Monday, June 13, 2016

Short-Term Trend Fading - Protecting Profits

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Life has taken over and the newsletter is on the back burner.  My family and I are headed to Indianapolis near the end of this week to cheer my oldest son on at Olympic Trials, starting on the 20th, so there is little chance of it being updated before the end of the month.

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Market Overview

Short-term:  downtrend intact
Intermediate:  has already transitioned to cash signal; downtrend prevalent
Long:  uptrend intact


With the short- and intermediate-termed trends weakening this is not a good time to buy stocks en masse.  I intend to only buy those stocks that are breaking out on volume.

LCR Table

Underlying the weakness is a two-day sell-off in stocks:

Click on the table to enlarge.

This table has been discussed at length in previous blogs and in my newsletter so refer to past entries for details.  Suffice to say, the right side shows solid weakness, and this is starting to creep into the left side, which some of you will recognize as bad news on a short-term basis.

Whether we have a buying opportunity is anybody's guess.  Your crystal ball is as good as mine.

Astute followers of the blog will recognize that the left side is almost to a transition stage -- if Monday, June 13th is a down day AND stocks (internally) sell off in their rating (increase of "cash" rated stocks relative to "long" rated), then we will have a short-term confirmation of the downtrend.

Cumulative Tick

I'm watching the CT closely:

Click on the image to enlarge.

There was not much progress for the week, so Friday's selling action was significant.  The instantaneous CT (white) is just above the longest moving average (red), and if it crosses the red from above, we could have the start of a downtrend across all measured time frames.  This being stated, the end-of-month window dressing for funds and pending earnings season will most likely temper any major drop.

If the CT crosses red from above I will post via Twitter at Grems8544.

Holdings

Most of my holdings are doing well:

Click on the image to enlarge.

The top plot area is a composite of my holdings (blue) and the S&P 500 ($SPX), as of the last 30 days.  The $SPX is up less than 2 % and the holdings list is around +7%.  My actual mileage is a bit less because a few stocks were unloaded over the past week.

The middle plot area shows daily prices as well as the 21d EMA, 50d MA, and the 200d MA.  All are in an uptrend and all are doing well.  No broad sell signals for my portfolio until I cannot maintain a level above the 21d EMA (in composite).

The area below the daily prices is slope of the 21d EMA, smoothed to a 4d level.  It is positive (good), and it has a value of 2.4-ish.  On a daily basis this is a 0.3% growth so the longer-term expectation is positive growth this this existing portfolio.

The bottom plot shows that volume is drying up with this recent downturn.  I'm not overly worried about the pullback, but it will be isolated to specific stocks.  For *my* portfolio, I still feel in good shape.

Leader's List Performance

Looking forward for the week, the  relative performance of the Leader's List is as follows:

Click on the list to enlarge.

Uptrends are intact.  For the symbol list of stocks that comprise the Leader's List, you must subscribe to my Dropbox folder.  Instructions below.

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Stock updates are posted in a daily file that I attempt to share by the following morning with all subscribers. To review the stocks that you are holding and see how I evaluate them, you need to be a member of my Dropbox.  Send an email to GreekGodTrading [ a t ] gmail {d o t] com, making the appropriate changes to the email address, with the word "DROPBOX" in the subject and I'll add your email.  I also ask that you subscribe to this list using the link to the left (if you are on the blog), as it's the only way I can communicate with Dropbox users, if the need arises.

Here's how to find me:

InvestFeed/Twitter:  grems8544

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As with all my ramblings, you are responsible for your own investment decisions and I am not.  Please do your own diligence, and please take ownership for your actions.  The stocks I have listed here (if I have listed any) are not recommendations -- they are seeds for you to do your own research.

Regards,

pgd

Tuesday, May 31, 2016

May 28th Weekend Review

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My latest newsletter is at this link:  https://goo.gl/i2kXXf 

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Outlook: new up trend, weak volume
Short-term:  Bullish
Intermediate-term:  Bullish
Long-term:  Bullish

Overall:  we are in an uptrend, although I would not be surprised at a slight pullback and dip.
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LCR Table

Click on the image to enlarge.

Friday marks the 3rd day of a new uptrend.  If you look at the image above, and look at previous blogs where I have provided "the ideal setup", you see that the positive movement of the 8d slope (it has a heavy dark set of lines around it on the table above) has been green for the past 3 days.

