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I'm about to update the information for Thursday. In case you missed today's it was as follows:
The screened stock ratio has finally crossed the line into the over sold range with down trending stocks swamping the up trending stocks at -5.02 favoring selling, the estimate of market risk remains high. The ratio still calls for "lite" mode, but there is now more hope for a bounce, let the ratio turn back up a couple days first, which should be soon at this point. The index remained a minus 4 or lower for only 5 days last September and the bottom was a negative 6.08.
Again, there are no additions to the either the short term list and there was one KROL potential breakout stock (KROL) that met the volume criteria. Removing the volume criteria, ANH, MME, PETM and PIR showed up in the short term screening. Note that we have a position in MME. If you like gold stocks watch GFI. On the short screening, CMOS, GLK, PRE and SKYW screened out. If we get a bounce today this should also bounce but would likely turn back down with the market.
We are in Jackson today, so I missed the market action, but it looks like you could have still made money on these stocks.
Sam
To conclude a true market turnaround I'd like to see the ratio improve two consecutive days, that would take some buying in the afternoon too <g. Nevertheless, it is very unlikely that the ratio will stay this low or go lower for very many days, so we are very close to a short term bottom....we'll see.
Sam
Our assessment of market risk and a few stocks to watch for tomorrow, Wednesday, are posted on the http://www.savvy-trader.com site.
Sam
The screened stock ratio went to -5.02. The balance between the up trending stocks moving up on above average volume compared to the down trending stocks moving down on above average volume, has gone to the extreme that usually indicates a coming reverse.
Sam
KROL was the only breakout that held up, CHBS closed up, but lost much of its gain.
Sam
Nothing new on the screening except some potential breakouts that didn't meet the volume criteria. Could watch those but be careful.
Sam
I've got the group rotation link back on the site. For more detailed group strength data see: http://www.savvy-trader.com/sectorrotation.htm
Sam
There won't be any additions to the short term list this evening. There was nothing new on the screening, and amazingly enough, two removed cause they have risen to high above their support, PBG and TGH.
Sam
I thought I'd give a run down on the day trade breakout stocks.
Some of this are worth watching again tomorrow with the same alert price. (20 cents above Friday's close)
CLE- closed up but didn't breakout. Could be worth watching again tomorrow but it has quite a run to go before breaking.
COCO- closed down, and it did hit the alert price. I suspect it will return to the list in a day or two.
DLM- closed up but didn't breakout. Also worth keeping an eye on.
HRB- closed up alerted and did very well under the market conditions.
IBC- closed up but didn't breakout, add to the watchlist for tomorrow.
LEN- closed up, did breakout but closed below the breakout price.
MDC- closed down and never alerted, this is one I really liked too.
OLN- closed up but just below the alert price, looks good.
Sam
TGH not bad on the day....see if it holds up as a short term position.
Sam
Three of the breakouts alerted today, COCO, HRB and OLN...
Not bad with the market being so soft.
Sam
Interesting, thanks Steve.
My weekend was nice, thank you. Actually I was suppose to till the back yard, where we are planting a lawn, but lucked out and they accidently gave our machine to someone else...whew...it would have been a hot one....I've really only postponed it...
We went out to eat tonight cause it was too hot to cook. Now if I can just do a few more things without falling to sleep.
I had seen Zeev's first post, but not the second. While Zeev is correct in the big picture, and he does an excellent job laying it out. Within the details of that big picture even the 1966 to 1982 period produced tradable rallies for a significant periods of time. And there were sectors that outperformed others. I suspect he probably mentions that too <g.
That could be just what we are looking at for years to come, one difference might be there will likely always be more funds putting money to work in stocks than there was prior to 82 as most pension funds will still collect as long as we return to stocks beating bonds.
Sam
Trigon Healthcare (TGH) is one of the few that had enough volume in its own to come up on the short term screening. It looks like a buy between $96.85 and $99.30 with a stop at $95.88 and a target of 107.34. So from that top of the buy range to the stop is a risk of $3.42 with a potential gain from the top of the buy range to the target of $8.04. Earnings are expected July 29.
Sam
I ran the potential breakout screen without have any volume requirements. Not as many showed up as I was thinking there would be, and some good looking charts. They are worth watching Monday, as usual I'd set an alert 20 above Friday's close and take a look at the stock after the it alerts. Often you can pick them up near the high or even near the previous close after they alert, since many will get profit taking on the move to higher ground before continuing the move up. This were you have to make a judgement on whether a running stock has enough momentum to keep going.
