Friday's Prospects

On Thursday, Sept. 12:

Of 2,339 stocks and exchange-traded funds in this week's analytical universe, 95 that are traded on the major American stock exchanges broke beyond their 20-day price channels, 88 to the upside and seven to the downside.

Five symbols traded over the counter broke out, four to the upside and one to the downside.

Within my analytical universe, 4.3% of symbols gave bull or bear signals, down from 4.5% the prior trading day.

The ratio of bull to bear signals was 11.5:1, compared to 34:1 the prior trading day, a weakening of the bullish bias.

Ten symbols traded on the major exchanges survived my initial screening, nine having broken out to the upside and one to the downside. The symbols giving bull signals are CHMT, DIS, DNKN, NOC, P, PLT, STM, TRLA and WSH. That giving a bear symbol is ABX.

No symbol traded over the counter survived initial screening.

The next round of earnings begins on Oct. 8, coming within the exclusion rule that forbids me from opening new positions in stocks within 30 days of an earnings announcement. This means that increasing numbers of symbols will be removed from my prospective trades list during initial screening.

In anticipation, I've loosened my screening rules to pass symbols with even odds or better of a successful trade, with an odds/yield combined score of 5% or greater.

I shall do further analysis on Friday, Sept. 13.

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...

• even odds or greater 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.