Tuesday, July 30, 2013

Wednesday's (Thursday's) Prospects

I'm trading from East Asia this week, and the time difference with New York adds a day to the interval between breakout and the placing of a trade. This has played hob with the titling of recurring posts, such as Prospects and No Trade. The hybrid titling in this post is my solution: I would trade on the first day in the title if I were stateside, but my first trading opportunity while traveling will be on the second day, in parentheses.

On Tuesday, July 30:

Of 2,334 stocks and exchange-traded funds in this week's analytical universe, 46 that are traded on the major American stock exchanges broke beyond their 20-day price channels, 13 to the upside and 33 to the downside.

One symbol that is traded over the counter broke out, to the downside.

The five highest-volume symbols to break out are HMA, PBI, IPI, WU and ORCL.

Within my analytical universe, 2% of symbols gave bull or bear signals, down from 2.3% the prior trading day.

The ratio of bull to bear signals is 1:2.6, compared with 1:4.9 the prior trading day, showing a weakening bearish bias in the markets.

No symbol traded on the major exchanges or over-the-counter survived my initial screening.

Four symbols that survived the odds and yield analysis were excluded from consideration because they will publish earnings within 30 days of the breakout. They are CGNX, GVA, MPEL and WU.

I shall do further analysis of the surviving symbol on Tuesday, July 30 for a potential trade on Wednesday, July 31.

No survivors, so no further analysis of Tuesday's bull and bear signals.

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.


My trading rules can be read here. 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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