Wednesday's Finalists

This will be brief. CVD was the lone survivor of the first round of analysis. (See "Wednesday's Prospects".)

Clearly, the markets even on Tuesday were winding down in anticipation of the end of the year.

CVD confirmed its bull signal. However, its options are too illiquid for use in the sort of trades I'm looking for these days: High-volatility ptions spreads sold for a credit and expiring in the front month or sooner. Open interest for January options is zero throughout.

So, no trade on CVD and no trades from Tuesday's market session, providing a damp firecracker finale to my analysis for 2014.

I'll be back on Friday, January 2, for the first analysis of 2015. The way my list stands now, the first opportunity to do analysis of a potential earnings play will come on January 6.

In the meanwhile, Happy New Year to all.

-- Tim Bovee, Portland, Oregon, December 31, 2014

References

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


Alerts

Two social media feeds provide notification whenever something new is posted.

• On Twitter, Follow Tim Bovee: https://twitter.com/TimBovee
• On Facebook, Like Private Trader: https://www.facebook.com/PrivateTrader

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 decisions for his or her own account, and take responsibility for the consequences.

License



All content on Tim Bovee, Private Trader by Timothy K. Bovee is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.

Based on a work at www.timbovee.com.

Wednesday's Prospects

On Tuesday, Dec. 30:

Of 1,287 stocks and exchange-traded funds in my analytical universe, five broke beyond their 20-day price channels, all to the upside.

One symbol survived initial screening, having broken out to the downside.

No symbols appearing on my supplemental list of innovative companies gave a bull signal.

There are no prospects for trades keyed to earnings under my Volatility Rules.

I shall do further analysis on Wednesday, Dec. 31.

The next earnings season begins Jan. 12 with the announcement by AA and runs six weeks. Under the exclusion rule that forbids me from opening new positions in stocks within 30 days of an earnings announcement, increasing numbers of symbols will be removed from my prospective trades list during initial screening.

First-round survivors: Regular rules

The lists are sorted in descending order by average yield. Regular rules means that confirmation will require trading above the 20-day price channel breakout level.

Bull CVD

Bear (none)

Innovators (bull) (none)

First-round survivors: Special handling

The lists are sorted in descending order by average yield. Rules for a breakout immediately following an earnings announcement require that confirmation on the following trading day, Reset Day, require that the price be beyond the Reset-Day 20-day price channel. A breakout following a stock going ex-dividend must be confirmed on the fifth trading day after ex-dividend day.

Bull earns (none)

Bear earns (none)

Bull ex-div (none)

Bear ex-div (none)

Potential trades under my Volatility Rules, keyed to events

The dates are those of the events, all of them earns announcements. Events prior to the opening bell are marked "am", during the trading day "mid", and after the closing bell "pm". The lists are sorted in descending order by average volume.

Friday pm (none)

Monday am (none)

Methodology

The stocks in my analytical universe all have analyst coverage through the stock-ranking company Zacks Investment Research. Not all of the exchange-traded funds are so covered.

I screen the symbols for historical odds of a profitable signal in the direction of the breakout for the past 12 months.

For symbols whose odds of success are greater than 50%, I next screen for the absence of an earnings announcement within the next 30 days.

For bear signals, I also screen to ensure the ability to do a trade because of the presence of options, without yet passing judgment on whether those options are liquid enough to support a trade.

I sort by the results in descending order by the average yield on signals in the direction of the breakout in preparation for the second round of analysis after the opening bell.

-- Tim Bovee, Portland, Oregon, Jan. 1, 2015

References

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.

Alerts

Two social media feeds provide notification whenever something new is posted.

• On Twitter, Follow Tim Bovee: https://twitter.com/TimBovee
• On Facebook, Like Private Trader: https://www.facebook.com/PrivateTrader

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.

License



All content on Tim Bovee, Private Trader by Timothy K. Bovee is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.

Based on a work at www.timbovee.com.Tss s ss

Tuesday's Finalists

Of late I've been looking for a specific sort of trade: High implied volatility, liquid front-month options with narrower bid/ask spreads, the sort of specifications suitable for short options spreads sold for a credit: bull put spreads or bear call spreads.

