It is presumed the Fed will announce another hike in interest rates in December

The major indexes turned downward as institutional investors began to sell, citing two reasons:  1) disappointment that long-awaited legislation to reduce corporate tax rates appears stalled or on track for long delay, and 2) a general sense that is it time to lock in profits with so many stocks at or near yearly highs.  Financial stocks, among the first to rise during this year’s rally, now are among those leading the retreat in price, as it is presumed the Fed will announce another hike in interest rates in December.   

Our stocks have been signaling a market decline for over four weeks, with many having already cycled from long-to-short in the past four weeks, for some already impressive short gains.  A decent number of our long positions, however, are continuing to rise or at least remain static. 

Among our positions that proved “counter-to-trend” after recent changes to analytics, some have been recovering and as such remain on our lists while they return to profitability or at least pare losses.  Those that have yet to show signs of cyclical recovery are being phased out.   

Highlights:  3 new weekly highs in long positions.  7 stocks with double-digit long gains:

     FIVN +19%      CECO +24%                                LPSN +57%     BZH +62%                                                                   

     NCI +10%        HUN +21%

     URBN +17%                                                        

     

5 new weekly lows among short positions.  4 stocks with double-digit short gains:

                              EVTC +23%      CECE +30%

                              TRUE +26%      EVH +32%

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