Past week recap: With institutional traders back at work after holidays, they began the new year with renewed buying, driving the major market indexes up. This is quite a departure from the beginning of last year when the markets nose-dived. From a trading perspective this renewed buying is a bit surprising – and late – as stocks have already made significant moves upward and last week’s buys were too late to embellish institutional 2016 year-end reports. This could be a sign that institutions are anticipating policies/legislation from a Republican-led White House and Congress that they expect will benefit earnings of U.S. corporations, but that is merely a guess.
Trading among our stocks picked up, with a mix of buys and sells. Still holding a high number of double-digit gainers – both long and short – even after closing out a few this weekend.
Analytics update: Much effort and time has been spent the past 8 weeks evaluating six different analytic variations, with the first five not proving more productive than the current version in use. The sixth one, however, has proven more productive – with fewer trades as a bonus, proving the adage “if at first you don’t succeed, try, try again”. Without going into mathematical details, extensive back-testing has confirmed this version will yield fewer trades, a higher percentage of profitable trades, and higher overall return by avoiding more of those short-term “blips” or false reversals that produce losses. This version – Version 51 – is in place this weekend. On a few stocks this new version suggests a stock trend direction opposite the prior version, in which case adjustments are incorporated in this weekend’s trades or as soon as price action justifies. Overall, a good development for starting our 2017 trading.
Highlights: 4 new weekly highs in long positions. 18 stocks with double-digit long gains:
AHGP +16% GRBK +14% ATW +29% NEFF +31% PIR +65% PES +74%
BZN +13% HUN +16% ERF +20%
CYBE +10% KMT +10% FLDM +23%
EVTC +13% NGL +14% TROX +27%
FRPT +13% XNCR +11% TRUE +28%
1 new weekly low among short positions. 3 stocks with double-digit short gains:
URBN +17% NPTN +25% AGEN +26%