TIF alone among the symbols that gave trading signals during Monday's session (see "Monday's Prospects") met all of those criteria. And it failed confirmation by moving back within its 20-day price channel. Sometimes, I feel, the markets are laughing at us.

Another symbol, UGI, confirmed the signal but was moving countertrend, disqualifhing it from further consideration.

That left six finalists, all of whom failed to receive a passing grade.

RL and XRT had relatively low implied volatility.

SCI had open interest that marked its options as too illiquid for trading.

LOCK, TEN and AN had overly wide bid/ask spreads.

I won't be opening any positions based on Monday's trading signals.

-- Tim Bovee, Portland, Oregon, Dec. 30, 2014

References

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


Alerts

Two social media feeds provide notification whenever something new is posted.

• On Twitter, Follow Tim Bovee: https://twitter.com/TimBovee
• On Facebook, Like Private Trader: https://www.facebook.com/PrivateTrader

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 decisions for his or her own account, and take responsibility for the consequences.

License



All content on Tim Bovee, Private Trader by Timothy K. Bovee is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.

Based on a work at www.timbovee.com.

Tuesday's Prospects

On Monday, Dec. 29:

Of 1,287 stocks and exchange-traded funds in my analytical universe, 30 broke beyond their 20-day price channels, all to the upside.

Eight symbols survived initial screening, all having broken out to the upside.

No symbols appearing on my supplemental list of innovative companies gave a bull signal.

There are no prospects for trades keyed to earnings under my Volatility Rules.

I shall do further analysis on Tuesday, Dec. 30.

The next earnings season begins Jan. 12 with the announcement by AA and runs six weeks. Under the exclusion rule that forbids me from opening new positions in stocks within 30 days of an earnings announcement, increasing numbers of symbols will be removed from my prospective trades list during initial screening.

First-round survivors: Regular rules

The lists are sorted in descending order by average yield. Regular rules means that confirmation will require trading above the 20-day price channel breakout level.

Bull LOCK UGI TIF TEN RL SCI XRT AN

Bear (none)

Innovators (bull) (none)

First-round survivors: Special handling

The lists are sorted in descending order by average yield. Rules for a breakout immediately following an earnings announcement require that confirmation on the following trading day, Reset Day, require that the price be beyond the Reset-Day 20-day price channel. A breakout following a stock going ex-dividend must be confirmed on the fifth trading day after ex-dividend day.

Bull earns (none)

Bear earns (none)

Bull ex-div (none)

Bear ex-div (none)

Potential trades under my Volatility Rules, keyed to events

The dates are those of the events, all of them earns announcements. Events prior to the opening bell are marked "am", during the trading day "mid", and after the closing bell "pm". The lists are sorted in descending order by average volume.

Today pm (none)

Tomorrow am (none)

Methodology

The stocks in my analytical universe all have analyst coverage through the stock-ranking company Zacks Investment Research. Not all of the exchange-traded funds are so covered.

I screen the symbols for historical odds of a profitable signal in the direction of the breakout for the past 12 months.

For symbols whose odds of success are greater than 50%, I next screen for the absence of an earnings announcement within the next 30 days.

For bear signals, I also screen to ensure the ability to do a trade because of the presence of options, without yet passing judgment on whether those options are liquid enough to support a trade.

I sort by the results in descending order by the average yield on signals in the direction of the breakout in preparation for the second round of analysis after the opening bell.

-- Tim Bovee, Portland, Oregon, Dec. 30, 2014

References

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.

Alerts

Two social media feeds provide notification whenever something new is posted.

• On Twitter, Follow Tim Bovee: https://twitter.com/TimBovee
• On Facebook, Like Private Trader: https://www.facebook.com/PrivateTrader

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.

License



All content on Tim Bovee, Private Trader by Timothy K. Bovee is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.

Based on a work at www.timbovee.com.Tss s ss

Monday's Finalists

The two bull signals that made it past the early rounds of analysis (see "Monday's Prospects") failed in the final rounds, each on the same two counts.

