Monday's Prospects (one day late)

Note: "Monday's Prospects" was delayed because of a data-processing mishap, which has been corrected. Here it is, a day late.

On Friday, Aug. 9:

Of 2,325 stocks and exchange-traded funds in this week's analytical universe, 44 that are traded on the major American stock exchanges broke beyond their 20-day price channels, 12 to the upside and 32 to the downside.

Ten symbols traded over the counter broke out, all to the upside.

Within my analytical universe, 2.3% of symbols gave bull or bear signals, down from 2.9% the prior trading day.

The ratio of bull to bear signals is 1:1.5, the same as the prior trading day, suggesting the markets are neutral.

Two symbols traded on the major exchanges survived my initial screening, ARM and MMS, both to the upside.

One symbol traded over the counter survived my initial screening, CRHKY, to the upside.

I shall do further analysis of the surviving symbols on Monday, Aug. 12.

Second phase analysis:

ARM's move was as a result of an earnings announcement. In trading on Monday it failed to persist above the post-earnings high and so failed to confirm the breakout. (I will, however, keep an eye on it for a day or two.)

MMS confirmed its breakout.

CRHKY also broke out upon an earnings announcement, and confirmed the breakout on Monday.

I'll put MMS and CRHKY in the mix, along with Monday's symbols that survive initial screening, for consideration on Tuesday.

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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