Category: 2 – Technical Trader

The final list of double screened output for last week resulted in just 4 charts with multiple buy signals, and only 20 with more than one sell signal. Considering that we start with a universe of over 10,000 issues, these numbers are minuscule. It tells us that the market is extended on the downside and due for a respite from the selling.

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But there’s no sign of it yet, other than the market seeming to be virtually sold out. There are just too few stocks that have made the turn to power a meaningful rally. Non-subscribers click here for access.

Meanwhile, on Friday alone there were 23 buy signals and 4 sell signals. These are, again, small numbers. The tilt to the buy side suggests that xxxxxxxxxx xxx xxxxxxx xxxxxx xxxxxxxxx. Non-subscribers click here for access.

So as I prepared to eyeball the charts on the final lists of buys and sells, I was thinking, “Oh boy, those 4 buys must be something special.” I was chomping at the bit to get some longs on the list in preparation for a dead cat bounce, or more. Non-subscribers click here for access.

I looked at the charts and… meh. One was a well known air package delivery service that looked more like a short setup than a long. One was a biotech, which I avoid like the plague. One was a bakery that moves about a point a year. And one was a minor TV network and content provider. That chart looked good for maybe a 5% move. Not worth the risk here. Non-subscribers click here for access.

So that meant no buys. Then I looked at the 20 final sells. A couple of gold miners showed up, which was disheartening. I won’t short gold miners. I did find one chart that was interesting enough to add as a short. It was xxxx, with a limit price. As with last week’s short side picks, entry will be conditioned on trading at the limit price at some point during the week. Non-subscribers click here for access.

Last week I had 5 conditional short sale picks with sell limit entry prices. Two of them, xxx and xxx got hit, and I added those as shown on the table below. The other 3 never traded near their limit prices. Too bad. They would have been KA CHING, had I just done the usual market price at open. Non-subscribers click here for access.

Is there a lesson in that? Uh… No. If you’re looking for a curveball, and get a fastball instead, eh, that’s baseball. Credit to the pitcher. 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.

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. Normally that includes picks closed during the week, and those still open on Friday. Last week, there were no closeouts. 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.

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. Non-subscribers click here for access.

Picks closed out so far in June have averaged a gain of 7.1% on an average holding period of 22 calendar days. That works out to an average of 2.2% per week. 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.

This week we start with 5 picks plus the 1 conditional pick. The 5 existing picks are, once again, all short. The 1 new pick is also a short, so the list is still 100% short. I would expect that to change imminently, but I’ll follow the signals and evaluate the charts without bias, to the extent possible. Non-subscribers click here for access.

I’ve added stop levels to existing picks, to protect profits and close out picks as they age. While the new pick has a limit entry price, it does not have a stop. I’ll add one next week if this pick is opened, based on hitting its limit price. Non-subscribers click here for access.

All active picks are shown on the table below. Charts of new and open picks are below that.

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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 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.

The final list of double screened output for last week resulted in 5 charts with multiple buy signals, and 118 with more than one sell signal. Of the 5 buys, 4 were inverse funds. Therefore the signals were actually bearish. And the final one was a precious metals ETF. Now, there’s a ringing endorsement for this market!

Meanwhile, on Friday alone there were just 5 buy signals, which, likewise, were all inverse ETFs and a gold ETF. There were 85 sell signals on Friday.

This is like the previous Friday, which also had an overwhelming preponderance of sell signals.

With 118 sells to choose from today, I found plenty of short sale candidates. The problem is that the market got way ahead of us this morning. So I whittled the list down from more than a dozen to just 5, and I will only start those if they hit a limit price equivalent their low price on Friday. Technical Trader subscribers click here to download the complete report.

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I would not want to follow the usual procedure of just adding them as of Monday’s opening price. Even though they would be likely to work out well over a few weeks, there’s a good chance that Monday’s open will be near the low of the day. An ensuing face ripping dead cat bounce would put these deep in the hole to start if entered on the open. So the entries will be conditioned on trading at those limit prices at some point during the week. Then I’ll adjust on the fly next Monday.

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.

Last week, the list had an average gain of 8.4% with an average holding period of 18 calendar days, including picks closed during the week, and those still open on Friday. That worked out to an average gain of 3.2% per week.

The percentage gain is based on 100% cash positions, with no margin and no use of leverage or options.

Five picks hit their stops last week. All were longs. The average gain on the picks that hit stops was 9.3%. Three picks remained open. All were shorts. I have adjusted stops on the open picks.

Picks closed out so far in June have averaged a gain of 7.1% on an average holding period of 22 calendar days. That works out to an average of 2.2% per week. 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.

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 3 picks plus the 5 conditional picks. The 3 existing picks are all short (tank-gawd). The 5 new picks are also shorts, of course.

I’ve added stop levels to existing picks, to protect profits and close out picks as they age. While the new picks have limit entry prices, they don’t have stops. I’ll add them next week to any that are opened based on hitting their limit prices.

All active picks and those closed last week are shown on the table below. Charts of new and open picks are below that.

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The final list of double screened output for last week resulted in 18 charts with multiple buy signals, and 57 with more than one sell signal. On Friday alone there were just 20 buy signals and 113 sell signals.

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Those two stats suggest a weak week. But as I pointed out in this week’s market update, the broad market indicators suggest that the up phase should still have a little life before it rolls over. With that context, I said that I’d be cautious about adding shorts.

With 57 sells to choose from, it was hard to resist picking short sales. There were a few that I liked. They’re probably a little early, but the risk reward potential over time seems good. So I chose 3 to add to the list as of Monday’s opening price, xx, xxx, and xxxx. Each would seem to have a bearish narrative as well. Not that that matters, but it enhances my comfort level with the choices.

