Tuesday's Prospects

On Monday, June 24:

Of 2,289 stocks and exchange-traded funds in this week's analytical universe, 120 that are traded on the major American stock exchanges broke beyond their 20-day price channels, five to the upside and 115 to the downside.

In addition, 16 that are traded over the counter broke out, all to the downside.

Within my analytical universe, 5.9% of symbols gave bull or bear signals, up from 4.7% the prior trading day.

The ratio of bull to bear signals is 1:26, compared to 1:13 the prior trading day, a strengthening of the bearish bias in the markets. It is the fourth consecutive trading day with a bearish bias.

Five of the major-exchange symbols survived my initial screening, one having broken out to the upside and four to the downside. They are FLTX to the upside and SNCR, VHC, WPRT and YOKU to the downside.

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

Two tech giants, BIDU and YHOO, were among the downside breakouts that had even odds of a profitable trade, but each had an adjusted yield that was below my cutoff point and so didn't make the cut.

I'll do further analysis on the survivors that confirm their signals by trading beyond their breakout levels on Tuesday, June 25.

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 whatever their open interest or sufficient volume to allow for the short sale of shares.

My cut-off point for bullish bias is a ratio of bull to bear signals of 2:1 or greater, and for bearish bias, 1:2 or smaller, rounded to the nearest whole number.