Although LNG and VTI both confirmed their signals by continuing to trade beyond their 20-day price channels, they are both unsuitable for the sort of trade I'm looking for these days: Options spreads sold short for a credit.

These are very short term trades, typically lasting four weeks or less. They require both relatively high implied volatility, which I define as the 60th percentile or greater of the rise to the prior higher high, and liquid options, which I define as a front-month at-the-money bid/ask spread of under 10%.

I prefer very short-lived positions in part because the opportunity is there. We went with low volatility for long stretches during the year, with the VIX -- volatility on the S&P 500 -- below 13%. 

The VIX peaked in October at 31%, its highest point since 2011. And although it has since declined to 14%, it is relatively high for many stocks, presenting opportunities for short plays.

The other reason is uncertainty about the market's macro trend. The S&P 500 had been trending sharply upward since March 2009. That's a very long run to have without a significant downward correction. 

Couple that with the strong likelihood that the central bank will soon tighten down a bit to ensure that inflation stays in check, and my mental alarm bells are screaming that a major shift in trend is almost upon us.

Given the reality that I can't predict the timing of the downturn, only the historical certainty that it will occur, the prudent course is to stay out of long term commitments and focus on the shorter term.

Both LNG and VTI have bid/ask spreads in the double digits and relatively low implied volatility. They fail both requirements for very short term trades. Therefore, I won't be opening any new positions based on Friday's markets.

-- Tim Bovee, Portland, Oregon, Dec. 29, 2014

References

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

Two social media feeds provide notification whenever something new is posted.

• On Twitter, Follow Tim Bovee: https://twitter.com/TimBovee
• On Facebook, Like Private Trader: https://www.facebook.com/PrivateTrader

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 decisions for his or her own account, and take responsibility for the consequences.

License



All content on Tim Bovee, Private Trader by Timothy K. Bovee is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.

Based on a work at www.timbovee.com.

Minecraft for the Markets

Regular readers of Private Trader will know that my post titling is, well, to be blunt, extremely stereotyped and sort of boring. It's the same litany every day: "Prospects", "Finalists", "Outcomes", yada yada, yawn, ho-hum.

On some analyses I'll occasionally take a stab at seasoning the stew with bit of peppery wit, but rarely, and often without much success.

The reason traces back to the very nature of this project.

Private Trader is about the engineering of trades, how to construct trades for maximum reward at the expense of minimum risk. It's all about building the right risk/reward ratio embedded in favorable odds.

Think of it as Minecraft for the markets.

Market analysts who deal in stories and emotion have the freedom to spice up their titles with the goal of attracting clicks. My methods and goals are far removed from theirs.

In recognition of that fact, I'm changing my titling convention to provide more information at the expense of content glitter.

Analysis posts will have the stock symbol, a colon, and a brief description of the type of trade, consisting of the rule set underlying the trade and the direction. As in "AAPL: Shorter-term, bull", or "FB: Volatility, bear".

The rule sets are the titles of my current three rules sets: Shorter-term, Longer-term and Volatility. The directions are bull, bear and sideways.

Aside from adding clarity, this method lends itself to hashtagging and cashtagging. So the "AAPL: Shorter-term, bull" post above would be tagged on Twitter as

#privatetrader $AAPL #shorterterm #bull

I'm not yet hashtagging on the Private Trader Facebook page. If you have an opinion as to whether hashtagging and cashtagging would be useful in that venue, please weigh in with a comment to this post.

The social media feeds provide notification whenever something new is posted.

On Twitter, follow Tim Bovee: https://twitter.com/TimBovee

On Facebook, Like Private Trader: https://www.facebook.com/PrivateTrader

-- Tim Bovee, Portland, Oregon, Dec. 28, 2014

References

My shorter-term trading rules can be read here. My longer-term trading rules can be read here. And the classic Turtle Trading rules on which my rules are based can be read here. My volatility trading rules 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 decisions for his or her own account, and take responsibility for the consequences.

License



All content on Tim Bovee, Private Trader by Timothy K. Bovee is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.

