The market is still in a state of indecision, moving sideways and chopping away at the bulls and bears. I prefer the sidelines during these periods but ended up buying some SLW today since Gold and Silver were moving on higher volume.
If we do get a positive breadth thrust, you can watch these setups from the Post Earnings Surprise watch list for a breakout.
The Post Earnings Surprise watch list contains all stocks with an earnings surprise greater than 50% from the past quarter. To view the full watch list; login into Bluefin and select Post Earnings Surprise from the View Watch List menu.
The Emerging 50 contains stocks in the top sectors trailing the leaders found over in the Sector 50 watch list. To view the full watch list; login into Bluefin and select Emerging 50 from the View Watch List menu. Below are a few setups from tonights' list.
For a short week, we sure are getting thrown around quite a bit. With market breadth readings at extreme levels for the past few weeks, I've been relying on my QQQQ trend indicator to help gauge when to get in and out of the market.
Normally, I look for price to cross over or cross under the 5 day ma paired with a significant breadth thrust in that direction. This move usually confirms a new uptrend or down trend.
The market was looking good a few days ago when we gapped up above the 5 day MA. At the time, breadth seemed weak but it was enough to get things going. Today, we reversed with a bounce off the 20 day MA which is not a promising sign. Volume was higher today compared to the past few days...another ominous sign.
What does this mean? Play it safe, do not take any unnecessary risks and honor your stops. It is possible we work through this over the next few days and head into a end of year rally. The other option is further correction.
The Percolator scan had 77 breakouts today. Retail, Internet, Oil & Gas, Semis and Silver were just a few of the groups moving today. Below are the best setups from today's Percolator Scan.
Volume - Above average volume tells you there is heighten interest in the stock for the day. Compare today's volume against a given time period to see if the stock is up on higher than average volume. Normally, I use a 50 day average volume indicator.
Price - While today’s price matters, it has more meaning in the context of the price action today compared against the past week, month, or year. Depending on how a stock moves today compared against those time periods, you can get a shift of expectations from the market.
Low Float - This is one of the secret ingredients that can propel a stock faster than others. Float is the number of outstanding shares available to the public for trading. Less supply combined with more demand will drive a stock price higher and faster. Why is there more demand? At some point, there is a Shift in Expectations for the stock.
Shift in Expectations - A Shift in Expectations from the market is what drives a stock from a sideways or neglected price pattern to an uptrend. A shift in expectations can occur from news driven events like earnings or simply from the stock making a new high.
For instance, if I’m watching Stock A which has been consolidating for 4 weeks and suddenly it breaks out of that pattern on above average volume, my expectation for that stock has just changed. I’m sure other traders that were watching the stock had a similar shift in expectations.
While there can be news driven events that can cause a Shift in Expectations, the truest indicator is volume and price and how they are acting compared against different time frames.
Price and Volume act as a predictor of increased demand. Many times, price and volume will pick up before the news event occurs. If you’re waiting for a news event you can miss a majority of the move because many times it will be priced into the stock.
A few other items that can cause a Shift in Expectations are earnings guidance, sector strength, or a new ETF coming out around a specific sector (example: Mining and Minerals). The shift can occur from things that seem mundane at first glance, so focusing on the price action of individual stocks can keep you attuned to where the money is flowing.
In the end, the Expectations for a stock are what drive price higher. At some point a shift has occurred where market participants think the stock is worth more than what it was yesterday. Whether their hypothesis is true does not really matter, it is causing more demand for the stock. Things like earnings surprises or guidance can tell us why, but in many cases the moves are more subtle and you have to rely on price and volume for the clues.
When the market takes a breather, I like to review stocks that had explosive runs over the past few months. Normally, I look at the run-up prior to the breakout, how long did the run last, what did the volume look like, was it at highs or lows when it took off, and any other details that might help spot these rockets when they appear in the future.
IPOs are their own type of beast. They tend to trade all over the place, but if you catch one just right, you can smack it out of the park. Below are 4 IPOs that rewarded the bold.
Higher One Holdings, Inc (Public, NYSE:ONE)
Motricity, Inc (Public, NASDAQ:MOTR)
China Real Estate Information Corporation CRIC
BroadSoft Inc (Public, NASDAQ:BSFT)
Bluefin, the stock scaner for working people now has ETFs!
On Friday, we released the ETF strategy section of Bluefin. The purpose of the ETF strategy is to get you in the best performing ETFs as they start their move while also offering additional entry points on the way up.
You can also use this section to see when the market is moving out of different groups. For instance, Thursday we had many Emerging Market ETFs appearing in this grid. The next day, China closed down 5%. Just another tool to help with your situtational awareness.
