For the week ended December 2, there were 44 charts with second or third buy signals as the week ended, and 45 sells. 2 of the sells were bearish ETFs. 1 of the buys was also a bearish ETF, resulting in net gain of one on the bear side, and a final score of 45 bullish and 44 bearish signals. That’s essentially a tie after two consecutive weeks of a bearish tilt in new signals. Non-subscribers click here for access.
The market overall is still riding the residual momentum of the 174 to 18 win for the buy side 3 weeks before. Often the results of such surges don’t begin to show up until the second week after the bulge in signals. Without any in-depth statistical analysis, my sense is that a signal surge like this has a shelf life of 3-4 weeks. Consequently, I think that time is up on this rally. But there has been no sell side surge in recent weeks, so the path of least resistance should still be on the buy side until we see triple digits on the sell side one day. Non-subscribers click here for access.
With the above in mind, in my visual review of the screen output this week I leaned toward giving the benefit of the doubt to the buy side. But most of the buys were trading at or just below major resistance. I took a shot on three that appeared primed to break out. Non-subscribers click here for access.
At the same time, I found 5 that I liked on the sell side, and added those as shorts. All or noted on the table below, with charts following, so that you can judge for yourself whether you agree with my take. Non-subscribers click here for access.
All previously open picks and those closed out last week are shown on the table below After adding the new picks, there will be 5 buys and 8 shorts. Non-subscribers click here for access.
For the week, performance went backward, with an average gain of 2.5% on an average holding period of 2 weeks.
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.