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Category: 2 – Technical Trader

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Patience Pays Off With Swing Trade Chart Picks This Week

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This Friday’s screens had 24 buys and 25 sells. That compares with the previous Friday’s 25 buy signals and 17 sell signals. Friday’s strength in the market averages was neither broad, nor monolithic.

1273 stocks met the initial screening criteria in the current screen. 3.8% of them rendered signals on Friday. The rest were already moving in the direction of the most recent signal.

Current picks are summarized in the table below. 5 were still open, with an average gain of 1.3% on an average holding period of 17 calendar days. I’m closing out one loser, using the opening price Monday for tracking purposes.

I’m again mostly foregoing stops. My thought is that if one takes a hit, I’d look to exit subsequently. There are enough selections that risk is spread sufficiently so that I can give room for the ones that are going to run the right way, room to do so. That should offset losses on the ones that don’t go as expected.

After reviewing the charts, I chose 3 to add to the list this week. Surprisingly, only one was a buy. The other two were shorts. They’re shown on the table below (subscriber version only). All charts of the new picks and open picks are below. (subscriber version only)

Table

Charts

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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.

These picks are illustrative and theoretical. Nothing in this report is meant as individual investment advice and you should not construe it as such. Trade at your own risk. 

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Bullish Intermediate Term Omens

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Cycles The market confirmed the prior indications of xxxxxxx (subscriber version only) in cycles up to 13 weeks, as well as a probable 6 month cycle xxxx.

Initial short term cycle projections point to xxxx (subscriber version only), which would be a xxxx xxxx xxxx. There are no projections yet for cycles of 13 weeks to 6 months, and no indication yet of a 10-12 month cycle upturn. That will be signaled by what happens when the previous high of 4550 is tested.

On the third rail chart there now appears to be a flat intermediate channel. Support is at least week’s low of 4279. Resistance is indicated at the September high of 4546. A measured move indication coming out of this upside reversal points to xxxx-xxxx (subscriber version only).

On the weekly chart, updated long term cycle projections as of October 10, 2021 show targets ranging from xxxx to xxxx for cycles of up to 7 years (subscriber version only).

Long term momentum indicators suggest xxxxxxxx for xxxxx (subscriber version only). They normally form negative divergences long before price peaks.

On the monthly chart, the uptrend channel remains intact. SPX would need to end October below 4275 to break the uptrend channel. If the uptrend stays intact, the market could head for a very long term resistance trend at xxxx (subscriber version only).

The monthly long term cycle momentum indicator remains bullish.

Cycle screening measures have confirmed the uptrend and given an intermediate term xxxxx (subscriber version only) xxxx by xxxxxxx an 11 month trend of declining peaks.

Swing trade chart picks will be posted Monday morning.

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These reports are not investment advice. They are for informational purposes, intended for an audience of investment and trading professionals, and other experienced investors and traders. Chart pick performance changes week to week and past performance may not indicate future results, as you know. Trading involves risk, and these reports assume that you understand those risks and manage them according to your tolerance. 

Deadly Ambiguity With Big Profit Potential

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Rangebound markets tend to generate a lot of whipsaw signals that are just noise. I call rangebound markets “meat grinders” for a reason. They tend to crush systems designed to find 3-6 week swings. I try to avoid the worst of that, while allowing picks room to move around before breaking out in the expected direction.

What makes rangebound markets interesting is that when the market finally does break out, one way or the other, a big move tends to follow. Furthermore, the initial move out of the range tends to be explosive. To take advantage of that, it’s necessary to take positions in advance in charts that appear to have potential to do that, even though many won’t. The idea is that one or two big movers will more than compensate for the ones that bleed.

1357 stocks met the initial screening criteria in the current screen. 3.1% of them rendered signals on Friday. The rest were already moving in the direction of the most recent signal. There were 25 buys and 17 sells. That compares with the previous Friday’s 56 buy signals and 7 sell signals. This marks 2 straight weeks with more buys than sells after a string of four Fridays with a majority of sell signals.

All charts have a measure of ambiguity, especially in these rangebound environments. This week’s degree of ambiguity seemed even greater than usual. As I reviewed the 52 charts with signals, I saw a lot of “on the one hand – on the other hand.” I ended up choosing none of them. I’ll stand pat with what we currently have on the list.

