Friday's (Monday'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. I'll be back in the United States from Monday, Aug. 5, and my trading schedule will return to normal.


On Thursday, Aug. 1:

Of 2,334 stocks and exchange-traded funds in this week's analytical universe, 97 that are traded on the major American stock exchanges broke beyond their 20-day price channels, 68 to the upside and 29 to the downside.

Seven symbols traded over the counter broke out, six to the upside and one to the downside.

The five highest-volume symbols to break out are ATML, NWSA, LYG, LUV and TRN.

Within my analytical universe, 4.5% of symbols gave bull or bear signals, up from 2.7% the prior trading day.

The ratio of bull to bear signals is 2.5:1, compared with 1:1.4 the prior trading day, the first bullish bias since July 23.

Five symbols traded on the major exchanges survived my initial screening, all having broken out to the upside. They are GHL, GIII, GWW, IHS and LUV.

No over-the-counter symbols survived my initial screening.

I shall do further analysis of the surviving symbol over the weekend for a potential trade on Monday, Aug. 5.

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.

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