Monday, December 10, 2012

Waiting for Godot, I mean, a trend

I have five breakouts, all to the upside, among the 300 or so stocks and exchange-traded funds that I follow, but not one has a trend score worth playing.

The stocks are Teradyne Inc. (TER) and 3M Co. (MMM). The ETFs are the SPDR S&P Mid-cap 400 (MDY), the Amex SPDR Health Care Select Index (XLV), and the Amex SPDR Industrial Select Index (XLI).

Some of these, TER and XLI, for example, are showing fairly strong breakouts,  but the trend scores for the five days prior to breakout are just awful.

TER managed to score 50% of a day's average true range. XLI came in at a mere 11% of its ATR. Before I take a position, I like to see a trend score of 100% or greater.

Those three-figure scores used to be fairly common, but not the last few weeks. The market is in the doldrums.

Watching breakouts has been much like sitting through a performance of Samuel Beckett's "En attendant Godot", although these days the play is being written by Boehner and Obama, not Beckett, and we are en attendant -- not Godot, but the Cliff and the Ceiling. (Not to mention the Mayan Calendar End of the World on Dec. 21, the day December options expire!)

None of these are worth extensive analysis, so I shall return to drinking my English breakfast tea while reading a fascinating book about Bayes Theorem. In any case, I'm in the midst of a self-imposed moratorium on opening new positions until I see which way the political wind is blowing on the budget talks and potential default over the debt ceiling, which some Republicans are using as a threat to reprise the 2011 credit crisis.


My trading rules can be read here. (They don't talk about the trend score because I'm still developing it.)

And the classic Turtle Trading rules on which my rules are based can be read here.

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.

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