Current picks are summarized in the table below (subscriber version only). I’m foregoing stops this week to give room for something to happen one way or another. My thought is that if one takes a hit, I’d look to exit on the recoil. But I want to give room for the ones that are going to run the right way, room to do so.

Table (subscriber version only)

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.

These picks are illustrative and theoretical. Nothing in this report is meant as individual investment advice and you should not construe it as such. Trade at your own risk. 

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Head and Shoulders Above

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Cycles up to 13 weeks appear to have turned up. The 6 month cycle also should be turning but indicators are less clear. With cycles of up to 13 weeks turning up, there’s room to move to xxxx xxxx xxxx xxxx xxxx (subscriber version only). If the 6 month cycle is also turning as seems likely, then the market should break out xxxx xxxx xxxx xxxx, with a target of xxxx (subscriber version only). The likely time frame would be Q1 2022. However, a stall and rollover at either xxxx or xxxx could lead to a downside resolution. Given the longer term structures, I’m leaning toward xxxx xxxxx xxxx , but have antenna up for any sign of change.

On the third rail chart the market has set up a beautiful head and shoulders top pattern, which may now be forming a second right shoulder. Or it could break the pattern right here. The pattern is perfectly symmetrical in price and time. What does that mean (subscriber version only)?

On the weekly chart, updated long term cycle projections as of October 10, 2021 show targets ranging from xxxx to xxxx for cycles of up to 7 years (subscriber version only).

Long term momentum indicators suggest xxxx xxxx xxxx (subscriber version only). They normally form negative divergences long before price peaks.

On the monthly chart, the S&P 500 the uptrend channel remains intact. SPX would need to end October below xxxx to break the uptrend channel. If the uptrend stays intact, the market could head for a very long term resistance trend at xxxx (subscriber version only).

The monthly long term cycle momentum indicator remains bullish.

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Not a subscriber? Get price and time targets, and weekly swing trade chart picks, risk free for 90 days!  

These reports are not investment advice. They are for informational purposes, intended for an audience of investment and trading professionals, and other experienced investors and traders. Chart pick performance changes week to week and past performance may not indicate future results, as you know. Trading involves risk, and these reports assume that you understand those risks and manage them according to your tolerance. 

Avoid the Meat Grinder, Pick Only Wieners

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This Friday’s screens had 56 buys and 7 sells. That compares with the previous Friday’s 16 buy signals and 28 sell signals. This breaks a string of four straight weeks with a majority of sell signals in Friday screens.

1376 stocks met the initial screening criteria. 4.6% of them rendered signals on Friday. The rest were already moving in the direction of the most recent signal. Likewise, rangebound markets tend to generate a lot of whipsaw signals that are just noise. It’s important to look for and try to avoid that when choosing potential swing trades.

With that in mind, I chose 4 charts to add to the list. They are xxx, xxx, xxx, and xxx (subscriber version only). I’ll track those as of Monday’s opening prices.

Last week reversed a string of 4 straight losing weeks, with an average gain of 2% on an average holding period of 18 calendar days.

Rangebound markets generate lots of whipsaw signals, which are rough on a system designed to ferret out 3-4 week swings. I’ve called them meat grinder markets. I put out a lot of hamburger in September. I’m working on avoiding that while keeping toes in the water to catch the next wave.

Overall performance is summarized in the table below (subscriber version only) .

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.

These picks are illustrative and theoretical. Nothing in this report is meant as individual investment advice and you should not construe it as such. Trade at your own risk. 

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Mixed Bag May Hold October Bear Treats

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The cycle indications are a mixed bag this week. The market should be coming off a test of a 13 week and 6-8 week cycle low, but indicators xxx xxxxxxx (subscriber version only). There are still a couple of cycle projections that suggest the possibility of slightly lower lows around xxxx-xx (subscriber version only). A xxxx xxxxxxx in the market averages would be necessary this week to confirm an upturn in those cycles. Otherwise, the flat down phases in 6 month and 10-12 month cycles could turn from ho hum to nasty absolute downturns.

On the third rail chart we see a completed head and shoulders top pattern that measures to 4200. Friday’s rebound came back to a broken trendline, which is a normal return to the scene of the crime after a breakdown. If the market clears xxxx (subscriber version only), however, it would be short term bullish.

