Prior to the end of last week I screened by calculating historical odds on bull and bear signals stretching back a year from the present. That period is what I call the "analytical span".
Those odds are the first step in my screening. A stock that, during the past year, profited from half or more of its trades in the direction of the most recent bull or bear signal lived to face further tests. Those that were unprofitable for more than half of those trades were stricken from further consideration.
A year is a meaningful span for a company's finances and management, but fairly arbitrary for the markets.
Long-time readers will know that I'm always looking for an opportunity to cut out the arbitrary and replace it with something more closely tied to the charts.
To that end, I've changed the analytical span to match the period from the start of the most recent weekly-chart trend on the S&P 500 up to the present. The S&P 500 has been in an uptrend since Oct. 4, 2011.
In practice, I doubt that the change will make a huge difference. Many stocks, especially those with higher market capitalization, tend to track the S&P 500 to a large extent.
References
My trading rules can be read here. And the classic Turtle Trading rules on which my rules are based can be read here.
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.
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