1/11 Watchlist

• Earnings plays:
• TROW bear phase flips; back to confirmed bull phase.
• Zombies:
• FNMA to bear phase, unconfirmed; fourth phase change since Dec. 20.

Below, earnings plays, other bull plays, bear plays, diversification plays and the futures file.

My holdings are marked with an asterisk (*). Signal dates are the first day of week in which the signal appeared. Slow trade holdings are listed separately, at the ending of this posting.

Earnings

	pps	pfe trend	pfe loc
AAPL*
CHRW
CRUS
CTSH
DECK
ENTR*
GOOG*
GRMN
INTC
LRCX
TROW
TSM
VAR

Key to earnings plays
(sorted by earnings date)

sym	roe	debt/ equity	div%	ex-div	earns
INTC	24.3%	0.05x	3.3%	feb3	jan13
TSM	30.7%	0.10x	3.6% ?	N/A	jan20
GOOG	20.6%	0.00x			jan21
AAPL	35.3%	0.00x			jan24
LRCX	30.9%	0.01x			jan24
TROW	21.8%	0.00x	1.7%	dec28	jan24
VAR	28.4%	0.03x			jan26
CRUS	33.6%	0.00x			jan28
CHRW	44.8%	0.00x	1.5%	dec16	jan31
ENTR	21.3%	0.00x			jan31
CTSH	23.1%	0.00x			feb7
DECK	27.8%	0.00x			feb23
GRMN	27.0%	0.00x	4.9%	apr13	feb23

"M" following the div% means that dividends are paid monthly, "A" means annual payments, and no letter means quarterly payments.


Other bull plays

	pps	pfe trend	pfe loc
AROW
CVX
GE*
MCO*
PAYX*
SO

Key to other bull plays

sym	roe	debt/ equity	div%	ex-div	earns
AROW	14.9%	0.58	3.6%	mar	jan17
CVX	17.4%	0.10	3.3%	feb	jan28
FTR	3.8%	1.55	8.0%	mar	feb21
GE	9.8%	4.28	12.0%	mar	jan21
MCO			1.5%	feb	feb4
NLY	8.2%	6.42	15.0%	dec	jan
PAYX	34.6%	0.00x	4.1%	jan	dec21
SO	13.5%	1.18	4.8%	jan	jan24

"M" following the div% means that dividends are paid monthly, "A" means annual payments, and no letter means quarterly payments.


Bear plays
None.

Diversification plays

	pps	pfe trend	pfe loc
EPI
EWZ
FXI
RSX
VWO

Key to diversification plays

sym	underlying
EPI	India
EWZ	Brazil
FXI	China
RSX	Russia
VWO	Global

Wounded birds

	pps	pfe trend	pfe loc
FTR
MVO*
NLY

Key to wounded birds

sym	roe	debt/ equity	div%	ex-div	earns
FTR	3.8%	1.55	8.0%	mar	feb21
MVO	81.6%	0.00	7.0%	jan
NLY	8.2%	6.42	15.0%	dec	jan

"M" following the div% means that dividends are paid monthly, "A" means annual payments, and no letter means quarterly payments.


Zombies

	pps	pfe trend	pfe loc
AOD*
FNMA*

Key to zombies

sym	roe	debt/ equity	div%	ex-div	earns
AOD	(fund)		11.3m%	dec22	n/a
FNMA					feb

"M" following the div% means that dividends are paid monthly, "A" means annual payments, and no letter means quarterly payments.


About the categories:

• Earnings plays: I think these are likely to rise sharply on a real or anticipated earnings surprise.
• Other bull plays: I think these are more likely to rise than fall; excludes earnings plays.
• Bear plays: I think these are more likely to fall than rise.
• Diversification plays: These don’t closely track the U.S. markets or are based on currencies other than the U.S. dollar.
• Zombies: These are failed leftovers from what seemed to be good ideas at the time. They stalk the Watchlist like zombies, tying up resources and frightening small children.

Abbreviations:

• pps - Person's Proprietary Signal.
• pfe trend - Trend of the polarized fractal efficiency line.
• pfe loc - Location of the polarized fractal efficiency line.

Key to the PPS/PFE tables

column	color	meaning
pps		bull phase
		bear phase
pfe trend		uptrend
		no trend
		downtrend
pfe loc		+100 and above
		+50 to below 100
		0 to below +50
		below 0 to above -50
		-50 to above -100
		below -100

PPS/PFE Analytical Tools

The analysis uses the daily Person's Proprietary Signal (pps), developed by John Person.

This is a black box signals -- the "proprietary" means that Mr. Person knows how it works under the hood, and I don't. But it has shown a fair degree of success in identifying good entry and exit points, and I find it useful.

For confirmation, the analysis uses an indicator called the polarized fractal efficiency (pfe) technical tool. It uses the fractal math of Benoit Mandelbrot to measure how efficiently move between levels. The higher the efficiency, the more directional the price trend.

The math for the pfe is public knowledge, but it is well above my math knowledge, and so to me is also a black-box signal.

This is a relatively new technical tool, based on fractal math. Investopedia has only a cursory explanation. Wikipedia is silent on the subject. ThinkOrSwim has a fuller explanation.

PPS/PFE Trading Rules

These rules are very preliminary. I’m still trying to figure out how the polarized fractal efficiency signal works.

When Person’s Proprietary Signal (pps) is in bull phase, enter when the polarized fractal efficiency (pfe) line crosses the zero line in an uptrend trend) A pps signal and pfe uptrend have less strength but greater upside potential when the pfe location (pfe loc) is below +50, and greater strength but less upside potential when the pfe location is at or above +50.

When the pps in in bear phase, enter when the pfe trend crosses the zero line in a downtrend. The set up has less strength but greater downside potential when the pfe loc is above -50, and greater strength but less downside potential when the pfe loc is at or below -50.

How should the pfe line be treated when it has flatlined at either end of its range, around +100 or -100. My preliminary observations are that the price by then has had a large run and tends to present a picture of exhaustion. However, by the description of the pfe, a high level should indicate a continued strong trend.

This is something that I’ll figure out as I go along.

Disclaimer

Tim Bovee, Private Trader tracks the analysis and trades of a private trader for his own accounts. Nothing in this blog constitutes a recommendation to buy or sell stocks, options or any other financial instrument. The only purpose of this blog is to provide education and entertainment.


No trader is ever 100 percent successful in his or her trades. Trading in the stock and option markets is risky and uncertain. Each trader must make trading decision decisions for his or her own account, and take responsibility for the consequences.