On the weekly chart, the long term uptrend is bending, but it remains unbroken. The xxxxx (subscriber version only) area is now a critical fulcrum. If it creates space to the upside, then the market could trundle up along the next trendline, or accelerate if it breaks through. That line rises from about xxxx to xxxx in October. The SPX would need to break xxxx to signal an intermediate downtrend.

Long term momentum indicators suggest higher for longer. They normally form negative divergences long before price peaks. We’re on the lookout for that.

On the monthly chart, the S&P 500 started a new monthly bar. The uptrend channel remains intact. SPX would need to end October below 4xxx (subscriber version only) to break the uptrend channel. If that happened, the target would be 3900-4000. If the uptrend stays intact, the market could head for a very long term resistance trend at xxxx.

The monthly long term cycle momentum indicator remains bullish.

Cycle screening measures are weaker than the market averages and are not in position to render strong bullish signals this week. Both the intermediate term and longer term trends in this indicator are weak, suggesting more stocks are struggling than the market averages are showing.

Technical Trader subscribers click here to download the complete report.

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Not a subscriber? Get price and time targets, and weekly swing trade chart picks, risk free for 90 days!  

These reports are not investment advice. They are for informational purposes, intended for an audience of investment and trading professionals, and other experienced investors and traders. Chart pick performance changes week to week and past performance may not indicate future results, as you know. Trading involves risk, and these reports assume that you understand those risks and manage them according to your tolerance. 

Rangebound Noisy Signals from Swing Trade Screen

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This Friday’s screens had 16 buys and 28 sells. That compares with the previous Friday’s 25 buy signals and 298 sell signals. This is the fourth straight week with a majority of sell signals. Yet somehow, the market averages continue to show bounce, while not making much progress.

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.

These picks are illustrative and theoretical. Nothing in this report is meant as individual investment advice and you should not construe it as such. Trade at your own risk. 

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The Ugh Market

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That’s right. Ugh.

Mixed cycles now suggest development of a trading range that could last xxxx xxxx (subscriber version only).

Short term cycles have turned up. The 13 week cycle has probably also bottomed, although indicators are lagging. The only projection is xxxx, for the 4 week cycle (subscriber version only).

The 6 month and 10-12 month cycles still appear to be in flat down phases. They suggest rangebound trading ahead for xxxx xxxx xxxx (subscriber version only).

On the third rail chart if the S&P clears xxxx , it should fly right back to xxxx. If xxxx holds, then they’ll probably pull back to test the xxxxx area, or even xxxx, before rebounding again (subscriber version only).

On the weekly chart, the long term uptrend is bending, but it remains unbroken. The xxxx area is now a critical fulcrum. If it creates space to the upside, then the market could trundle up along the next trendline, or accelerate if it breaks through. That line rises from about xxxx to xxxx in October. The SPX would need to break xxxx to signal an intermediate downtrend (subscriber version only)..

Long term momentum indicators suggest higher for longer. They normally form negative divergences long before price peaks.

The long term cycle projections of xxxx to xxxx are still viable, with highs due between now and next year(subscriber version only)..

On the monthly chart, the S&P 500 ended August at or above long term trend resistance around xxxx. This suggested more upside. It needs to break xxxx in September to signal an end to the uptrend (subscriber version only)..

The long term cycle momentum indicator remains bullish.

Cycle screening measures rebounded and are in position to render an intermediate term bullish signal if the rally continues this week. However, a stall would reinforce a neutral to bearish intermediate trend outlook in these indicators.

(subscriber version only).

(subscriber version only).

Technical Trader subscribers click here to download the complete report.

Subscription Plans

Not a subscriber? Get price and time targets, and weekly swing trade chart picks, risk free for 90 days!  

These reports are not investment advice. They are for informational purposes, intended for an audience of investment and trading professionals, and other experienced investors and traders. Chart pick performance changes week to week and past performance may not indicate future results, as you know. Trading involves risk, and these reports assume that you understand those risks and manage them according to your tolerance. 

Sell Signals Again Have The Edge From Friday’s Swing Trade Screen

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This Friday’s screens had 25 buys and 29 sells (including one buy on an inverse ETF). That compares with the previous Friday’s 7 buy signals and 42 sell signals. This is the third straight week with a majority of sell signals. 1344 stocks met the initial screening criteria. Only 4% of them rendered signals on Friday. The rest were already moving in the direction of the most recent signal.