We are in good shape for remaining "long" as long as the green keeps increasing on the middle/left side of the table.

Cumulative Tick

Click on the image to enlarge.

Thursday and Friday saw weak but continued buying on the NYSE.  I've covered the plot above extensively in this blog and my newsletters -- suffice to say everything here is bullish.

Strategy

I'm presently holding the following across 3 TradeStation accounts:


All stock positions are above their 21d EMA so are "safe" for Monday's action.

I may Buy-to-Close (BTC) the INTU PUT if my Open P/L goes above 80%, just to capture the premium.  In general this applies to any of the PUT positions, since we are more than two weeks out from expiration.

As far as new purchases are concerned, I am looking to enter new positions in stocks with both volume and price breakout action.  I have linked automated alerts to my Twitter account -- grems8544 -- and if you notify your phone or email on my tweet you'll see the alert roughly at the same time I do.  Use this as a proxy for my cell phone/email notification service which is presently filled.  Here's what it looks like for a Price-Volume Break Out:

This was the alert sent out just before the close on Friday.  Here is how to break this down:

  • UBSH -- the symbol of the equity of interest
  • !BO -- the alert strategy name, in this case, Price-Volume BreakOut
  • 27.32 >= PrevHi 27.08 -- I require that today's price be greater than the previous close.
  • 0.14MM shares -- the stock is projected to trade at least 140,000 shares.  If this occurs late in the day, then there is a great chance of it being true.  If it occurs early in the morning, it needs to be watched.  This uses a complex algorithm to project the day's volume based on the early volume action. 
  • / 106% is the amount of projected volume above the highest volume level, of the previous 10 down days (not previous 10 days, they have to be DOWN days).  We want buying volume to be larger than the greatest short-term selling volume.
  • 5/27/2016 4:00:08 PM -- the signal occurred at the close (rare, but it does happen -- obviously).
My typical approach is to enter a smaller, say 10 or 20% position when the signal fires, and if the stock gains and looks constructive on a chart, then I add to it.

As far as selling, this rule uses the 2x21d close as well as GGT "Sell" (aka "Cash") methods.

This next display shows the leaders from last week who fired alerts, just so you can see history:


Click on the image to enlarge.

The days are most recent (left) to oldest (right).  If you choose to backtest this method, use an entry price that is 1.001 x the previous day's high for entry, which would have been the alert price.  If a "1" appears then the volume was larger than any previous 10 down-day volumes.

I will also be buying from a different strategy, and may/may not alert you to all my purchases.  Some of this is manual, some of it automatic.  I have no issues with you seeing my automated trades and alerts.


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As with all my ramblings, you are responsible for your own investment decisions and I am not.  Please do your own diligence, and please take ownership for your actions.  The stocks I have listed here are not recommendations -- they are seeds for you to do your own research.

Regards,

pgd


Regards,




Wednesday, May 25, 2016

Significant Up Day - May 24th Close

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Outlook: short-term improving, prone to failure

Short-term:  Continued "up" progress.  Completed Day 3, depending on how you count.
Intermediate-term:  New Up Trend
Long-term:  Uptrend intact but not accelerating upward

The weekly trends are down OR MIXED up/down in all the major indices.  The NAS and Russell 2000 *just* went to mixed mode.

The daily trends are all newly up.

When the longer-termed trends are opposing (or at least not fully confirming) the daily trends, being fully invested in the markets simply is risky.  New entries are prone to failure.

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Newsletter sent out to subscribers.  The latest version is at this link:  https://goo.gl/i2kXXf 

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Long-Cash Ratio Table

I discuss this table in detail in my latest newsletter.

Click on the image to enlarge.

From left to right, this is what I see:
  1. The LCR has moved +22% upwards on a day-over-day comparison.  This is the 195th strongest up day in almost 2000 observations, placing it in the upper 10% of all up days.  Given where it occurs (after a significant down period), I'm paying attention to the long side of the market.
  2. The 2d, 3d, and 5d slopes are positive and pointing upwards.  The 8d almost made it -- and as many of you are aware, this is my trigger for broad entry into the markets.  I saw this coming with the number of alerts that were sent out yesterday and started acquiring positions throughout the day.
  3. On the right, we have had 3 solid days of upward acceleration.  The right side looks really good.
Although we certainly can fail from here, I am buying positions from my Leaders list.  My dividend portfolio is getting leading stocks that pay a dividend.

