New Heights, Thinner Air Again

November 2019 Trend Trading Update

I have a chart with a cool high altitude space-ship image from Jan/Feb 2017. This was my way of visualizing the All World Index moving to new highs. It peaked a year later in Jan 2018 and then that was it … until now. Back in Jan/Feb 2018 my systems hinted at a possible peak and or pause (the over-simplified version was that the ADX had hit the 60s by then which usually marked a late stage trend for me - it’s flawed but works).

18-plus months after the Jan/ Feb 2018 peak, we are ready. Ready for possible new highs. I had had enough practice after years of weekly chart reviews and spreadsheet updates to prep for a long wait after the Jan/Feb 2018 highs. My time frame was 18 months, based on experience. Here we are at 18-plus months. 2020 here we come (I hope.) You can call me out or call me crazy or stupid but it’s okay - price doesn’t judge.

This update is also going to mark the beginning of a more conversational style of update. I will share what I think is relevant based upon my updates - it will vary.

While the price following (i.e. “trend following” or “trend trading”) method I have focused on since the beginning of Rooster360 — since its days as a free Wordpress blog — has evolved. But it really hasn’t changed all that much. It’s all about following prices over long time frames, and constant reminders to myself to keep an eye on minimizing losses, while accommodating a natural inclination to make narrative explanations or “reasoning” about market price behavior and future predictions.

In recent months, I tried to simplify updates of an ideas universe which runs to hundreds of ideas when the market if running either “hot” (upwards) or “cold” (downwards). Regular readers know I would begin with a stop loss update of ideas which hit estimated stop loss exit prices - which were all calculated as a simple multiple of a multi-week average true range. I would then move on to the best performers, then laggards and finally potential new ideas. It’s not for impatient people.

This simple and blunt system, when combined with a focus on trade sizing, and adding to winning trades only using the gains, is a good way to keep everyone out of trouble. By “trouble” I mean, I did my best to share notes that you might use to stay in the “game” - by staying in the game I meant that nobody avoids losses, but you can only use losses to your advantage as information about focusing on what’s working.

Anyway. We’re going to look at the same things but I’ll discuss them conversationally.

This week: Lots of ideas were stopped out - 2 sells/short ideas to 1 long idea. Not a bad sign of two things: gyration and movement in favor of more long ideas going forward.

The Top 10 and Top 20 lists for longs (here’s a free Koyfin Charts Top 20 long list) and sells hints at what was obvious to you day traders - semiconductors have taken a robust turn upwards. A good sign in many ways which I hope will not be a head-fake. Let’s be hopeful for more gains and for those gains mean in retrospect - that the broader market and economy still has “legs” (see the title of my last update, you don’t have to read it. I often use a teaser image and a headline to tell you the story of the price action in its broadest sense.)

Here are the top 5 charts (based on the best “last 6 month” performers. They’re all great but I have to think about how most folks read everything on a phone. Click on the Koyfin link I gave you and you can play with the list to your heart’s content.

The Top 10 and Tops 20 sell lists (here’s a free Koyfin Charts Top 20 SELL list) are a humbling reminder that not everything is going to work out. We don’t always get the “girl”, “guy” or “person” BUT there’s always someone for each of us. I personalize the markets so that you can personalize it too and at the same time not take the bad news personally. We’ll all find winners. BUT only after surviving a fair number of losers.

No surprise that the top “sell” is an inverse semiconductor ETF.

Hard times for a lot of on-demand / consumer SaaS platforms. Reality sets in.

This used to be a major brand and chart. Times and tastes change.

What a mess. No jokes necessary here about burning up. It’s just a sad chart.

And now for some charts: the broader global market cap, semiconductors and one Chinese stock chart (not a stock pick but I do like looking for potential “canaries in the mine” for more to come).

I wrote a few weeks ago that I think the thing to do was to prepare lists and positions for 2020. I want to share some charts from the final week of September 2019. Here are about 2 dozen “long” charts I wanted to share. Some have begun to run and others are just sitting there. This is not a bearish line-up and there’s room for optimism.

I admit I’m not excited after looking at macro charts for bonds and futures charts, after reviewing the major stock indices - but the stars don’t line up for us like that and go “welcome, dear sir or madam, do be seated and would you like a perfect in every way market?” If only life were like that and we didn’t have to go through rejection and loss and had six pack abs and six figure (or more) bank accounts handed to us without effort, worry or risk. We’ll just have to settle for a few fantastic potential trends.

