Wednesday, August 28, 2013

Thursday's Prospects

On Wednesday, Aug. 28:

Of 2,319 stocks and exchange-traded funds in this week's analytical universe, 53 that are traded on the major American stock exchanges broke beyond their 20-day price channels, 11 to the upside and 42 to the downside.

Twenty-one symbols traded over the counter broke out, two to the upside and 19 to the downside.

Within my analytical universe, 3.5% of symbols gave bull or bear signals, down sharply from 13.9% the prior trading day.

The ratio of bull to bear signals was 1:4.7, a major weakening of the markets' bearish bias from the prior trading day's 1:60.2 ratio.

No symbols traded on the major exchanges or over the counter survived my initial screening, all but one failing either because of weak odds of success or sufficient yield to meet my tests.

The exception was the over-the-counter stock AGPYY, a breakout to the downside, which passed the odds and yield tests. It failed because it lacks the options and liquidity to support a bear trade, as is common with over-the-counter stocks.

I shall do further analysis on Thursday, Aug. 29.

No survivors means I have nothing to analyze on Thursday, Aug. 29.

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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