Institutional investors began a U.S. stock market rally the day after the Presidential election on the anticipation that corporate and personal tax reforms would occur under the Trump administration. Those hopes have dimmed as the administration appears in disarray and turnover of key personnel continues. North Korea also remains a wildcard. In response, institutions did what they always do when uncertainty rises, and that is reduce their exposure to stocks by exiting positions – which drove the major indexes down for a second week.
Many of our stocks, however, were relatively unchanged on the week. Some recent shorts continued declining and even some longs continued rising, so not an entirely unproductive week as the one prior.
Analytics: Some formulas have been tweaked in response to several recent long positions posting significant trading loss – a situation which simply should not occur. The tweaks represent a slight increase in sensitivity – which would have signaled reversal trades in these stocks several weeks ago, for either much smaller loss or none at all. These positions that are now counter to revised analytics will be held though the current counter-trend and subsequent positive trend. Level 1 is most affected, specifically CYBE, FTK, HNRG, NGL and NPTN.
Highlights: 4 new weekly highs in long positions. 4 stocks with double-digit long gains:
TRUE +10% BZH +23% LPSN +83% NEFF +135%
3 new weekly lows among short positions. 1 stock with double-digit short gains: