Tuesday, December 17, 2013

No Tuesday Prospects trade

I won't be opening a new position off of my "Tuesday's Prospects" list. All have failed my second-level analysis.

The one potential bear play, CXW, had an extremely wide  bid/ask spread on its margins, too wide for me to comfortably play.

I looked at the rest as bull plays.

HY and SJMHF failed confirmation by falling back within their price channels, negating the signals.

MENT and IIVI had bearish ratings from Zacks. I prefer that Zacks either be aligned in the direction of the trade, or at the least, in the case of options plays, be neutral.

After preliminary Elliott wave analysis, I concluded that CG's chart was bearish, contrary to the signal, and TX and SSTK seemed to be topping

I next looked at three small-cap symbols that survived first-level analysis, all having given bull signals.

AXX failed confirmation.

SMP had a neutral rating from Zacks. For stock plays, especially small, lower liquidity stocks, I like Zacks to be aligned in the direction of the trade; neutrality is not enough.

CBZ, the most liquid of the three, is topping, according to a quick Elliott wave analysis.

So I rejected them all and rather than hammer through a detailed Elliott wave count and analysis, am stepping away to brew a second pot of green tea and shall spend an hour relaxing with an excellent work of SciFi, written by a former colleague from my Associated Press days in Washington, D.C., John Lumpkin.


My shorter-term trading rules can be read here. And the classic Turtle Trading rules on which my rules are based can be read here.

Elliott wave analysis tracks patterns in price movements. The principal practitioner of Elliott wave analysis is Robert Prechter at Elliott Wave International. His book, Elliott Wave Principle, is a must-read for people interested in this form of analysis, as is his most recent publication, Visual Guide to Elliott Wave Trading

Several web sites summarize Elliott wave theory, among them, Investopedia, StockCharts and Wikipedia.

See my post "Chart Analysis: Nomenclature" for an explanation of my method for labeling waves on the chart.

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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