Thursday's Prospects

On Wednesday, May 29:

Of 2,309 stocks and exchange-traded funds in this week's analytical universe, 114 that are traded on the major American stock exchanges broke beyond their 20-day price channels, nine to the upside and 105 to the downside.

In addition, 11 that are traded over the counter broke out, one to the upside and 10 to the downside.

Within my analytical universe, 5.4% of symbols gave bull or bear signals, up from 2% the prior trading day.

The ratio of bull to bear signals is 1:11.5, compared to 1:1.8 the prior trading day, suggesting a bearish bias in the market. My cut-off point for bullish bias is 2:1 or greater, and for bearish bias, 1:2 or smaller.

Two of the major-exchange symbols survived my initial screening, one each having broken out in either direction, HMA to the upside and CLF to the downside.

None of the over-the-counter symbols survived my initial screening.

I'll do further analysis on the survivors that confirm their signals by trading beyond their breakout levels on Thursday, May 30.

The symbols I'm analyzing are mid- and large-cap stocks having analyst coverage, as well as selected exchange-traded funds. I screened them for

• the odds of a successful trades in the direction of the breakout since the present uptrend began on the S&P 500 weekly chart, on Oct. 4, 2011,
• a yield adjusted by those odds of 5% or greater,
• and absence of an earnings announcement within the next 30 days. 

For bear signals, I also screened to ensure the ability to do a trade, either because of the presence of options or sufficient liquidity to allow for short sale.