Past week recap:  As measured by the major indexes, the stock market was flat for a third week in a row – there are just no more buyers driving stock prices up to keep the recent uptrend going.

With our positions predominantly long, the next cycle of trading behavior will be many reversals from long-to-short, and we are beginning to see some of that this week – nearly all trades are of the SELL + SELL SHORT type.  Some very recent longs are being exited for loss after not gaining upward price momentum, whereas older long positions are being exited for good gains from the post-election rally.

Still seeing some new weekly highs along with an increasing number of shorts with new weekly lows.


Our review of key behaviors of successful traders began last week with the axiom that “the more positions the better”.  This week, the focus is on minimizing attention paid to the stock market:

Set it and forget it – the phrase made memorable by infomercial star Ron Popeil applies to our stock trading.  Our strategy of objective computer analysis of trading data is designed to purposefully remove emotion from trading decisions, as human emotion is the biggest impediment to personal investing success.  The most successful subscribers enter their trades on Sunday night, and then pay no attention to their portfolio until the following Sunday night.  Those that obsess over their positions, checking them daily or hourly, figuratively living and dying over every 50 cent move, are inviting emotion to enter the picture via second-guessing that can lead to intra-week trades that usually prove harmful.  Remember, when you owned mutual funds you did not research every position and track them daily, so don’t start now – allowing the weekly analytic signals to guide your trading will lead to the highest returns at year’s end. 

So, as hard as it may be to do:  1) exercise the discipline to minimize your attention to the market and your positions intra-week, 2) know that Monday’s market action is the least correlated to where stocks will end the week, and 3) focusing on your career and family, instead, will deprive the stock market of affecting your mood throughout the week, a power it should not be allowed to have.   

Highlights:  6 new weekly highs in long positions.  11 stocks with double-digit long gains:

       ERF +18%       HUN +19%      NGL +29%        ATW +35%      PIR +47%     CYBE +53%                

       FIVN +10%     KMT +19%      TROX +27%      NEFF +36%                                                      

       FRPT +19%