Strategy

I intend to deploy capital.  I sold a few puts yesterday, as well as entering a few stock positions:


The stocks that I sold puts fired price/volume alerts so I expect that they will move up, away from my strikes.

I provide a completely updated list of Leaders in the daily GGT stock file, which is in the shared Dropbox folder.  Instructions to join (it is free) are in the newsletter as well as at the end of this entry.

The following Leaders fired price and volume alerts during the trading day on Tuesday:

FIZZ
ORBK

The following Greenfield stocks, which also includes those that pay a dividend and are part of my dividend portfolio, also fired price and volume alerts.

CEVA
CHKP
CTXS
EBSB
MKTX
PPBI
PRI
REXR
SPGI
VEEV
WAL

Not all pay a dividend so do your own diligence please.

Group behavior of my Greenfield Leaders list is noteworthy and continues to outperform the S&P500:

Click on the image to enlarge.

From top to bottom, this is what you are looking at:
  1. The top pane shows the S&P 500 (green) and the group behavior of the Leaders list (blue).  The S&P 500 has fallen about -2% or so over the past month; the Leaders list, in hindsight, as grown a large amount.
  2. The middle pane shows the daily price series of the Leaders list.  The green line is the 21d EMA, the yellow line the 50d EMA, and the red line the 200d EMA.
  3. The bottom pane shows volume and the 50d MA on volume.
As Mark Minervini says "If you want alpha in your portfolio, then you had best buy alpha."  I believe that my Leaders list represents alpha.

I will continue to add to my portfolios today using price and projected volume alerts.

I note that we are at a critical failure point -- we are early in a newly emerging trend.  The stocks I am invested in and am considering could easily move against me, so it is important that I review my holdings and potential new purchases every evening.  You should consider doing the same thing -- turning points can be dangerous to our portfolios.

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As with all my ramblings, you are responsible for your own investment decisions and I am not.  Please do your own diligence, and please take ownership for your actions.  The stocks I have listed here are not recommendations -- they are seeds for you to do your own research.

Regards,

pgd


Tuesday, May 24, 2016

Continued Long-Side Progress - May 23 Close

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Outlook: short-term improving, prone to failure

Short-term:  bottoming characteristics are visible
Intermediate-term:  downtrend
Long-term:  Uptrend, but weakening

The weekly trends are down in all the major indices.

The daily trends are mixed.

When the longer-termed trends are opposing the daily trends, being fully invested in the markets simply is risky.  New entries are prone to failure.

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Cumulative Tick

Buying continued on the NYSE on Monday:

Click on the image to enlarge.

We are back above the solid red line, indicating that buying has dominated the past couple of days.  Taken in isolation, with more 52-week highs (green) than 52-week lows (red, top trace), we should be considering the long side of the market.

Long-Cash Ratio Table

The LCR Table continues to improve and we are closer to an entry signal:

Click on the image to enlarge.

The left/middle shows that the slope of the shortest measured period is positive.  This is a move in the right direction.

The right side shows that we have had two full days of the market slowing the descent -- this too is indicative of bottoming action.

While it is too early to call a short-term bottom, the current behavior is good and opens the door to enter positions on strength.

To recap the "ideal" setup, I am looking for the following LCR Table presentation:

Click on the image to enlarge.

Note that the 8d slope, on the left, is just transitioning positive (the move from red to green).  Historically, this has been a good entry signal, especially with the right side all green (acceleration to the upside).  We are not there yet, but it would be prudent to get shopping lists ready.

Strategy

Given that we are prone to failure at turning points, I'm launching a few trial balloons with tight stops.  I will require that these positions move higher on projected volume before I enter.

These are Greenfield Leader stocks.

All of these stocks are in a weekly uptrend and are in some form of "GGT Long" status:

TLK
WBMD
ORBK
GLOB
FIZZ
MITK
TTS
ENZ
FIVN
PLPM
TRUP

My entry points are as described in my newsletter.  Not only must the stock take out the entry buy-stop, but it must do it on projected volume.  This volume-price requirement will significantly reduce risk.

