A most unusual day

Regular readers will know that I was unable to trade or analyze on Friday because of a flight to East Asia. As it turns out, Thursday -- the day that produced potential trades for Friday under my procedures -- was a most unusual day. Here's the write-up for the record, published a day late. Had it been published on the normal schedule, it would be titled "Friday's Prospects".

On Thursday, July 11:

Of 2,302 stocks and exchange-traded funds in this week's analytical universe, 236 that are traded on the major American stock exchanges broke beyond their 20-day price channels, 234 to the upside and two to the downside.

Thirty-three symbols that are traded over the counter broke out, all to the upside.

The five highest-volume symbols to break out are SPY, QQQ, CX, XLI and VOD.

Within my analytical universe, 11.7% of symbols gave bull or bear signals, up from 3.4% the prior trading day and the highest since I began this form of analysis in early May. The closest approach was 11.3% on June 20.

The ratio of bull to bear signals is 134:1, compared to 10:1 the prior trading day, also in my experience a high in either direction.

Twelve of the major-exchange symbols survived my initial screening, 11 having broken out to the upside and on to the downside. The upside signals are on AZPN, CIEN, CPB, EDZ, GIS, KEP, OXM, PLL, SSO, VNQ, VTI and WPPGY, and the downside signal is on EDZ, a short exchange-traded fund tracking emerging markets.

The highest-volume symbol on the U.S. exchanges, the fund SPY, which tracks the S&P 500, failed to survive screening after breakout because of lower than acceptable historical returns, a condition that isn't unusual for highly diverse funds.

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

Fifty-four symbols that survived the odds and yield analysis were excluded from consideration because they will publish earnings within 30 days of the breakout. I won't list them all. The five top-volume symbols in the list  are DIS, CELG, AEP, BKD and HCN.

Earnings season began July 8 and will continue at a high pace for several weeks to come.

In the normal course of things, I would have done further analysis of the survivors on Friday, July 12, but I was cooped up in a trans-Pacific airliner and so missed all the fun. I'll put at least some of them into the mix when I analyze Friday's breakouts to find prospects for Monday.

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.

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.