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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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This Friday’s screens had just 7 buys and 42 sells. That compares with the previous Friday’s 8 buy signals and 48 sell signals. 1211 stocks met the initial screening criteria. 96% of stocks are either already moving in the direction of the most recent signal, whether up, down or sideways, mostly sideways. As was the case last week, there’s still no real sign of thrust in either direction.

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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.

Again 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.

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.

Healthcare was another theme that kept cropping up on the sell side.

Despite all the sell signals, I didn’t see many charts that looked like a setup for a big decline right here. I did find a couple that were interesting, however, and am taking a bite on xxx, xxx, and xxx (subscriber version only).

Maybe after the next bounce there will be more obvious shorts. I’ll put a toe in the water here, leaving the list balanced. I want to be patient until I see a clearer path to the downside before adding more shorts.

Last week was not a good week. Seven buy side picks got stopped out. Only two of them had gains. Including both those stopped out and those left open, the list had an average loss of 0.9% with an average holding period of 18 days. That wiped out the prior week’s 1.5% average gain on an average holding period of 12 calendar days.

The premature failure of buy signals is a sign that the market is probably reversing. It’s time to start looking for shorts more actively. We’ve been avoiding them until now.

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

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This Friday’s screens had just 8 buy signals and 48 sell signals. Despite all the sell signals, the charts were messy and uninteresting from a swing trade perspective either way. The market has had no thrust on the upside, and still none on the downside. 1268 stocks met the initial screening criteria. 96% of stocks are either already moving in the direction of the most recent signal, whether up, down or sideways, mostly sideways.

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The only thing really interesting in these signals was that ten of them were fixed income ETFs. They’re not movers and not really candidates for trades, but that sure stinks of bear you know what.

To put things in technical parlance, Friday’s charts were a “mishmosh.” Despite all the sell signals, I didn’t see anything that looked like a setup for a big decline right here. Maybe after the next bounce, but not now. I want to be patient until I see a clearer path to the downside. Right now, there’s no path either way.

Already open picks (list and current performance in subscriber version) had an average gain of 1.5% with an average holding period of 12 days. That’s down from the prior week’s 2.5% on an average holding period of 15 calendar days.

The picks that I added a couple of weeks ago have done fine. The ones last week… not so much. I’ve added stops to all of them. With no new picks this week, there are still 13 open picks. All are again longs. Charts below (subscriber version only).

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