Tag Archives: market lab report

Market Lab Report – Premarket Pulse 11/18/15

Major averages reversed course yesterday on higher volume after initially opening up strongly to close near their lows. The S&P 500 came right up against its 200-day moving average which served as resistance, then closed in the lower half of its range. Futures are higher. We have a few new pocket pivots shown below but, as always, when market conditions are tenuous, these names should be added to your watch list, then possibly bought on constructive weakness should the general market continue higher. Meanwhile, some of the stocks in your list of shortable stocks that are setting up may become actionable, especially during days such as yesterday when major averages rose, then reversed course. Provider of Phase I to Phase IV clinical development services for the pharmaceutical and medical device industries INCR had a pocket pivot. Earnings are skyrocketing, institutional sponsorship has grown in all four quarters since the company went public, group rank 96. Semiconductor IDTI had a pocket pivot breakout. Earnings are stellar, pretax margin 26%, group rank 19. Payment processor VNTV had a pocket pivot. In late October, it gapped up on strong earnings. Earnings are accelerating, pretax margin 20%, ROE 44.6%, group rank 29. It may close midbar but the market has been somewhat weak in today’s trade. Staffing company ASGN had a pocket pivot after gapping higher on its prior earnings report. Earnings and sales are accelerating, group rank 24.

Market Lab Report – Important Performance Update 11/17/15

Major averages rose but on lower, below average volume. Both the S&P 500 and NASDAQ Composite Indexes found logical support at their 10-week moving averages after selling off in cascading fashion over the prior three trading days. As institutions scramble to keep up with the major averages, it was not surprising to see big money pour into some of the mega-cap technology names such as FB, NFLX, AMZN, and GOOGL, most of which found support at their 20-day moving averages. Indeed, in this topsy-turvy market, the trend following wizards tracked here http://www.automated-trading-system.com/trend-following-wizards-october-2015/  had another down month, and are down yet again this year. That said, at Virtue of Selfish Investing, 2014 was a banner year as the performance by Gil Morales was a home run, and those members who took profits in context with the chart and cut losses short were also able to also well outperform the major indices. While 2014 was challenging but profitable, trendless 2015 has really tested one’s discipline in following their rules and being nimble. 2015 has been an up year so far for us, but considerably more challenging than 2014. That said, the VIX Volatility Model which is in beta has shown great promise in its profitability in backtests and more recently in real-time trading with the implemented fail-safes, even in this largely trendless year. That said, always remember that the only thing that never changes is change, so always assume markets will always change. Thus, the disclaimer “past performance is no guarantee of future performance” always holds true for any strategy. Static black boxes have a limited life expectancy. Self-learning/self-evolving strategies are essential. Both timing strategies at Virtue of Selfish Investing are self-learning as are our stock trading strategies. What worked before does not necessarily work now. The Market Direction Model adjusted to quantitative easing in 2009 among other things which accounted for its ability to continue to outperform while other timing strategies failed. Indeed most of the market timing websites around back then are now dead links. But as market manipulation by the Fed intensified as central banks began stepping up their quantitative easing programs, markets became the most challenging we have witnessed in decades. In the last few years, when markets looked like they were about to blow apart, they would find a shallow floor and head higher, but weakly so. And when the markets would fall, they would reverse a few weeks of gains in just a few days. Meanwhile, leading stocks would fall even harder than the fast falling market averages. But every problem contains its own solution. We put more focus on how to properly trade individual stocks, Thus the strategy of taking profits when you have them in context with the stock’s chart and the general market has proven profitable. Of course, keeping stops extra tight has also been essential given the behavior of most leading stocks when markets fall. Those very few that buck the trend are a big clue and can sometimes be held. Taking a Zen approach to the markets is the path every trader/investor should take. Trading in the now, in the present moment, and adjusting your trading to what stocks and the general markets are telling you is key to keeping trading strategies profitable. Thus every investor/trader can become a self-learning organism.

Market Lab Report – Premarket Pulse 11/16/15

Major averages fell Friday on higher volume. The S&P 500 broke below a major support point around the 2044 level, and the NASDAQ Composite once again broke below its 200-day moving average. On Friday, another Fed governor said the time for a rate hike is “quickly approaching”. The market seems to be taking issue with this, though historically, markets often correct prior to the first rate hike, then rally after the first rate hike which is considered a bullish event due to a recovering economy. However, this time may be different as economies around the world continue to atrophy. Futures are slightly lower this morning in pre-open trade after dropping sharply yesterday evening. The markets’ muted reaction to the recent Paris and Beirut attacks places the events as unfortunate social upheavals in a long string of such events. With each passing day, the planet grows closer to a significant sociopolitical tipping point. Regardless of how the future unfolds, always keep a close eye on price/volume of stocks and leading indices. Technicals always leave clues shortly before huge declines allowing for safe harbor before the storm.