My end-of-day stops are as follows:

*TLK will be in trouble below 54.55
*WBMD has a stop of 63.30
*ORBK 25.17
*GLOB 36.49
*FIZZ 51.13
*MITK 8.57
*TTS 17.39
ENZ 6.10
FIVN 9.40
PLPM 4.12
TRUP  14.53

* indicates stocks with extremely favorable Effective Volume characteristics.

As always, none of these stocks should be considered recommendations to buy.  I am presenting my work for your continued research and diligence.

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Newsletter

I have finished the most recent copy of the newsletter and will send out today (Tuesday).  I simply need to proofread.

If you want to be on the newsletter distribution, then please send an email to GreekGodTrading [ a t ] gmail {d o t] com, making the appropriate changes to the email address, with the word "NEWSLETTER" in the subject and I'll add your email.

As stated above, the most recent edition (early May) is here:  goo.gl/e75Ayj

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As with all my ramblings, you are responsible for your own investment decisions and I am not.  Please do your own diligence, and please take ownership for your actions.  The stocks I have listed here are not recommendations -- they are seeds for you to do your own research.

Regards,

pgd

Monday, May 23, 2016

The Earliest of Early Signals to Enter Long

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Outlook: short-term improving

Short-term:  bottoming characteristics are visible
Intermediate-term:  downtrend
Long-term:  Uptrend, but weakening

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Cumulative Tick

Click on the image to enlarge.

Previous blog entries, as well as my latest newsletter(s), discuss the Cumulative Tick presentation.  Here is our current state:

1) the number of new 52-week highs and new 52-week lows are more/less equal.  This is to be expected as we move south, and although Friday was a "strong(er)" day, we are at the bottom of the range so I would expect that these two metrics would be at parity.  This indicator needs to improve with the number of 52-week new highs (green) significantly outpacing 52-week new lows (red).

2) The markets started buying right out of the starting blocks on Friday and sustained buying all day.  The rate was constant and cumulative.  This is a good sign (middle plot)

3) The instantaneous cumulative tick (white) has pulled above all moving averages and is above the slowest one (solid red line).  This is significant and the indicator has been tuned over years of use.  When we cross the red line from below we have met a significant criteria -- now we need the markets to follow through and maintain the upward trajectory.  If we continue to meander horizontally it will not be good for buying stocks; we need continued strength.

I will post a Cumulative Tick update via Investfeed or Twitter if I see something significant.  For now, note that we have the short-term makings of a recovery, but of course, your crystal ball is as good as mine.  We are very, very early in this, and I expect the short-term recovery will fail again before it advances.

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Long-Cash Ratio Table

Click on the image to enlarge.

Long-term readers will take a glance at the table and know we are not in a buying position for Monday, May 23rd.

The Long-Cash Ratio (LCR) is constructed by individually ranking over 3000 stocks in terms of historical outperformance and assigning a "long" or "cash" moniker to each.  Take the ratio of the two values (long divided by cash), apply moving averages, and look at the slope of the moving averages and you get a sense of how the table functions.  The left/center shows slope; the right/center shows "slope of the slope", or rate of change.

The far right shows a new indicator for publication -- simply a composite to get an idea of price trend, slope trend, and overall table trend.

  • The far LEFT shows the raw LCR.  It moved up +5% from Thursday's value and is now at 0.629.  For every 1000 stocks in the database, only 629 are long.  This is a snapshot in time and does not tell us which direction we are going, but it does help us understand where we are.
  • The left/middle is the slope area, and it is a sea of red.  All the slopes are pointing downward, which is indicative of falling stock prices across the board.  I do not advocate buying stocks when I see this type of presentation, except for Leaders.
  • The right/middle is the slope-of-the-slope area, and Friday was an up day, relative to Thursday.  This is the first step of a bottom being formed, and seeing it across all measured time frames is good.  We need more of this in order to turn the LEFT side of the table green.
The new presentation on the far right simply shows that we have positive movement in price trend AND some improvement in slope and the overall table.  We are not out of the woods yet.  I have highlighted recent periods in the past where this same presentation has failed ( "F" ), so beware.  

I believe that entering stocks right now, except for leading stocks, would be a mistake, at least on a short-term basis.  If your holding period is longer then I do believe it is time to get shopping lists ready.

