Category: 2 – Technical Trader

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The stock market is again at a fulcrum. It may or may not have one more rigid upright position left in its dying body. Don’t be surprised if it does. And don’t be fooled into thinking it’s a new upleg.

Third Rail Chart-  The S&P remains within uptrend channels. The most important support line runs from xxxx to xxxx (subscriber version)  this week. That would need to be broken to signal a downside reversal.

Cycles – The 10-12 month and 6 month cycles now appear to be in synchronized xxxx xxxx (subscriber version). But there’s still a yet to be negated 6 month cycle projection of xxxx. The 13 week cycle remains in an up phase for now, with a projection of xxxx. But short term cycles have entered down phases, with projections of xxxx to xxxx . If that is reached, would probably negate the 13 week cycle projection.

Liquidity is turning bearish, but it will be a gradual process that would allow for possible extension of the stock market rally consistent with the above projections.

Long Term Weekly- SPX would need to end a week conclusively below xxxx(subscriber version)to signal the likely start of a bigger top.

Long term cycle projections point to xxxx to xxxx (subscriber version) ideally due this year. 

Monthly Chart – S&P remains in a narrow uptrend channel with resistance at xxxx (subscriber version). Above that is room to run to xxxx this month.  It would need to end the month below xxxx to break the uptrend and open a chasm to the next support around 4000.

Cycle screening measures are at yet another inflection point. They need a solid xxxx xxx to turn the picture bearish, and a big up day to suggest a stronger bullish trend. Small moves would leave the status quo of a choppy uptrend in place.

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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. 

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In the long run, we’re all dead, and so is this bull market, whose end is ideally due this year. But in the short run, it still has room to run. We must give the uptrend the benefit of the doubt until there’s more hard evidence that a turn is under way.

Third Rail Chart- The S&P is trading near the center of a short term uptrend channel. The first support line rises from xxxx to xxxx (subscriber version) this week. A second line is just below that. The S&P would need to break both lines to have a shot at a downside reversal.

Cycles The 10-12 month and 6 month cycle tops are ideally due any time between now and xxxx  xxxxxx xxxx (subscriber version). Cycle projections now point to highs of xxxx to xxxx.

The 13 week cycle is in an up phase ideally due to top out xxxx to xxxx (subscriber version). The cycle projection is xxxx, which is an outlier at this point. The 13 week and 6 month cycle up phases would remain in force as long as the market stays above xxxx.

Short term cycles have projections of xxxx to xxxx (subscriber version), and are due to top out in January.

Cycle Screening data is at an inflection point. The current negative divergence between these indicators and the market averages doesn’t mean much yet. It only will if there’s downside follow through this week. Otherwise, the benefit of the doubt still goes to the bullish case. 

Liquidity is turning bearish, but it will be a gradual process that would allow for extension of the stock market rally consistent with the above projections.

Long Term Weekly SPX would need to end a week conclusively belowxxxx (subscriber version) to signal what could be the start of a bigger top.  

New long term cycle projections point to xxxx to xxxx (subscriber version) ideally due xxxx  this year.   

Monthly Chart – In the clear for a run to xxxx to xxxx (subscriber version) in January. It would need to end the month below xxxx (subscriber version) to break the uptrend.

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. 

Technical Trader subscribers click here to download the complete report.

This Friday’s screens had 24 buys and 72 sells. That compares with the previous Friday’s 15 buys and 9 sells.

I concluded last week that the small number of signals, particularly buy signals suggested that the rally was exhausted, despite the buys having the edge. I chose not to add any charts to the list, long or short, but held on to all of the shorts that had been on the list.

That looks to have been the correct judgement.  The list had 8 open picks, ending the week with an average gain of 5.8% on an average holding period of 22 calendar days, i.e. 3 weeks and a day. That’s the second best weekly performance of the last month and one of the best since I began this exercise a couple of years ago. It was up from +3.1% and 15 days the previous week.  This is cash basis, no leverage.

By contrast the S&P 500 lost 1.7% over the past 22 days and nearly 2% last week.  Maybe we should follow the old adage, quit while you’re a head, because you never know what might be a foot. Especially when it comes to the TA and the market. Sometimes the TA beats the market, and sometimes the market kicks your ass.

