Moody Memorial Weekend Update

tldr: The "Sells"/"shorts" lead this week due to precious metal miners dip

Here are the latest weekly notes for this week. Tech leads as of this week but precious metal miners have dipped from last week. Financials continue to be very weak.

My goal will be to keep it short, simple and simple to scan. There will be a lot of information packed in each update within the summary charts. For those who use trend following or price following information with longer time frames, then these updates will be very helpful.

Short-term traders may find ideas they can run through their systems but they may not appreciate the almost slow-seeming pace of change in the lineup. Not my wheelhouse.

On to the summary chart. This list will be edited down to keep it manageable.

The rules for this chart are based on a notional starting principal of $1M USD, with 0.5% (half-a-percent) of risk per idea when an idea is introduced.

The summary chart reports a suggested “Risk per share” to show what this portfolio will tolerate before an idea is stopped out for a loss, or for a trailing gain. The suggested stop loss exit price will be updated from time to time if an idea continues to progress. This is what will take up a lot of time to update as we move forward. This is a 12 month experiment - this is “week 3” theoretically.

Here’s the summary chart of the long ideas. I may simplify it to make it easier to scan.

Interpretation of this weeks’ long ideas summary:

Tech leads, gold miners dipped. And we have a few more new ideas added to the list.

Remember we risk half-a-percent of $1M USD per idea - we’re pre-planning to risk losing $5K per idea. I have supplied a “risk per idea” for each idea. You divide that 1/2% risk by the risk-per-idea. I would trade different share amounts for each idea - each idea’s trading range or volatility is different but the capital risked stays same.

(Example: You have “risk per idea” of $12.87 for SE. Divide 5K by 12.87. That gives you 389 shares. Your entry comes the week after the week SE was introduced, the week ended 5/15/20. It is not perfect, but you get the idea.)

It’s heftier list than last week.

Heads-up note: We will be limited to a maximum of $2M long position (if one were to use margin for this stock focused list) but it is likely we won’t do that unless we have accumulated some notional unrealized profits within that list. At some point, we’ll have to drop off ideas that are negative or close to their stop loss exit prices or stop adding new ideas and let nature and time sort out what stays in the list.

Don’t forget stocks and trends go down too. Here is the sell / short list. Some can use it as an “avoid as a long from trend trading POV” list. (Long but you get the idea.)

The short version of this week’s list:

The sell ideas are in the lead in terms of profits.

We have started with 818K worth of longs (their market value when introduced) and 285K worth of sells, with a net long position of 533K based on the starting market value (818K - 285K). So far the sells are in the lead and provide most of the gains so far. this will change over time. We’ll see what the rest of 2020 brings.

We’ll review some charts to get a visual sense of what’s happening. Let’s keep it simple and look at the top 10 from this week for a quick sense of leaders. Many of you are probably trading these ideas for your own systems.

We’ll play it by ear each week, and see what the markets bring us to trade with.

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