Weekend Review and Update

Portfolio Allocation

Trade Anatomy Performance

+3.30% MTD | +30.54% YTD

Position Summary

3 long | 0 buys | 3 sells

Watchlist Summary

9 candidates

 

Commentary

The overall market had quite a week from start to finish.  I guess if we all used weekly lines charts and only took a gander after the close each Friday, we'd be wondering why all the commotion.  However, the vast majority of traders tend to use daily bar or candle charts which displayed the full market move in all it's glory.  Last week also left the vast majority of stocks with an ugly scar that I'm not sure will turn into a beauty mark. The question now arises as to what to do next.  The simplest answer is to now wait.  Wait for weekly setups to show some life again and have patience for the market to work back and forth for a time being.  In essence, keep your powder dry until the probabilities and volatility are best for trading.  You'll know when the time is right because your stock screens will begin to populate to a healthy number and weekly setups will be abundant.

Trade Summary

We sold AAOI at 19.32, ABTL at 17.48, and ACLS at 3.14 this week.  All three were removed for losses ranging from -5.41% to -4.56%.  The total net effect on our portfolio value was -.70%.  Below are the three charts posted to members the day they were sold.

When the market makes a move similar to Monday, it's necessary to tighten your stops.  Every position which we owned, opened lower on the day, but was still trading near or slightly above their mid-level stop.  Generally during traditional market corrections, it's practical to adhere to a more distant stop because your stronger stocks can generally make it through the correction without hitting your close out price.  However, the market characteristics as of late lend itself to much tighter stops on any open positions.  

Position Summary

We are currently long only have three positions, EFOI, LGIH, and CCS.  All three have remained very constructive in nature with two moving to new highs by the end of Friday.  The reason for our portfolio gain can be directly attributed to EFOI.  Since the position was first initiated, it has now appreciated in value by 96%.  At a 6% position, it has added nearly 3% to our bottom line for the month.  Below are the charts of the current positions.

Watchlist Summary

There's very little to discuss in terms of actual names on the list.  Currently there are only a handful of names remaining.  What I would like to point out is how the list will ebb and flow based on market trend.  When market's enter negative price trends such as the last few weeks, our list virtually vanishes.  There are currently 115 names that meet the screen criteria.  During healthy markets 300-550 would be more common.   Another quick note is that the list tends to slowly deteriorate during market tops.  This time was no different!  As the market rounded out it's top over several months, our lists became smaller and smaller with each subsequent move back towards old highs. This is a tale tale sign of a market losing the foundation beneath it.  When we focus on quality weekly chart breakouts, the guesswork is removed from the equation as to when to deploy our capital for profit potential trades.  Stay focused and trust your process.

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