not shocking. Non-subscribers click here for access.
These numbers remain quite small relative to the universe of more than 10,000 screened stocks. The rally did not have a broad based thrust. Non-subscribers click here for access.
Looking at Friday on a standalone basis there were 33 buy signals and 52 sell signals. Obviously, a bearish tilt. How is that possible with such a big move in the averages? Monday will be interesting. Non-subscribers click here for access.
I undertook the usual visual review of the charts that met the multiple signal criteria. I did not expect to find many buys because the market has already moved for two weeks. I did find one that looked interesting, XXX. To buy XXX or not to buy XXX. That is the question. Non-subscribers click here for access.
I wasn’t finding much that I liked on the short side until I got toward the end of the alphabet. I had just seen a headline in the Wall Street Journal about how great luxury brands were doing, so when XXX showed up in the sell side selections, I gladly added it to the list. I also added XXX, and XXX. 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.
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.
7/4/22 Picks closed out in June averaged a gain of 10.1% on an average holding period of 17 calendar days. That works out to an average of 4.1% per week. There were 12 closed picks. The win rate was 75%. I would hope to continue that, but it is by no means a given. Non-subscribers click here for access.
June’s performance is 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 1.29%, while trending upward lately. 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.
July had been a narrowly rangebound meatgrinder market until last week. Only two picks were closed out during the month for an average loss of 2.6%. But the 7 picks that were still open at the end of the month had an average gain of 3.7% on an average holding period of 11 calendar days. The month should have been better, but I had those shorts last week, and they hurt us. Non-subscribers click here for access.
We had no stop-outs last week. This week we start with those 7 open picks, of which 4 are buys and 3 are shorts. I have added or adjusted stops on all existing picks. Non-subscribers click here for access.
I will add 1 buy and 3 shorts to the list. The picks are shown on the table below (See report). Charts are below that. Non-subscribers click here for access.
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.