Past week recap:
As often happens the year ended with a whimper, with stock prices barely changed on light trading volume, as many institutional traders took the holiday week off and news was slow. The financial media and traditional brokerages are cheering a year in which passive investors possibly earned +25% returns, one of the best results in recent years.
Our stocks were among those not budging much for the week. For the entire year though, we had surpassed +25% returns by spring, on strong uptrends that carried over from 2016. Then we sat through an uneventful, flat summer, and even took some hits on those stocks we did not adjust when revised analytics indicated our positions were counter-trend. But another strong rally at year end has likely pushed total trading returns among many of our stocks into the +50% range or higher – calculations are pending. So even in a rising market we still outperformed passive investors.
2018 market predictors are still mixed – some forecasting another strong year as tax reforms take effect, while others are suggesting this bull run – one of the largest and longest – simply cannot go on owing to much more downside risk than upside potential at this stage. Unlike passive buy-and-hold investors whose strategy is to hope the rally continues, we will react accordingly and earn profits in 2018 no matter which way our particular stocks move. Here’s to another year of greater returns!
Analytics:
Our weekly computer-driven trade/no trade decision matrix is as complex as it has ever been, but that is a good thing – a recent review indicates the probability of any trade ending profitably has never been higher. Long time subscribers will also note that trading frequency has declined as well. Combined with timely periodic re-evaluation of each stock – and appropriate substitutions – we are prepared to expect significant gains going forward.
Highlights:
5 new weekly highs in long positions. 7 stocks with double-digit long gains:
- FIVN +17%
- CECO +21%
- LPSN +62%
- URBN +86%
- FMSA +12%
- NCI +23%
- PES +20%
No new weekly lows among short positions. 2 stocks with double-digit short gains:
- EVH +23%
- TRUE +27%