Trade Anatomy Portfolio
+1.24% Sept. Month End | +32.27% YTD
0 long | 0 buys | 1 sell
This week started out under pressure and looked as though we would be in for a doozy on the downside. Then came Carl Icahn with his doomsday video, and that afternoon, I heard the first "market crash protection" commercial on the radio. Typically when these events start occurring, a relief rally is in order, and that's what upfolded. I still wonder why this time around, Carl is looking out for the little guy, but somehow forgot to warn everyone during 2008. The reality is you don't need Carl or the infomercial guy to tell you what is occurring in the current market environment. You just need to understand price and how it contributes to pattern setups. This last week relieved a bit of pressure, and there was a minor jump in the number of stocks passing the screening process, but not enough to warrant taking positions.
You can see from the chart above that last week was a nice reversal week, moving down to the low of the main trend line then bouncing and closing on the high Friday. We don't necessarily need the yellow line to turn up to take new trades, but wind in our sails is always helpful. Many times the best stocks will form constructive weekly patterns a few weeks prior to the overall market establishing a new upward trend. The current trend is still downward.
LGIH was removed from the portfolio on Sept. 28th at 26.35. The initial trade was established on Aug. 5th at 20.17. Position size was 7.58% of capital with .50% used as our risk percentage for LGIH. The end result was a +2.32% increase to our portfolio value.
As I mentioned in the commentary section, there has been some mild improvement in the number stocks passing the screening process. Currently there are 15 names on the list, several of which are near a breakout point. Below are a few daily charts for review.