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Revising the Method, Better Picks

This week, I am starting a new screening mode which in theory should result in fewer false signals. In the interest of saving time, and generating fewer, but hopefully more reliable signals, I am dropping screens for cycle periods of shorter than 6 weeks. There were too many false signals, wasting too much of my time reviewing too many charts. Therefore, I have decided to focus on minimum cycle periods of 6 weeks and 10 weeks. I’m still requiring 2 signals during the week, including one on the last two days.  Non-subscribers click here for access.

Technical Trader subscribers click here to download the complete report.

Using the new method, there were 22 buy side charts to review, and 13 on the sell side. None of the sells were interesting. However, I liked 10 of the 22 charts on the buy side and am adding those to the list, as shown on the table below. Due to the late posting, I will begin tracking these as of the 2 PM print on Tuesday, September 5.  Non-subscribers click here for access.

One existing buy pick and five existing shorts hit stops last week. After these changes, and including the 10 new picks, there will be 21 longs and 1 short on the list this week. The short is likely to be stopped out, which would leave the list 100% long, and heavy. Not a comfortable look, but I have to go with what I see. These charts look good.  Non-subscribers click here for access.

The new picks will be added without stops. Picks added last week will remain without stops. I have adjusted stops on some of the older picks. I assume risk mitigation through diversification and small position sizes. However, because the list is virtually long only, this represents a high degree of market risk, given the principle of synchronicity.  Non-subscribers click here for access.

Last week was less successful than the prior week, with an average theoretical gain of 4% on an average holding period of 18 calendar days. That compared with 5.7% on an average holding period of 19 calendar days the previous week. The numbers assume all cash, no leverage, no margin, no options.  Non-subscribers click here for access.

Picks closed out in August had an average theoretical gain of 3.7% on an average theoretical holding period of 26 calendar days, just under 4 weeks. With the revised methodology, I’d like to see that stretched out a bit more.  Non-subscribers click here for access.

8/7/23 July had been difficult. After starting off with a string of losses on closed picks, the month ended at dead breakeven on the basis of a good last two weeks. Just 59% of the picks were winners, and the result was only a breakeven. I marvel at those options tout services who report 1000% gains month after month. But I wonder why they don’t own the world.  Non-subscribers click here for access.

7/10/23 June was solid, with 25 picks closed at an average theoretical gain of 9.7% on an average holding period of 36 calendar days.  Non-subscribers click here for access.

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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 report is meant as individual investment advice and you should not construe it as such. These picks are illustrative and theoretical.

The public facing report is not the complete report. Only subscribers have access to the full report and regular tracking of the theoretical picks and closeouts made in the reports.

Posted in 2 - Technical Trader
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