1/20 Watchlist: Whither Blue Chips?

Three days within a trading range (about 113.50 to 115 for SPY).
Three days of signals bear bull bear (using Person's Proprietary Signal).

What to make of the blue chip stocks? A major longer-term top or not? That is the question. . . .

SPY is now trading just below yesterday's open. However, the bear signal of this morning just disappeared, but could reappear. Not a vehicle I would trade at this point, but if I owned it near these levels, I wouldn't sell either. I'd wait and see how it plays out. Here's what's interesting among the high-volume . . . . . . exchange-traded funds:

• SLV, which tracks silver, at 17.60 shows a pps bear signal on a decline through support. The issue is in a downish trend since Dec. 3. It pricked but then pulled away from the next support level of 17.48. There's no corresponding signal on the gold etf, GLD.
  

. . . corporate shares:

• MSFT, QCOM, HPQ, discussed in yesterday's Watchlist, has pulled back from resistance.
• LOW shows a bear signal as it is on the verge of making a lower low, confirming a downtrend. The pattern starts at 24.50 on Dec. 22, hits a low of 22.74 on Jan. 5, a lower high of 23.64 on Jan. 7, and made a lower low of 22.71 today. It's a pretty weak downtrend, however. I mean, 3 cents below the last low could be random noise.

In today's scan there was the usual rich crop of issues showing a recent Person's Proprietary bull or bear signal that was followed days later by an explosive price move, and an even larger crop of signals where no such move happened.

I've been using the pps as a signal requiring confirmation of the trend and one that is strengthened if the macd, stochastic and others confirm it.

Another approach would be to simply open when the signal appears (early in the trading day, perhaps?), and then to close the position if no move happened within a few days.

An interesting study would be to determine, on average, how much lead time a signal gives before the explosive move happens. Clearly, such an strategy would require a tight stop/loss.





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Topics:
S&P 500, SPDR, Spiders, gold, precious metals, silver, Microsoft Qualcomm Hewlett-Packard Lowes