When they alert at the open you have a couple options, buy a 1/2 position at the opening price, then pick up the other 1/2 either breaking the high made during the first 20 minutes, or buying on a dip when/if the stock tests the support at the previous day's high or close.
Remember something upwards of 80% of the breakouts come back down to test support within a few days, so these are best day trades or exited near the open of the next day.
Claires Stores (CLE) is very close to breaking its 52-week high. We haven't watched this one in a long time and after seeing the chart it looks like the only thing that would have kept it coming up as a short term trade potential the first of June was its lack of volume.
Corinthian Colleges (COCO) was on our breakout list 6/16 and 6/20, performing very well. It took several days for it to retrace those gains.
Del Monte Foods (DLM) was another that broke out in June, but not making the list due to volume concerns.
H&R Block (HRB) is a stock we follow weekly and have commented the last few weeks about the channel it is in, could be staging a breakout of that channel now.
Interstate Bakeries (IBC) is another we have had for the last several weeks since it has been regularly moving up in steps.
Lennar (LEN), another we have been following. A home builder.
MDC (MDC) is a another home builder, that I know nothing about, but I should for several reasons. Nice looking chart too.
Olin (OLN) is extended chart wise (distance above support), but not percentage wise on the chart. Valuation may be another question all together for this stock. There are some product reasons why the stock has been resistant to the current downtrend in most stock groups.
That is all that came up, hope it is useful.
Sam
<g....I've heard something that goes like that....
I never have traded options, when I've looked into it, I just couldn't see how I could cover the costs. Frankly, I just don't know enough about them or the different strategies and have done well sticking to my knitting. Just a couple months ago we got an e-mail from a woman that did the options program for Pristine, asking if we wanted to add that to our site, but in these tight times, and with fewer people trading stocks no less options, it didn't seem we could afford her. That may have been a mistake since I'm always interested in rounding out the site and my own experience.
Sam
Hi Mechanical Method,
I debated that idea, just to see what I'd get for potential breakouts. My last thoughts on it was that, more than usual, after such a run up on low volume the breakouts might be the first to get hit by profit taking.
But, it does no harm to see what would come up on the screening, so I'll run it and post them here shortly.
Thanks,
Sam
I just ran our screening...and there was too little volume to get any breakout potentials to show up, there was enough volume to get 3 short term selections. The volume will also effect the screened stock ratio, but it will have an equal effect on both sides of the ratio.
Sam
Excellent Steve.....just looking around and noticed you had a good day <g
Sam
Today worked out as expected, have a good weekend. I'll be here getting ready for next week....should be interesting...
Sam
This close should give a pop at the open Monday anyway, but after that, I suspect we will see a test. There was lots to trade today and that should help the screening this weekend.
Sam
With about 2 hours left the bulls are controlling today. But, I'm not expecting a large reversal to even out positions at the end of the day today, like Wednesday, where the shorts were in control and closing out before the close. I would figure that most consider much of the event risk of the 4th has passed, so they aren't going to sell long positions picked up today. Some might anticipate a pop on Monday morning and add longs.
Sam
Looks like a strong open, the safest way to play is to set an alert just above the high made during the first 20 minutes. That will keep you from buying most of the gaps that fade away after opening strong.
Sam
The site is updated for Friday. A couple new short term trades, but not one breakout showed up on the screening. We're off to watch fireworks <g.
Sam
Everyone have a nice safe holiday tomorrow.
Sam
The amazing happened. It appears that as far as the balance of those who were day trading, there were more in shorts that wanted to clear their positions, than there was long wanting to clear before the holiday. Which is what we were figuring when the market was so weak this morning. This doesn't mean that Friday will be up based on today's action, but I would expect Friday to be relatively good anyway. We'll see.
Sam
It would be amazing to see the market go up today, everything is working against the longs, primary today would be the event risk. Who is wanting to hold long positions overnight with all the worries about a terrorist attack tomorrow? On the other hand, we have a position in INVN and will likely hold that.