Based on a work at www.timbovee.com.

The Week Ahead: ISM manufacturing, January effect

Friday, Jan. 2, is the first trading day of the new year, the session that begins a crucial week that sets the tone for all that will follow in 2015.

Or so the market lore goes. If the fifth trading day of the New Year -- Wednesday, Jan. 8 -- closes above the last trading day of the old year -- Wednesday, Dec. 31, then the market will experience a net rise for the entire year. This is called the January Effect.

Lore, of course, always has its doubters.

The top global money centers, including New York, will be closed on Thursday, New Year's Day.

Friday will kick off the new year with a report with some market-moving potential: The Institute of Supply Management manufacturing index, at 10 a.m. New York time.

Leading indicators (in descending order of importance):

Several reports have been moved from their normal release days because of New Year's Day.

The interest rate spread between 10-year Treasuries and the federal funds rate, reported continually during market hours.

The M2 money supply, at 4:30 p.m. Monday (moved from Thursday).

Vendor performance, also called the deliveries times index, from the Institute of Supply Management manufacturing survey, at 10 a.m. Friday.

The S&P 500 index, reported continually during market hours.

Average weekly initial jobless claims, at 8:30 a.m. Wednesday (moved from Thursday). 

Other items of interest:

Monday: Dallas Federal Reserve Bank manufacturing survey of conditions in Texas at 10:30 a.m.

Tuesday: The S&P Case-Shiller home price index in 20 U.S. metropolitan areas at 9 a.m. and the Conference Board consumer confidence report at 10 a.m.

Wednesday: The Chicago Purchasing Managers index at 9:45 a.m., the pending home sales index at 10 a.m. and  petroleum inventories at 10:30 a.m.

Friday: The Purchasing Managers index minutes before 9 a.m. and construction spending at 10 a.m.

I also keep an eye on the Baltic Dry Index, updated daily.

Treasury Debt

Bills

The 3- and 6-month bills have two announcements each.

• 4-week: Announcement Monday 11 a.m., auction Tuesday 11:30 a.m., settlement Wednesday.
• 3-month: Auction Monday 11:30 a.m., announcement Wednesday 11 a.m., announcement Friday 11 a.m.
• 6-month: Auction Monday 11:30 a.m., announcement Wednesday 11 a.m., announcement Friday 11 a.m.
• 52-week: Announcement Wednesday 11 a.m.

Fedsters

The Federal Reserve glitterati are no doubt spending the week in silent medication of the awesome challenges they shall face in 2015.

Analytical universe

This week I shall be analyzing new bull and bear signals among 1,287 mid-cap and larger stocks and exchange-traded funds.

Trading calendar

By my rules for shorter-term trades, I'm trading February options and later for the short legs of vertical, diagonal and calendar spreads and covered calls, and for all legs of butterfly spreads and iron condors. I'm trading April options and later for single calls and puts as well as straddles. Shares, of course, are good at any time.

Good trading, and Happy New Year!

-- Tim Bovee, Portland, Oregon, Dec. 28, 2014

License



All content on Tim Bovee, Private Trader by Tim Bovee is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.

Based on a work at www.timbovee.com.

Monday's Prospects

On Friday, Dec. 26:

Of 1,287 stocks and exchange-traded funds in my analytical universe, 13 broke beyond their 20-day price channels, all to the upside.

Two symbols survived initial screening, all having broken out to the upside.

No symbols appearing on my supplemental list of innovative companies gave a bull signal.

There are no prospects for trades keyed to earnings under my Volatility Rules.

I shall do further analysis on Monday, Dec. 29.

The next earnings season begins Jan. 12 with the announcement by AA and runs six weeks. Under the exclusion rule that forbids me from opening new positions in stocks within 30 days of an earnings announcement, increasing numbers of symbols will be removed from my prospective trades list during initial screening.

First-round survivors: Regular rules

The lists are sorted in descending order by average yield. Regular rules means that confirmation will require trading above the 20-day price channel breakout level.