Write me with questions, not for advice but for a sounding board (no promises on answers), if you wish. I’ll try to write more in coming weeks, but I’m in the middle of some new projects and wishful thinking works in progress. Just don’t overtrade and please if you have genuine losses to take based on your time-frame, take them and reset for 2020. Really - prep for Q1 2020. Have a good weekend and week ahead.




Market Finding Its Legs Again

A Shaky Market May Be Ready For New Highs in 2020

The market’s “on pause” may be ending in coming weeks. It’s possible new highs announcements in the public equity markets will be unfolding in 2020. Let’s begin simply with top down views of the indices and then go through the various Rooster360 reports. What are we watching for as the year rolls into 2020? New highs.

There are many more indices — globally — to watch.

A look at some negative yield sovereigns, Germany, Russia and the U.K.

High Yield Emerging Markets Corporate - what happens in the next 18 months?

Let’s get to Stocks - here it the Top 20 leader-board - what a change from Q2 into Q3.

Charts of 5 from the Top 20 that did best over the last 30 days.



The Top 20 Sells - when the market says “stay down” some trends do just that.

What got stopped? Ebay and Twitter were stopped. Progressive used to a be a Top 20 long ago for a long period of time but it’s a good reminder that trends do change.

Just the Progressive chart is shared from the stopped out long list.

Here is a selection of charts for you to review. I try to slice and dice through the ideas universe to share some ideas which you can run through your systems. These are filtered by time — they were added to the ideas universe just a few weeks ago.

Public markets are getting interesting — this was not expected and it’s good — we will see how much of the past year’s noise cycle turned out to be useful news or not. For now, I would caution about one thing however. Volumes look fairly lighter.                  


A Market More Mellow and Maudlin

Weekly update during Q4 2019

At the moment, there are indications, despite a whole lot of news and noise that this market is not quite ready to give up the ghost. It has been less than ebullient and it is not like a year ago - when Q4 2018 was characterized by decline and selloffs. This looks more like a cautious pause - animal spirits are subdued in public markets.

The world isn’t quite ready to come to an end just yet even though private markets are currently repricing both risk and reward with a re-embrace of actual returns on capital, due to the lack of return OF capital with some very big names.

I usually end with potential charts of interest for your notes — we’re going to flip that.
First we begin with charts for your review. This is to emphasize I’m already looking towards 2020 and want to emphasize that we take care to have the option of benefiting from new or returned leadership with “new” long and short ideas.

Below we have long charts that could continue to run in 2020 - no need to rush.

What was stopped out this week? ALL of them were sell / short ideas — not a bad thing since we are primarily long investors and speculators but just one data point.

And what are the TOP 20 LONGS as of this week?

A detailed list of the Top 20 LONGS has been updated on Koyfin charts for free.
Charts from this current leader-board are income/reit type and not “story” stocks.


Next chart is the TOP 20 SELLS / shorts list (also updated on Koyfin for free).

The Top Down summary for last week and this week shows more LONG strength.

Last week’s estimated top down summary of the ideas universe - about 700 ideas

The estimated summary of this past week shows improved long ideas strength.

The US Dollar is at an interesting point. This looks like a spot to watch.

Be careful — you are positioning for next year and holding on to your wins from 2019.
I have been writing every week but the posts are too long to email to you. This is short enough.

Price Action Still In The Dark

Q4 2019 Weekly Update

This market’s price action has not been entirely promising, its leadership and character has shifted considerably. Hot growth leadership has been tested, long awaited IPOs, some nurtured for most of the past decade, have been squeezed. The sentiment has gone from cutting edge to “cutting back” — but it still appears to be a market on pause. This is not like a year ago. Yes, there are some definite worries but when is there never something to worry about?

All we can really do here is track an ideas universe of price following of trends, and then distilling it to a few stories to make sense of what is going on.

Let’s jump into the charts — beginning with stop loss ideas. These are the ideas which hit an estimated stop loss exit price — they provide a shopping and watch list for future ideas. Today’s heroes become tomorrow’s “heels” and vice-versa. That’s why I try to start with stop loss updates and move on to the Top 20 Longs and Sells.