Sam
The site is updated for tomorrow at http://www.savvy-trader.com
Sam
Even though all the shorts on the list today did well, they were hard to enter, my biggest gainer today was DRS, going long. I'll be adding more shorts on the watchlist for tomorrow, stocks that are breaking down and should be good for more than one day, but we are likely close to a bounce, so for myself, I'll be looking for more longs on good stocks that get oversold, rather than going short until maybe later in the day.
Sam
Since I couldn't seem to get into a short this morning, the best I did was get the bounce on DRS. Market looks to end weak, just not as much selling as yesterday before the close.
Sam
SWFT from yesterday's breakout looks safer after backing down from a strong open, otherwise the shorts seem to be getting the activity. I'm looking for buy on DRS in this selloff.
Sam
It looked like we would get a dump at the open this morning, which again makes for day trades long on EBAY, KLAC, ESST and MXIM. But now that the futures have recovered it no long is going to be an option. I got to thinking last week that the bear market would be over when these bounces after the gap down didn't work, but there are other factors at work that would influence these bounces.
Sam
I got a couple e-mails regarding the table, so I went ahead and got it back on the site tonight.
Sam
I've made a few repairs to the home page I messed up last night. There are a few shorts and longs but I haven't put the target table back up yet.
Sam
Obviously ITMN and TER shorts alerted today. CNA didn't alert but I think it is still worth a crack if financials weaken. On the long side today, AGM alerted right off, it was a stock we looked at Friday after a member in the room brought it up, and added to the watch screen today. The only breakout of that alerted was SWFT and it went nowhere. The short termers were bloodied with 1/2 hitting stops, again, this points to the value of paying attention to market risk.
Sam
No, we were just trying find plants for the yard that were more drought resistant. This drought is even worse.
Sam
It will take a 40% rally to make the NAZ even on the year.....that would be in 6 months......
Sam
We sure are at a telling point here, meeting Sept lows and the breakout of 1998....
Sam
I managed to make a mess of things tonight so I won't be doing the short term trade simulation after all. The longs are posted, with all the detail. I was also going to mix some shorts in this trade example. The shorts would be CNA, ITMN and TER.
Sam
That reminded me of something, that and the fact that we are having a terrible drought here in Wyoming <g>.
In the spring or early summer of 1987 we went to the county extension office to get some information about drought tolerant trees and bushes. The office was staffed by a variety of folks, and as we came down the hall, 3 or 4 guys were standing outside this office door discussing the hand drawn chart taped up on the outside of the door. The chart was a daily chart of the Dow Jones and some mutual fund or retirement fund these guys were invested in. It was a good display of the very good relative strength of their fund over the Dow.
When I saw how all ahgahgah these guys were about all the money they were making the chill of the bear ran down my spine. After the crash of 87 they quit tracking, I suspect the bull returned when someone trashed the chart.
It turned out that the guy that who actually posted the chart was an ag. economist. After the crash he called me and asked if I'd come visit him and his wife about something....something he wouldn't give me details over the phone. I agreed, figuring he wanted to talk about the stock market. I went over to his house with a big head thinking I was pretty important that an economist would finally ask my advice. Wrong....he got involved with an Amway pyramid and thought he could suck me in!
We live and learn....hopefully.
Sam
After sorting through the top stock groups I narrowed some top stocks to keep an eye on, but check them out in detail before investing (some have lower floats):
Metal Ores-
GFI - a gold stock that close to support, it also benefits from the strengthening Rand.
Retail-Apparel
CHS, ROST, WTSLA and COH. Two of this are on our weekly list, ROST use to be and COH has been on the daily watchlist.
Home Builders
DHI and LEN. This is a group we have been on top of for months. HOV, RYN and others have been on our daily watchlist.
Retail-Misc.
What a fun group, everything from car parts to candles. One standout of interest to check out is BTH. And, look at the channel KDE has been trading in since September.....and if it breaks 21.38?
HMO's
ATH is one I haven't followed much, it looks good, and we can't forget our UNH and WLP.
Retail-Misc.
Diverse! ACMR (low float but interesting), BBBY, PETM and MOVI.
Retail-Discount
DLTR (on the breakout list for Monday), FRED and another that I haven't followed much and low floater that looks interesting, PCTY.
Restaurants
One of my favorite groups, and lots to feast on. LNY, CHKR, PNRA, PFCB, PZZA and DRI are all stocks we have chewed on at one time or another. But, one I found that I don't know much about, that does look good is TENT.
Sam