Bull LNG VTI

Bear (none)

Innovators (bull) (none)

First-round survivors: Special handling

The lists are sorted in descending order by average yield. Rules for a breakout immediately following an earnings announcement require that confirmation on the following trading day, Reset Day, require that the price be beyond the Reset-Day 20-day price channel. A breakout following a stock going ex-dividend must be confirmed on the fifth trading day after ex-dividend day.

Bull earns (none)

Bear earns (none)

Bull ex-div (none)

Bear ex-div (none)

Potential trades under my Volatility Rules, keyed to events

The dates are those of the events, all of them earns announcements. Events prior to the opening bell are marked "am", during the trading day "mid", and after the closing bell "pm". The lists are sorted in descending order by average volume.

Today pm (none)

Tomorrow am (none)

Methodology

The stocks in my analytical universe all have analyst coverage through the stock-ranking company Zacks Investment Research. Not all of the exchange-traded funds are so covered.

I screen the symbols for historical odds of a profitable signal in the direction of the breakout for the past 12 months.

For symbols whose odds of success are greater than 50%, I next screen for the absence of an earnings announcement within the next 30 days.

For bear signals, I also screen to ensure the ability to do a trade because of the presence of options, without yet passing judgment on whether those options are liquid enough to support a trade.

I sort by the results in descending order by the average yield on signals in the direction of the breakout in preparation for the second round of analysis after the opening bell.

-- Tim Bovee, Portland, Oregon, Dec. 28, 2014

References

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.

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.

License



All content on Tim Bovee, Private Trader by Timothy K. Bovee is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.

Based on a work at www.timbovee.com.Tss s ss

Friday's Finalists

Today begins the wort trading week of the year. Stock prices might be lackadaisical, or they might turn aggressively bullish or bearish.

In any case, the trading decisions are being made by unmonitored robots and interns. The robots are working with their usual inscrutability -- who knows what Terminator thoughts of world domination are coursing through their CPUs. The interns -- well, think long liquid lunches and, as New Year's approaches and spirits rise, intense frisbee fights with pizza plates in the brokerage bull pens.

Who would want to trade into such an environment? Not I, certainly, and so my default position until the first trading day of 2015 will be to open no new positions. I shall, however, continue my usual analysis, just to keep in tune with the markets, no matter how distorted they might be.

There are no potential earnings plays on the calendar to consider until Jan. 4.

All four of the survivors of my early rounds of analysis,  CDTY, CDNS, SAP from Wednesday's markets and CMG from my list of innovators, have relatively low implied volatility. This precludes trading them using my preferred tactic of late: Selling option spreads short in order to buy them back later at a cheaper price.

I'm using this strategy a lot because, unlike six months ago, volatility is high. If volatility in general drops, then Ill move to another strategy.

There may be other issues with the four symbols, but with the discovery of the one, they're off the table and there is no need to analyze further.

(See "Friday's Prospects" for a discussion of trading signals from Wednesday's markets.)

-- Tim Bovee, Portland, Oregon, Dec. 26, 2014

References

My shorter-term trading rules can be read here. My longer-term trading rules can be read here. And the classic Turtle Trading rules on which my rules are based can be read here. My volatility trading rules 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 decisions for his or her own account, and take responsibility for the consequences.

License



All content on Tim Bovee, Private Trader by Timothy K. Bovee is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.

Based on a work at www.timbovee.com.

Friday's Prospects

Note that the start of the earnings season has been changed to Jan. 12 as AA moved its announcement.

On Wednesday, Dec. 24:

Of 1,273 stocks and exchange-traded funds in my analytical universe, 18 broke beyond their 20-day price channels, 16 to the upside and two to the downside.

Three symbols survived initial screening, all having broken out to the upside.

One symbol appearing on my supplemental list of innovative companies gave a bull signal.

There are no prospects for trades keyed to earnings under my Volatility Rules.

I shall do further analysis on Friday, Dec. 26.

The next earnings season begins Jan. 12 with the announcement by AA and runs six weeks. Under the exclusion rule that forbids me from opening new positions in stocks within 30 days of an earnings announcement, increasing numbers of symbols will be removed from my prospective trades list during initial screening.