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Percent Longs

Click on the image to enlarge.

This table is another view of the LCR, but shows the percentage of stocks that are "long" rated.  On the far right we are "in the green", so we are in a historically favorable area for buying, as far as statistics are concerned.  The number of observations is nearly 2000 so the indicator is significant.

Note that we are on the LEFT side of entering the green zone -- we need to make a turn and play around in this area before we get a rapid and sustained movement to the upside.  We are early and this is why I do not advocate buying stocks right now.  Nevertheless, we typically move higher once the turn starts, so I watch this indicator closely.

----> In the end, of the three figures, the LCR Table is the most powerful predictor for knowing when to enter the markets.


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All this being stated, there are stocks that I am watching for possible continued movement to the upside, independent of the broader market.  Remember, leaders LEAD:

ORBK
PLPM
WBMD

AOS
BR
OC
EBS
FRC
SYK

BSBR
CORE
FIVN
TRUP
PRMW

GPN
ISRG
SYK
CBSH
ORI

Here is the group performance, relative to the S&P500:


Click on the image to enlarge.

The upward-pointing blue line shows that this batch of stocks is worthy of further consideration in this market.  Whether they continue their upward march is anybody's guess -- it is important to have stop criteria in place if you invest counter-trend.

As always, none of these stocks should be considered recommendations to buy.  I am presenting my work for your continued research and diligence.

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Newsletter:

I intend to finish the most recent edition later today (Monday) and will email to registered subscribers.

I will be going into some depth on what makes a "Leader" and how I select them.  You'll probably want to register for the letter -- just sayin'.

If you want to be on the newsletter distribution, then please send an email to GreekGodTrading [ a t ] gmail {d o t] com, making the appropriate changes to the email address, with the word "NEWSLETTER" in the subject and I'll add your email.

As stated above, the most recent edition is here:  goo.gl/e75Ayj

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As with all my ramblings, you are responsible for your own investment decisions and I am not.  Please do your own diligence, and please take ownership for your actions.  The stocks I have listed here are not recommendations -- they are seeds for you to do your own research.

Regards,

pgd


Friday, May 20, 2016

Ignore the Bounce and Start a 3-day Weekend

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Outlook: (unchanged from Thursday)

Short-term:  markets are in a downtrend
Intermediate-term:  downtrend
Long-term:  Uptrend, but weakening

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Cumulative Tick


Click on the image to enlarge

1) New 52-week lows DOMINATED new 52-week highs --> Do not buy stocks in this climate.
2) The overarching theme on the Cumulative Tick chart is that more stocks are being sold over a 1 day, 2 day, and into a 3 day period.  Until we see the white line above the red line, I'm on the sidelines for my intermediate and long-term stock selections.

Starting my 3-day weekend early.


Stocks that go out through my text alerting service are all Greenfield stocks but I do not advocate any purchases on an extended basis.  We have not established a floor.

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Newsletter:

I intend to finish the most recent edition this weekend and will email to registered subscribers.

If you want to be on the newsletter distribution, then please send an email to GreekGodTrading [ a t ] gmail {d o t] com, making the appropriate changes to the email address, with the word "NEWSLETTER" in the subject and I'll add your email.

As stated above, the most recent edition is here:  goo.gl/e75Ayj

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Twitter:

I've become more active on Twitter.  Find me at grems8544

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As with all my ramblings, you are responsible for your own investment decisions and I am not.  Please do your own diligence, and please take ownership for your actions.  The stocks I have listed here are not recommendations -- they are seeds for you to do your own research.

Regards,

pgd

Thursday, May 19, 2016

Pay Attention to the Leaders

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Outlook:

Short-term:  markets are in a downtrend
Intermediate-term:  downtrend
Long-term:  Uptrend, but weakening

Long-Cash Ratio:

Click on the image to enlarge.

The very left shows a falling LCR:  more stocks are eroding in price than are gaining.  This is the "falling knife".

The middle/left shows a sea of red.  Every moving average, each with a unique measurement timeframe, is pointing downward.  Do not buy stocks, on a day-over-day basis, when this is happening.

The right side shows some green but it is not across the board.  The falling moving averages (middle/left) are starting to "slow" in their rates of descent, which is a necessary step to identifying a turning point.  We are not there as of Wednesday's close, so Thursday is an easy day:  no stock buying.

