Trade Anatomy Portfolio
+1.93% MTD | +33.17% YTD
1 long | 0 buys | 1 sell
As the market continues to work through the current correction, I thought it would be good to share a simple but effective chart for understanding your trading environment. When you combine this chart with weekly stock setups, you can increase your probabilities of success and minimize whipsaws. The following chart is that of the SP-500 index on a weekly basis with trailing stop lines displayed below. You can always click to enlarge the image.
The blue line is what I use to mark the main trend of the current market. When the blue line is trending higher and shaded, it tells me that my current trading environment is helpful for taking my trade setups. When the blue line is violated and begins moving down, the markets are in a confirmed downtrend and are most likely going to negatively influence stock selection performance.
Currently the market is trending down, and setups are few and far between. As markets work through corrections, there is an eventual turn and the trading environment becomes more productive for taking stock trades. This generally happens when the yellow line makes its initial move higher after the blue line has been moving down for several weeks or months. You can see the last two times (marked by the pink line ) that this occurred. We are currently and patiently waiting for the yellow line to turn positive.
CSS was removed this week from the portfolio. Our initial position was established on 8/19 at 21.82 and used 8.27% of our portfolio capital. On 9/23 CCS was sold at 21.18 for a small loss which impacted our total portfolio value by -.24%. Below is a chart of CCS.
LGIH is now the lone holding in the portfolio. It continues to trend well from both a daily and weekly chart perspective. As of the close on Friday, LGIH is up 40% from the initial breakout.
This week, the watchlist did have a small amount of churn. You'll also notice that the list has also increased slightly from previous weeks. This is mainly due to being a bit more lax on the technical setup. Below are a few weekly charts for viewing.