First-round survivors: Regular rules

The lists are sorted in descending order by average yield. Regular rules means that confirmation will require trading above the 20-day price channel breakout level.

Bull COTY CDNS SAP

Bear (none)

Innovators (bull) CMG

First-round survivors: Special handling

The lists are sorted in descending order by average yield. Rules for a breakout immediately following an earnings announcement require that confirmation on the following trading day, Reset Day, require that the price be beyond the Reset-Day 20-day price channel. A breakout following a stock going ex-dividend must be confirmed on the fifth trading day after ex-dividend day.

Bull earns (none)

Bear earns (none)

Bull ex-div (none)

Bear ex-div (none)

Potential trades under my Volatility Rules, keyed to events

The dates are those of the events, all of them earns announcements. Events prior to the opening bell are marked "am", during the trading day "mid", and after the closing bell "pm". The lists are sorted in descending order by average volume.

Today pm (none)

Tomorrow am (none)

Methodology

The stocks in my analytical universe all have analyst coverage through the stock-ranking company Zacks Investment Research. Not all of the exchange-traded funds are so covered.

I screen the symbols for historical odds of a profitable signal in the direction of the breakout for the past 12 months.

For symbols whose odds of success are greater than 50%, I next screen for the absence of an earnings announcement within the next 30 days.

For bear signals, I also screen to ensure the ability to do a trade because of the presence of options, without yet passing judgment on whether those options are liquid enough to support a trade.

I sort by the results in descending order by the average yield on signals in the direction of the breakout in preparation for the second round of analysis after the opening bell.

-- Tim Bovee, Portland, Oregon, Dec. 26, 2014

References

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.

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.

License



All content on Tim Bovee, Private Trader by Timothy K. Bovee is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.

Based on a work at www.timbovee.com.Tss s ss

Wednesday's Finalists

Many were called, many were chosen, none made it past the finish finish line.

Tuesday's rush to the upside in the markets produced a flurry of headlines and a small mountain of trading signals. Wednesday's opening half hour saw calm sanity return to the markets -- or a simulacrum of sanity, at least -- that will no doubt produced few headline. Sanity, you understnd, doesn't bring eyeballs and clicks to financial websites.

See "Wednesday's Prospects" for a description of my early rounds of analysis.

Of the 18 symbols that made it past those early rounds, seven failed in their momentum, either failing confirmation by moving back within their 20-day price channels or running contrary to the direction of the trading signal. One turned out to be a contrarian fund with leverage, a type of equity I don't trade.

That left 10.

• KSS and CRM had charts that were insufficiently trending to support their trading signals.
• WSM, SNN, CAR, GNC, CCK and OFC had bid/ask spreads on their front-month at-the-money calls that were too narrow to meet my preferences.
• EMC and XLY had relatively low implied volatility, making it impossible to construct my preferre sort of trade.

I plan no trades based on Tuesday's signals.

Turning next to the three companies on my innovators list, I find that all three failed the implied volatility test. I'm using a short-term strategy that require higher volatility.

I also considered them as trades under my longer-term rules, but none are close to a breakout above the 12-month moving average at the end of the month. All are in a bullish posture and so don't yet present an opportunity for entry.

No trade there, either, so this wraps up my trading for the holiday.

Merry Christmas to all who celebrate it. Enjoy!

-- Tim Bovee, Portland, Oregon, Dec. 24, 2014

References

My shorter-term trading rules can be read here. My longer-term trading rules can be read here. And the classic Turtle Trading rules on which my rules are based can be read here. My volatility trading rules 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 decisions for his or her own account, and take responsibility for the consequences.

License



All content on Tim Bovee, Private Trader by Timothy K. Bovee is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.

Based on a work at www.timbovee.com.

Wednesday's Prospects

The U.S. stock exchanges close at 1 p.m. New York time today, and the bond market closes at 2 p.m.

On Tuesday, Dec. 23:

Of 1,273 stocks and exchange-traded funds in my analytical universe, 69 broke beyond their 20-day price channels, 62 to the upside and seven to the downside.