I've been working on cleaning up the Stock Finder scripts and updating everything with the most recent versions of the Bluefin breakouts. You can download the file by clicking "Share" from the top menu and select "Browse other users shared files". The layout is named "Patientfisherman_Signals".
ETFs Entry and Exits are now in Bluefin. Using the StockBee trend intensity formula we rank all ETFs by trend strength. When then use a time based rank combined with the trend intensity rank to find all ETFs with a new buy signal, currently in a buy signal and an exit signal. We will provide more details on how this is calculated on the StockBee member site and on the Bluefin ETF page.
Trend Intensity is a measure of velocity an ETF. Trend intensity not only finds a trending ETF but also finds an ETF which is trending with higher velocity. Higher the trend intensity number, the faster is the ETF is moving up.
The ETF Screen is split into 3 sections.
- New Entry Signals - Leveraged and Non-Leveraged ETFs ranked by Trend Intensity with an ETF Buy Signal.
- Existing Entry Signals - Leveraged and Non-Leveraged ETFs ranked by Trend Intensity that are currently in a Buy signal.
- Exit Signals - All ETFs: ETFs with an exit signal.
With some pre-planning on your part, you can automate your daily trading activities. With most online brokerages, you can find some type of trigger event that you can apply to an individual stock. Trade triggers allow you to set entry and exit alerts based on one or a set of conditions.
To do this, you need to schedule some time nightly for review of setups from the Bluefin watch lists. I recommend focusing on Sector 50 and Emerging 50.
One example, you spotted GGAL in the Emerging 50 list on October 15, 2010. It had a nice multi-week consolidation with tight trading action.
Let’s say you wanted to schedule a trigger to email you when the stock trades above 10.70. Let’s use Ameritrade Trade Triggers for the demonstration.
First, go to the “Trade”Menu and Select “Trade Triggers” over to the right.
The Trade Triggers Entry form will appear. This is where you enter the conditions for your alert.
This trigger will be for a stock, click the “Stock” radio button. Normally, this is the default setting. Next, enter your symbol and then the Condition. I typically use “Last” versus “Bid” or “Ask”. Last is the last amount that the stock traded. Operators allow you to set when the trigger occurs on the selected Condition. In this case, I’ve selected “Greater than or equal to”. Finally, our entry point of 10.70 is entered in the “Amount” field. Now we have our condition defined for the alert. When the stock trades at or above 10.70 we want some event to occur.
Our event can be: Trigger a Stock Order, Trigger an Option Order, or Trigger an Alert. I typically use “Trigger an Alert”. Why? If you have several of these setup and you have a big thrust day it is possible all 5, 10, 20 triggers will execute your buy orders. Let’s just say, you can use up your daily day trading margin balance really quick!
With the email option, you will receive a notification in your email alerting you that your stock just hit your buy amount. When time permits, you can then check out the stock and make the decision to enter or not enter.
I like this flexibility but some people might like the more automated option "Trigger a Stock Order" removing them from the decision process.
After selecting “Trigger an Alert”, click the drop down menu under “Send an email notification to” and select your email address.
Then, pick a date for the trigger to expire. I use a 5 day expiration. You will receive an email when the trigger expires.
Finally, click “Submit Trigger” and you are set. You can run through this process and configure your stocks to trigger a stop alert as well.
For many people, it comes down to organizing around their time. If you normally have five to ten minutes free several times a day, you can schedule check-in times where you run through the stocks in Bluefin and make your purchases. My check in times are around 10 EST, 2 EST, and 3:55 EST.
If your schedule is less predictable or access is limited you need to use something like trade triggers to notify you. In the evenings, allocate time to review stocks and figure out your entry and stops. Then, it is a matter of entering the trade order when the event does trigger.
In the end, it’s about organizing around your time and committing to a daily routine to make it happen.
Looking at the sector 50, you can sort by percent change to see the sectors getting the smack down and the sectors taking off on any given day. Today, it was apparent that Metals and Mining took a digger.
Below are the hardest hit stocks from those sectors. Check out the price reversals on above average volume. Profit targets would of been a better way to manage these stocks versus some type of exit using moving averages or multi-day low. Looks like permanent damage was done, but you never know with this market.
Alexco Resource Corp. (USA) (Public, AMEX:AXU)
Endeavour Silver Corp. (CAN) (Public, AMEX:EXK)
General Moly, Inc. (Public, AMEX:GMO)
Hecla Mining Company (Public, NYSE:HL)
Silver Wheaton Corp. (USA) (Public, NYSE:SLW)
Uranium Energy Corp. (Public, AMEX:UEC)
Uranerz Energy Corp. (Public, AMEX:URZ)
In short, Market Breadth Indicators tell us the underlying strength of the market or any given index. Stockcharts.com describes the Bullish Percent Index as:
The Bullish Percent Index (BPI) is a breadth indicator based on the number of stocks on Point & Figure buy signals within an index. Because a stock is either on a P&F buy or sell signal, there is no ambiguity when it comes to P&F charts. This makes BPI a straightforward indicator with clearly defined signals.