We’ve had plenty of advance warnings for the current weakness.

9/13/21 But there are hints of a downturn that suggest that it’s finally time to actively consider adding shorts to the list, something that I’ve assiduously avoided for the past 18 months.

9/13/21Again this week, one of the interesting things in these signals was that 9 of them were bearish signals on fixed income ETFs. Last week it was ten. They’re not movers and not really candidates for trades, but it squares with our liquidity analysis that the bond market will be a bad place to be from here on.  

9/13/21 Likewise there were numerous sell signals on REITs. That’s another bearish sign for not just the group, but for fixed income and the stock market. I don’t like to trade REITs. They tend not to trend, but to jump around like rangebound Mexican jumping beans. But the bearish indications are beginning to coalesce into a theme that fits our outlook.

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Last week I put a toe in the bearish waters with 3 shorts. I wanted to wait for a bounce to add more. The market may not be so kind as to accommodate that. When is it ever?

Meanwhile, 3 buy side picks are hanging on. I’ve adjusted the stop levels on those.

In addition, I’m adding two shorts to the list this week, XXX, and XXX, (subscriber version only) as of the 3 PM price on Monday.  Delayed entry time may or may not be a tactical winner, but with Monday morning’s broad market weakness, a mid-day bounce could give a better entry price. It’s a crapshoot, which, as always, is up to your judgment if you are watching and trading these picks.

Last week was another losing week. I did not have enough shorts, with only 3 short picks to start on Monday, and one went the wrong way.  Three more buy side picks got stopped out after 7 were stopped the week before.

Including both those stopped out and those left open, the list had an average loss of 1.1% with an average holding period of 16 days. That was slightly worse than the prior week’s loss of 0.9% with an average 18 day hold. Several weeks of small gains have been wiped out in this transitional period. I need to do better.

Charts and table of existing picks below (subscriber version only).

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.

These picks are illustrative and theoretical. Nothing in this report is meant as individual investment advice and you should not construe it as such. Trade at your own risk. 

Technical Trader subscribers click here to download the complete report. 

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Stock Market on the Brink

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Cycle structures and conventional technical indicators are now on the cusp of intermediate term signals. The setups suggest that if those signals are forthcoming this week, they’ll be valid. This report illustrates what would be required to trigger those signals (subscriber version only).

All cycles are now in gear to the downside. Short term cycle projections have been reached, but a 13 week cycle projection points to xxxx (subscriber version only).  A weak bounce this week, or no bounce, would suggest that that target is still in play.

Multiple cycle channel support lines are clustered around xxxx (subscriber version only). That’s a likely place for an intermediate low to develop after one more tests or minor penetration, in the next 1-4 weeks.

On the third rail chart there’s a bit of air below xxxx (subscriber version only).  That next support line will be at xxxx on Monday, rising by 2.75 points per day (PPD) to around xxxx on Friday. However, if the market rebounds on Monday, it would be back within the uptrend channel that has continued the move since May. That line rises from xxxx to around xxxx this week.

On the weekly chart, the market is resting on the previously broken long term uptrend line at xxxx (subscriber version only). If the week ends below that, then a test of the support region around xxxx would become likely over the next month. If those break, it would suggest major top formation. Conversely, if either the current trendline, or the cluster below, holds, then the uptrend would still be intact.

The long term cycle projections of xxxx to xxxx (subscriber version only) are still viable, for the time being, with highs due between now and next year. That outlook could change this week.

On the monthly chart, the S&P 500 needs to break xxxx (subscriber version only) in September to signal an end to the uptrend.

The long term cycle momentum indicator remains bullish. For now.

Cycle screening measures broke the intermediate term bullish trend, setting it back to neutral. But the aggregate measure hit a line that suggests a short term bottom. If it breaks, then the bigger picture turns bearish.

Technical Trader subscribers click here to download the complete report.

Subscription Plans

Not a subscriber? Get price and time targets, and weekly swing trade chart picks, risk free for 90 days!  

These reports are not investment advice. They are for informational purposes, intended for an audience of investment and trading professionals, and other experienced investors and traders. Chart pick performance changes week to week and past performance may not indicate future results, as you know. Trading involves risk, and these reports assume that you understand those risks and manage them according to your tolerance. 

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