Cumulative Tick:

Click on the image to enlarge.

The top shows that the number of stocks making new 52-week highs (green) is nearly equivalent to those making new 52-week lows.  Not a good buying climate.

The middle trace shows the impact of the FOMC minutes -- coasting/flat for the majority of the day, then sustained selling by algorithms as the market digested the minutes.  Interesting to me that the market starting sustained BUYING at exactly 1:00 p/ET and then SELLING at exactly 2:00 p/ET.  I re-iterate that the period between 11 a/ET and 2-ish is a dangerous period to buy (or sell) stocks.

The bottom trace is the money shot.  The cumulative tick war has been lost on a short-term basis, and now with the real-time CT line (bold white) below the solid red line all moving averages will start sloping downward.   I do not buy stocks when this is the situation, and I strongly urge you to reconsider entry to stocks for ANY time frame when this is the case.  The risk/reward simply is not there.

Leader's List

The list is getting thinner due to the recent market turndown.

The following stocks continue to exhibit strength despite the market conditions:

NCS
PATK
PLPM
STS
TTS
WBMD

Under no circumstances am I advocating that these stocks be bought.  These are "teaching stocks" -- you need to understand why these are leaders.

Click on the image to enlarge.

Frequent readers of this blog will see a common display on the left -- my "Greenfield" display.  I've written extensively about this and my most recent newsletter has details of the fields (near the back of the newsletter).  Get a free copy here:  goo.gl/e75Ayj 

The right side is new for readers, not-so-much for me.  The far right shows a leader's list and WEEKLY trend performance. The "-1d()" columns contain data from Tuesday, and the "Today()" column contains data from Wednesday.  Two "-1d()/Today()" pairs exist because I use confirming methods to look at the individual trend of the stock.

On the far right, I've circled a "Down/Up" indicator transition.  One exists for PLPM and the other for WBMD.  These stocks are just confirming, within the last week, that they are in an up trend on a weekly perspective.

You can see that on the left many stocks are in a downtrend on a day-over-day basis -- this is indicated by the red "Down".  The natural conclusion is that if this continues for these stocks that the weekly trend will be under attack -- this is the correct conclusion so it is prudent to stay away from these specific stocks.  Despite this observation, some of the leading stocks are working within this market.

As an example of this, PLPM is showing "Up" on a daily evaluation -- it is holding up well in this market on both a daily and weekly basis.  Here is what it looks like in a familiar candlestick chart:

Click on the image to enlarge

The two plots on the left are WEEKLY; the two plots on the right are DAILY.  The top two plots use the same method to look at trend (Method 1), and the bottom two plots use the same method but different from the top (Method 2).

You can see in the upper left that PLPM is transitioning to "Up" on a weekly basis.  You can see on the upper right (daily basis) that it has been moving upward for the past 3 days, and my trend indicator shows that it picked up on the daily trend change 5 days ago.

The bottom two plots (Method 2) both show that the weekly and daily "Up" trends are intact.

Again, I must caution, this is not a recommendation to enter PLPM or any of these stocks.  The market is in a downtrend.  The purpose here is to show you that my leading stocks are doing well in this climate and when I say "Leading" you have a good idea of what this means.

For those of you with itchy fingers, take a really close look at PATK.  The following multi-period quad chart is provided without commentary, for your review and learning:

Click on the image to enlarge

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Newsletter:

I received a couple of notes from folks asking when my next newsletter is going to be distributed.  Soon.  I intend to finish the most recent edition this weekend and will email to registered subscribers.  A combination of work, home-life, and focusing on streamlining/communicating market trends has prevented me from completing the most recent edition.

If you want to be on the newsletter distribution, then please send an email to GreekGodTrading [ a t ] gmail {d o t] com, making the appropriate changes to the email address, with the word "NEWSLETTER" in the subject and I'll add your email.

As stated above, the most recent edition is here:  goo.gl/e75Ayj 

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Twitter:

I've become more active on Twitter.  Find me at grems8544

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As with all my ramblings, you are responsible for your own investment decisions and I am not.  Please do your own diligence, and please take ownership for your actions.  The stocks I have listed here are not recommendations -- they are seeds for you to do your own research.

Regards,

pgd