Bears Win Today’s Screen Game, Here’s Why It Doesn’t Matter

Originally posted at The Daily Stool – Stool Pigeons Wire

Bears win today’s Screen Game by a score of 22 to 11. That’s swing trade sell signals vs. buy signals.

The bears have been making a showing. They had won the weekend screen 24 to 17. I only post that screen, and my selections for that week’s trade candidates, in the Technical Trader newsletter. Check it out! 90 day risk free trial for first time subscribers.

Thursday’s data resulted in a virtual tie. Bears won Wednesday’s data 23-8.

Why isn’t the market pulling back? Answer- residual momentum.  There haven’t been enough sell signals to offset the 155 buy signals on March 28, representing the thrust off the intermediate bottom.

Here is today’s  output.

This is raw data. These are not recommendations. They represent charts that have triggered short term signals near key cyclical support or resistance levels. Pick through these and see if there are any that you like from your own charts. Feel free to post your charts here with comments.

 

Symbol Buy Sell 500 200 125 50
BMY 1 0 0 0 1 0
CNC 1 0 0 0 1 0
CAG 1 0 0 1 0 0
DHR 1 0 0 0 1 0
DUST.K 1 0 0 1 0 0
LABD.K 1 0 0 0 1 0
FEYE.O 1 0 0 0 1 0
IRWD.O 1 0 0 0 0 1
LULU.O 1 0 0 0 0 1
M 1 0 0 0 0 1
MFH.O 1 0 0 0 0 1
ATVI.O 0 1 0 0 0 1
AMD.O 0 1 0 0 0 1
AZUL.K 0 1 0 0 1 0
BDX 0 1 0 1 0 1
CNK 0 1 0 0 0 1
EW 0 1 0 0 1 0
FCG 0 1 0 0 0 1
FRO 0 1 0 0 0 1
GRFS.O 0 1 0 1 0 0
IBN 0 1 0 0 1 0
ILF 0 1 0 0 1 0
KALA.O 0 1 1 0 1 0
MAXR.K 0 1 0 0 1 0
MLCO.O 0 1 0 0 0 1
NYT 0 1 0 0 1 0
EGOV.O 0 1 0 0 0 1
NCLH.K 0 1 1 0 0 0
PK 0 1 0 0 0 1
RLGY.K 0 1 0 0 0 1
RPAI.K 0 1 0 0 0 1
TSM 0 1 0 0 0 1
ASHR.K 0 1 0 1 0 0
Totals 11 22 2 5 12 16

 

It is normal for new signals to diminish as a trend progresses, simply because so many stocks have already triggered. The remaining universe of stocks that have not recently triggered buy signals is shrinking.  It also means that the risk reward ratio is becoming gradually less favorable. Obviously the risk/reward is most favorable in the initial day or two of the upturn.

On the other hand, the number of sell signals, while more than buys, is still low. So there’s no downside thrust. Nothing to get the ball rolling for bears.

These signals ideally have a time horizon of 1-4 weeks.  

The last 4 columns are for the time frame of the support or resistance line around which the signals were triggered.

Ignore the .O and .K These are peculiar to Reuters data. 

I initially screen 9000 NYSE and NADSACS issues for stocks that have been trading more than 1 million shares per day and are trading above $6. There are normally between 30 and 100 results, depending on where we are in the cycle. There are more signals at cyclical turning points and fewer as a move progresses.  

I use these screens to pick stocks for my ready list for my personal trading, and also for my weekly swing trade chart picks for Technical Trader subscribers.

I developed the algorithm to hunt for stocks that looked primed to have a good move, ideally over a period of 4 weeks. In practice they range from 1 week to 7 weeks. I consider the move finished when they break trend support, using the indicators from which the screen program is constructed. 

From the screen output I visually review the charts. I make my picks from that review.

There are usually between 2 and 8 good looking setups every day. The numbers are bigger around intermediate term turning points. 

Here’s a typical chart. I review these daily for my own personal trading candidates, and weekly for inclusion in the Technical Trader newsletter. 

It was one of the sell signals. It’s an interesting setup for a short. Again, this is just an example, not a recommendation.

image.png  lick to enlarge 

 

This Monster is Poised to Explode

Lee Adler

I’ve been publishing The Wall Street Examiner and its predecessor since October 2000. I also publish LiquidityTrader.com, and was lead analyst for Sure Money Investor, of blessed memory. I developed David Stockman's Contra Corner for Mr. Stockman. I’ve had a wide variety of finance related jobs since 1972, including a stint on Wall Street in both sales, analytical, and trading capacities. Prior to starting the Wall Street Examiner I was a commercial real estate appraiser in Florida for 15 years. I was considered an expert in the analysis of failed properties that ended up in the hands of bank REO divisions, the FDIC, and the RTC. Remember those guys? I also worked in the residential mortgage and real estate businesses in parts of the 1970s and 80s. I have been charting stocks and markets and doing analytical work since I was a teenager. I'm not some Ivory Tower academic, Wall Street guy. My perspective comes from having my boots on the ground and in the trenches, as a real estate broker, mortgage broker, trader, account rep, and analyst. I've watched most of the games these Wall Street wiseguys play from right up close. I know the drill from my 55 years of paying attention. And I'm happy to share that experience with you, right here. 

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