Which is why your trading strategy needs to include a mechanism to minimize losses, or what traders euphemistically call “drawdowns.” Mine is to avoid stops initially, but to minimize risk by spreading it across multiple picks, with the expectation that one or two will run big –  enough to offset the Biggest Loser. It’s not glamorous, but it works.

I then use trend support and resistance based picks to close out picks as they mature.

This week, 1465 stocks met the initial screening criteria. 6.6% of them rendered signals on Friday, which above the average 3 to 5%. 4.9% of the stocks that met the minimum criteria had sell signals. That is also a significant number, but indicates neither thrust, norm maximum momentum. So staying mostly short looks like the way to go this week, but as existing picks have aged a bit it’s time to tighten some of those stops and protect profits.

After reviewing the charts from the screen, I’m adding 5 of them to the list this week, all on the short side. That will bring the list to a full complement of 13 picks, only one of which is long.

I have updated the stops on some of the picks and added a stop to the one long pick. The rest of the stops remain in place. As usual, I’ll roll the dice on the new picks, give them a chance to breathe, and let them ride for at least this week.

The table and charts of open and new picks are below (subscriber version only).

Table (subscriber version only)

Charts (subscriber version only)

Technical Trader subscribers click here to download the complete report.

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. 

Subscription Plans

Technical Trader subscribers click here to download the complete report.

This Friday’s screens had 15 buys and 9 sells. That compares with the previous Friday’s 50 buys and 16 sells, a solid precursor to last week’s rally.

1439 stocks met the initial screening criteria in the current screen. Only 1.7% of them rendered signals on Friday, which is far below the normal 3-5%. Only 1% of the stocks that met the minimum criteria had buy signals. That could mean that the move is already exhausted.

I’m making no new additions to the list this week, either long or short. Last week, I added just one long. Everything else on the list was short, leading to a bad week.  Including picks that were stopped out, and those still open, the list ended the week with an average gain of just 3.1% on a 15 calendar day average holding period. That compared with the previous week’s average gain of +8.1% with an average holding period of 18 days.

The list will now have 8 open picks, of which just one is a long, and the rest are shorts. I’ve added stops to all of the shorts, in case they don’t roll over again.

The table and charts of open picks are below (subscriber version only).

Table (subscriber version only)

Charts (subscriber version only)

Technical Trader subscribers click here to download the complete report.

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. 

Subscription Plans

Technical Trader subscribers click here to download the complete report.

This Friday’s screens had 50 buys and 16 sells. This was a big reversal from the previous Friday’s 17 bullish and 145 bearish signals.  That was a big number that indicated downside thrust. The week before that was also lopsided on the sell side, a precursor to last week’s broad selloff.

The current number now suggests a reaction rally.

1380 stocks met the initial screening criteria in the current screen. 4.7% of them rendered signals on Friday, which is normal. 3.6% of the stocks that met the minimum criteria had buy signals. This isn’t enough to indicate a big broad based move, but there are 4 days to go this week where anything is possible.

Last week, I added 4 shorts to the list. I set one of the existing buys to be closed out last Monday. Two others hit stop prices and were closed out from the tracking list at the stop prices. These theoretical trades are shown on the table below (subscriber version only).

I was underwhelmed with the setups on the charts that rendered signals this week. I only found one buy and no shorts that I liked enough to put on the list, as shown on the table below (subscriber version only).

In total, this will bring the list to 12 open picks, of which all but the one new pick are shorts. I’ve added stops to 4 of those picks.

I continue to view stops, particularly trailing stops, mostly as a mechanism for closing out picks that I want to close out. I don’t like them for protection because they just as often get picked off on trades that turn into winners. So I’m willing to roll the dice on the rest this week. I’ll decide week to week whether to pull the plug, protect, or keep rolling.

As of Friday, the average gain of open picks and those closed last week was +8.1% with an average holding period of 18 days. This was a strong performance compared to recent weeks, especially so given the rotten market action. The list was on the right side of that. The previous week the list had an average gain of +2.2% with an average holding period of 20 days.

The table and charts of open picks are below (subscriber version only).

Table (subscriber version only)

Charts (subscriber version only)

Technical Trader subscribers click here to download the complete report.

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. 

Subscription Plans