The overall stock market remained range-bound until Thursday comments by Trump about upcoming tax relief re-ignited some buying among institutions, resulting in slight gains in the major indexes.
While some of our stocks participated in the late week rally, many did not, in a kind of “stealth” bear market, such that our positions remain a mix of longs and shorts. The week produced a high number of large price spikes up or down, some of which were favorable (ATW), some of which were unfavorable (FTK) – not clear if these were triggered by surprise earnings or other new information.
Our review of key behaviors of successful traders continues this week with an emphasis on timely trades:
Act on trade signals promptly – the stocks on our list are there because they are dynamic – very likely to change in price significantly – even within a period of one week. A trade missed by a week, or even a few days, can result in a large gain being severely compromised, or a gain even turned into a loss, or a loss increased. The reasons for a missed trade include 1) feeling too busy to act, 2) not wanting to incur the additional brokerage commissions, and 3) not wanting to lock in a loss (“If I hold it for one more week maybe it will rebound”).
Bear in mind trading only takes a few minutes, and may ultimately prove to be the most profitable few minutes spent during your entire week, your employment included. Trading commissions in the big picture are a minute cost of doing business and should not be a reason for avoiding a trade for which a few cents price will cover. And most importantly, the only thing worse than a small loss – is a big loss, so make that trade reversal for loss when indicated, as those who do are often well on their way to covering that loss with a gain in the new trade while the unresponsive trader’s loss is only growing – and it only takes a few of these mistakes to gut an investor’s account.
The analytic trading process up through newsletter publication is math-based, unbiased and objective. The final step is up to you – to place that trade, and this should be followed through in the same unflinching, objective manner, without allowing the influence of emotion, second-guessing or hesitation. For highest investment returns, stay disciplined and make those trades automatically when indicated.
Highlights: 6 new weekly highs in long positions. 11 stocks with double-digit long gains:
SLW +15% ABX +21% FRPT +32% CYBE +42% NEFF +53%
ERF +22% KMT +31% PIR +40% TROX +51%
HUN +26%
NGL +26%
2 new weekly lows among short positions. 3 stocks with double-digit short gains:
ATW +15% AGEN +30%
URBN +17%