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Not that that matters, either. 😁

Last week, the list had an average gain of 8% with an average holding period of 2½ weeks, including picks closed during the week, and those still open on Friday. That worked out to an average gain of 3.3% per week.

The percentage gain is based on 100% cash positions, with no margin and no use of leverage or options.

Last week’s overall performance was down from +11% with a similar holding period, in the previous week. We expected this.

5/31/22 We have to be careful though. We’ve seen previously that when the list has double digit gains, the stocks on the list have reversed sharply. So I continue to tighten stops to close out the pick at an opportune time and protect profits.

Three picks did hit their stops last week. All were longs. One had a nice gain, but it was canceled out by two losers. Five picks remain open. Four have gains. I have again adjusted stops on the open picks.

Meanwhile, picks closed out in May averaged a gain of 3% on an average holding period of 2 weeks. That works out to an average of 1.5% per week.  There were 28 closed picks. 25 were shorts. The 3 longs all came since May 16.

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 8 picks including the 3 new picks. The 5 older picks are all longs. The 3 new picks are shorts.

I’ve again adjusted stop levels to protect profits and close out picks as they age. The new picks don’t have stops. I’ll add them next week.

All active picks and those closed last week are shown on the table below. Charts of new and open picks are below that.

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Technical Trader subscribers click here to download the complete report.

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Last week, the list had an average gain of 11.2% with an average holding period of 2½ weeks. It was a very good week indeed. We have to be careful though. We’ve seen previously that when the list has double digit gains, the stocks on the list have reversed sharply. So I continue to tighten stops to close out the pick at an opportune time and protect profits.

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Technical Trader subscribers click here to download the complete report.

The percentage gain is based on 100% cash positions, with no margin and no use of leverage or options.

Last week, 4 picks hit those stops. 3 were shorts put on in early May. The gains on those were 1.1%, 23.3%, and 28.1%, with an average holding period of 3 day. One pick was a natural gas play that whipsawed and still looks good, so I put it back on the list.

The final list of double screened output for last week resulted in 24 charts with multiple buy signals, and 7 with more than one sell signal.

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.

I reviewed the charts from the final output visually. I didn’t see any worthy of adding to the list, on either the buy side, or the short-sale side. We’re in an in-between stage where nothing looks particularly interesting either way. So I’ll ride the ones what brung us as shown on the table below.

Picks closed out in May have so far averaged a gain of 3.4% on an average holding period of 2 weeks. There have been 25 closed picks. All 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 8 picks including the one rebuy. All 8 are longs. Six are direct energy plays.

I’ve adjusted stop levels to protect profits and close out picks as they age.

All active picks and those closed last week are shown on the table below. Charts of open picks are below that.

Technical Trader subscribers click here to download the complete report.

Non-subscribers click here for access.

Last week we started with 23 picks on the list. There were 6 longs and 17 shorts. I set one to be covered on Monday’s open. 13 others hit their stops during the week and were closed out. Including those and the picks still open at the end of the week gave us average gains of 3.6% with an average holding period of 13 days.

Closed picks closed out in May have so far averaged a gain of 1.4% on an average holding period of 13 calendar days.

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. Normally that doesn’t happen too often, but we must roll with the punches when it does.

March was better. Picks closed in March had an average gain of 4% with an average holding period of 23 days.

The percentage gain is based on 100% cash positions, with no margin and no use of leverage or options.

This week we start with 11 picks including the 2 new ones. 8 of the 11 picks are longs. Only 3 remain short. If the market crashes this week, I’m sorry, but we’ll miss it and hopefully the 8 longs being mostly energy and one precious metal, won’t be among the casualties.

I’ve added new stops to the picks from last week, and adjusted stops on the remainder. This week’s new picks will be added without stops as usual. I like to give them breathing room at the beginning, and manage risk by having multiple picks.

The new picks, along with picks that remain open, and those closed out last week, are shown on the table below. Charts of new and open picks are below that (subscriber report only).

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The final list of double screened output for last week resulted in a near tie. There were 28 charts with multiple buy signals, and 27 with more than one sell signal.

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.

I reviewed the charts from the final output visually. The charts were as equivocal as the numbers suggested. There were no screaming buys or sells, but I took flyers on XXXX and XXXX on the Buy side. I chose no shorts. Technical Trader subscribers click here to download the complete report.

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Last week we started with 23 picks on the list. There were 6 longs and 17 shorts. I set one to be covered on Monday’s open. 13 others hit their stops during the week and were closed out. Including those and the picks still open at the end of the week gave us average gains of 3.6% with an average holding period of 13 days.

Closed picks closed out in May have so far averaged a gain of 1.4% on an average holding period of 13 calendar days.

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. Normally that doesn’t happen too often, but we must roll with the punches when it does.

March was better. Picks closed in March had an average gain of 4% with an average holding period of 23 days.

The percentage gain is based on 100% cash positions, with no margin and no use of leverage or options.

This week we start with 11 picks including the 2 new ones. 8 of the 11 picks are longs. Only 3 remain short. If the market crashes this week, I’m sorry, but we’ll miss it and hopefully the 8 longs being mostly energy and one precious metal, won’t be among the casualties.

I’ve added new stops to the picks from last week, and adjusted stops on the remainder. This week’s new picks will be added without stops as usual. I like to give them breathing room at the beginning, and manage risk by having multiple picks.

The new picks, along with picks that remain open, and those closed out last week, are shown on the table below. Charts of new and open picks are below that.

Technical Trader subscribers click here to download the complete report.

Non-subscribers click here for access.

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