The long charts which were stopped out included what was a very “hot” chart, ROKU.

We say goodbye to these stopped out longs for now. But let’s not forget the stopped out sell charts. Here are potential longs in 2020. What’s interesting is AMX and refiners, and one shocker, RPAI (a Retail REIT). Come back to them in 3 months.

Enough of the charts stopped out. Let’s move on to the Top 20 LONGS and SELLS.

The Top 20 Longs list has changed so much from 3+ months ago — I’ve commented how even with a slow moving trend following ideas universe change can be shocking.
For your use and convenience, here is the Koyfin Charts Top 20 Longs list.

Here we are from ACGL, AMT to ZTS, from A to Z — the current long leadership.

There are the current leaders which continue to run — always be ready for change but for the moment don’t fight the tape.

And what about the Top 20 SELLS? We have a list for that one too on Koyfin. Hard to bargain hunt when something keeps on falling. There really is no rush, short of some magical catalyst or the certainty in seller exhaustion. If you want something here take your time. You have Mr. Market doing the heavy and anxious lifting of making low prices even lower. (note: $RISK/share is shared to give you sense of how much you could risk per share.)

I won’t bother with charts here for lack of space and out of compassion to longs.

Let’s move on to “laggards” - ideas which under-perform for now. Laggard SELLS first.

And of course there is a LAGGARD LONG list of under-performing long ideas.

Let’s look at charts of potential new ideas - without spreadsheet summaries.

A potentially attractive line up of new long ideas have been shared but as we know they could join the stopped out ideas list or become laggards and be in the red. Beware. But what potential new SELL ideas do we have on deck? Here’s another list of potential charts to consider for sales, shorts, reduction or simple avoidance of longs.

A lot of charts and notes have been shared with you. Be patient, take your time to go through them and see what you can use. We work with longer time frames and focus on things like risk per share and understanding that today’s winner could be a loser tomorrow and vice-versa. We’re not managing 10 digits (but if you are, please feel free to contact me, that would be fun to find out how you even found me) but what we do manage in terms of savings and investments matters a great deal. So I focus on risk and patience and not fighting the tide.

I may or may not update this with futures charts - in any event plenty of notes here.
Good luck to you and have a great weekend, week ahead and Q4 2019.

Gloomy Onset for Final Quarter of 2019

First Weekly Update for Q4 2019

The market does not inspire complete confidence based upon recent price action.
I remain optimistic that while we will find leaders that will finish the quarter and the year it may not be inspiring. The shift in leadership took only a few weeks and it points towards a less ebullient atmosphere in the near-term. I caution against an excessively “bearish” stance however. Nothing has happened yet like a year ago.

The Koyfin Trend Trading lists have been updated for the week. The long list and the short sell lists are free for your notes and as a reference on trend trading leadership.

The current temperature of Mr. Market based on a top down summary is tepid.
Gains from LONGS are up 5% from last week and total gains are about 185+K

BUT gains from SELLS up 33+% from last week total gains about 105+K

There were only 3 stopped out ideas

$DAL $CIEN $EGHT stopped out with an average of 14% loss

4 of the TOP 20 SELLS from this weeks' updated Rooster360 Trend TRading list $ASMB $CLVS $CXO $GTT TOP 20 SELL list updated on @KoyfinCharts as usual

4 from the TOP 20 of Rooster360's trend trading list as of this week the top 4 based on the last month $RNG $CDW $DG $ETR list updated on @KoyfinCharts as usual

Here are the latest TOP 20 LONGS in summary, with updated stop prices. As an idea’s price trend continues, estimated stop loss exit prices are updated, usually after a 10% notional gain, and then as it passes 25 - 30% and then from 50 to 60%. After a 50 to 60% gain, a trailing stop loss based on the closing weekly price, trailing 4 to 8 weeks, is used — the stop loss price for longs is never lowered and is always ratcheted higher.

The Top 20 SELLS as of this weekend have been updated — it’s a slow moving list.

What are some LONG ideas that might be worth a look? Here are some ideas which have still have about a 10% gain since their addition to the ideas list.

Owing


Owing to time constraints, this update will forgo the top-down macro/futures chart review. At the moment, the market action is subdued and not a hot growth stock environment. Income plays, utilities, and this means less aggressive trades. I remain optimistic for 2020 and am building watch and “shopping” lists for accumulation.



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