18 symbols survived initial screening, 16 having broken out to the upside and two to the downside.

Three symbols appearing on my supplemental list of innovative companies gave bull signals.

There are no prospects for trades keyed to earnings under my Volatility Rules.

I shall do further analysis on Wednesday, Dec. 24.

The next earnings season begins Jan. 12 with the announcement by AA and runs six weeks. Under the exclusion rule that forbids me from opening new positions in stocks within 30 days of an earnings announcement, increasing numbers of symbols will be removed from my prospective trades list during initial screening.

First-round survivors: Regular rules

The lists are sorted in descending order by average yield. Regular rules means that confirmation will require trading above the 20-day price channel breakout level.

Bull MWV WSM SNN CAR ESRX GNC KSS HMHC TRV CRM BKD CCK EMC AGCO OFC XLY

Bear ANAC FAZ

Innovators (bull) UPS CL SJM

First-round survivors: Special handling

The lists are sorted in descending order by average yield. Rules for a breakout immediately following an earnings announcement require that confirmation on the following trading day, Reset Day, require that the price be beyond the Reset-Day 20-day price channel. A breakout following a stock going ex-dividend must be confirmed on the fifth trading day after ex-dividend day.

Bull earns (none)

Bear earns (none)

Bull ex-div (none)

Bear ex-div (none)

Potential trades under my Volatility Rules, keyed to events

The dates are those of the events, all of them earns announcements. Events prior to the opening bell are marked "am", during the trading day "mid", and after the closing bell "pm". The lists are sorted in descending order by average volume.

Today pm (none)

Tomorrow am (none)

Methodology

The stocks in my analytical universe all have analyst coverage through the stock-ranking company Zacks Investment Research. Not all of the exchange-traded funds are so covered.

I screen the symbols for historical odds of a profitable signal in the direction of the breakout for the past 12 months.

For symbols whose odds of success are greater than 50%, I next screen for the absence of an earnings announcement within the next 30 days.

For bear signals, I also screen to ensure the ability to do a trade because of the presence of options, without yet passing judgment on whether those options are liquid enough to support a trade.

I sort by the results in descending order by the average yield on signals in the direction of the breakout in preparation for the second round of analysis after the opening bell.

-- Tim Bovee, Portland, Oregon, Dec. 24, 2014

References

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.

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.

License



All content on Tim Bovee, Private Trader by Timothy K. Bovee is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.

Based on a work at www.timbovee.com.Tss s ss

Tuesday's Outcome: LVS

I've closed my bear position in LVS. See the update to my Dec. 9 analysis for results and a discussion of the outcome, "LVS: Volatility play".

References

My shorter-term trading rules can be read here. My longer-term trading rules can be read here. And the classic Turtle Trading rules on which my rules are based can be read here. My volatility trading rules 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 decisions for his or her own account, and take responsibility for the consequences.

License



All content on Tim Bovee, Private Trader by Timothy K. Bovee is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.

Based on a work at www.timbovee.com.

Tuesday's Finalist

CSCO alone made it into the final rounds of analysis. Of the other four surviving the early round, RCPT failed confirmation, and AIV, AMAT and DEI were trending counter to their trading signals. (See "Tuesday's Prospects".)

The bid/as spread on CSCO is quite narrow and totally meets my guidelines.

However, the implied volatility is on the low side. These days I'm looking for high volatility symbols that I can trade as options spreads sold for a credit and expiring in a few weeks.

CSCO publishes earnings on Feb. 11. If volatility rises in the interim, then there shall be an opportunity to consider it as a play keyed to the earnings announcement.

-- Tim Bovee, Portland, Oregon, Dec. 23, 2014

References

My shorter-term trading rules can be read here. My longer-term trading rules can be read here. And the classic Turtle Trading rules on which my rules are based can be read here. My volatility trading rules 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 decisions for his or her own account, and take responsibility for the consequences.

License



All content on Tim Bovee, Private Trader by Timothy K. Bovee is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.

Based on a work at www.timbovee.com.