Basically, you are watching for the daily index line to cross over or cross under the 10 day moving average. When the you get a cross above, you would move in to the market, cross under you move back into cash.
You can watch the indicator for all of the major indexes:
$BPCOMPQ - Nasdaq
$BPNYA - NYSE
$BPSPX - S&P 500
$BPINDU - Dow
|Sony Corporation (ADR)||SNE||517|
|Melco Crown Entertainment|
|Acorda Therapeutics Inc.||ACOR||358|
|LSI Industries, Inc.||LYTS||350|
|AirMedia Group Inc. (ADR)||AMCN||300|
|W&T Offshore, Inc.||WTI||291|
|Titan International, Inc.||TWI||267|
|Mercury Computer Systems|
|Fuel Tech Inc.||FTEK||200|
|Callidus Software Inc.||CALD||150|
|JMP Group Inc.||JMP||143|
|Caliper Life Sciences|
|Limelight Networks, Inc.||LLNW||100|
|Town Sports International|
|VASCO Data Security|
|Avid Technology, Inc.||AVID||100|
|Guidance Software, Inc.||GUID||100|
|QLT Inc. (USA)||QLTI||86|
|JinkoSolar Holding Co.,|
|Isilon Systems, Inc.||ISLN||80|
|The Medicines Company||MDCO||79|
|3D Systems Corporation||TDSC||77|
|Green Plains Renewable|
|Electronics For Imaging,|
|Great Wolf Resorts, Inc.||WOLF||70|
|MIPS Technologies, Inc.||MIPS||70|
|Orbitz Worldwide, Inc.||OWW||67|
|Obagi Medical Products,|
|HORSEHEAD HOLDING CORP.||ZINC||67|
|Madison Square Garden,|
|Hill International Inc.||HIL||62|
|Intrepid Potash, Inc.||IPI||60|
|OPNET Technologies, Inc.||OPNT||60|
|Bronco Drilling Company,|
|Internet Brands, Inc.||INET||57|
|Allied World Assurance|
|Monotype Imaging Holdings|
|Web.com Group, Inc.||WWWW||54|
|TTM Technologies, Inc.||TTMI||54|
|Digital River, Inc.||DRIV||54|
|Hawaiian Holdings, Inc.||HA||53|
|ExlService Holdings, Inc.||EXLS||53|
|Air Methods Corporation||AIRM||51|
|Hyatt Hotels Corporation||H||50|
|NewStar Financial, Inc.||NEWS||50|
|Rush Enterprises, Inc.||RUSHA||50|
|M/I Homes, Inc.||MHO||50|
|DICE HOLDINGS, INC.||DHX||50|
|The Knot, Inc.||KNOT||50|
|PowerSecure International, Inc.||POWR||50|
|GSI Technology, Inc.||GSIT||50|
|SPS Commerce, Inc.||SPSC||50|
|JinkoSolar Holding Co.,|
|SPS Commerce, Inc.||SPSC||50|
|Hyatt Hotels Corporation||H||50|
|Noranda Aluminum Holding|
|Addus Homecare Corporation||ADUS||27|
|CBOE Holdings, Inc||CBOE||18|
|Alimera Sciences Inc||ALIM||17|
|KAR Auction Services Inc||KAR||12|
|Verisk Analytics, Inc.||VRSK||6|
|PAA Natural Gas Storage,|
|Charm Communications Inc||CHRM||4|
|Generac Holdings Inc.||GNRC||4|
We do not have the ability to react to market conditions and the individual stock movements. I’m going to tell you a secret; this actually can work to your benefit. Baby sitting stocks can lead to over trading and lost gains.
One of the most popular questions is how to manage stocks during the day while competently performing your job. I will begin highlighting some tools and features I use to help manage stocks during my daily routine. Hopefully, they will help you keep on top of the market and your job.
Within a 30 minute period today, I went from all cash to all in. I have to admit, for a few hours there, I was sweating it, but the market recovered from the lows of the day and we had some very nice breakouts. Below are the best breakouts from the Percolator scan.
Stocks in this Post:
Puda Coal, Inc PUDA
LJ International, Inc. JADE (Current Position)
Web.com Group, Inc. WWWW
Trimble Navigation Limited TRMB
Travelzoo Inc. TZOO
Cardtronics, Inc. CATM
Plantronics, Inc. PLT
Limelight Networks, Inc. LLNW
F5 Networks, Inc. FFIV (Current Position)
Amazon.com, Inc. AMZN
GT Solar International, Inc. SOLR
Lindsay Corporation LNN