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Here's How I Want My Swing Trade Screens Work For You 5/9/24

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But first, our usual look at the hourly bar chart of the ES S&P fuguetures. It's still in that launch paddy looking setup, 1 day after a 5 day cycle low was due. If this doesn't launch today, then we're stuck in a flat up phase, which is more likely to turn into a sharp down phase after a cycle high that's ideally due Monday or Tuesday next week. 

To avoid that fate, the market needs to clear the trendline at 5185 as of 6:30 AM ET. That line drops to 5180 at the New York close. If they clear that, they still face resistance at 5190 and 5200-05. Clearing those would probably lead to a launch of epic proportions. 


I run screens daily of around 1300-1400 stocks that are actively traded and priced greater than $6/share. Ultimately the goal is to find a handful to add or not add to my personal trading port long or short.

In the daily screens, which I report once a week in the Technical Trader, today the screens found 42 setups on the buy side and 48 on the sell side. But after applying a trigger screen, which is for stocks that actually triggered a particular type of buy or sell signal that day, there were zero buys and 10 sells! Apparently, the rudder of the ship is starting to turn.

Once a week, I report the daily screen result in the Technical Trader reports. I also look back at the final output from my daily screens for any that haven't yet moved and still retain a propitious setup. From that group, I publish the final weekly chart pick list. I track those picks starting that day until they get closed out, usually by hitting a trailing stop. 

April was the first full month of results incorporating my most recent tweak to the screens. I put in a final trigger screen which eliminated all the pre-trigger output except for those that actually hit a buy or sell signal trigger that day. With that limited output I can easily check each chart to be sure that it meets the eyeball test. 

Some I don't like because they have already moved, which raises the risk in the risk/reward equation. Actually hopping on a mover can be a good ride sometimes, but sometimes they're near the end and reverse viciously. I haven't yet figured out which is which well enough to take the plunge on those.  In other words, I don't like to run after a moving train. I'll leave that for other people.  

Sometimes signals are triggered by news, such as a good or bad earnings report, and the stock has a big move. I ignore those. It's too late to take advantage. But other signals come from within congestion patterns. Those are the ones that often precede the good moves on earnings or other breakouts for any reason. These are the ones with the best risk reward profile because you're in position before the move. Yes, there are also negative surprises that can take big chunks out of profits, but the signals that work outnumber those that result in big overnight losses.  Many signals result in nothingburgers. As long as big winners outnumber the bad boys, you're good. 

I was surprised over the past week to start seeing more shorts than buys from the screen output on some days, but I took some of what they gave. I have been peeling off the longs this week and have been following the screens in adding shorts, but not whole hog. There have been a lot more sell signals than I have put into play. I have missed some that have broken support because of my hesitancy. 

That's the thing about this market. There's always a bear market somewhere, but they're well hidden because the Magnifishit Seven are the market averages. As they go, so goes the S&P. But throughout this bull run, beneath the superficial appearance of the broad market averages, there have always been plenty of stocks acting like real shit. The screens find them.

The hard part is suspending disbelief and taking the plunger, if you will, or if taking it, being able to hold through the churning of the waters and bubbling up of the noxious gases before the final flush. Hard to do. It's easier to believe the long side in this environment. 

In the third week of April, when almost everyone was all beared up, I was bullish because both liquidity analysis and cycle analysis showed that a bottom was forming. So I was comfortable in having a preponderance of buys in my trading port. 
April was the first full month where I utilized the trigger screen as an overlay for the previous screen output. I had started using them in March. The screens had found a number of buy setups in February, March, and early April that worked.

The result was that for all picks closed out in April the average gain was 15.2% on an average holding period of 34 calendar days. Of those 7 were buys and 4 were shorts. 9 of the 11 picks close out were profitable. Replicating that would be a miracle, or challenging to say the least. However, while that performance is an outlier, it's not an aberration. In the past 6 months, there's been one losing month, which was before I instituted the pull my trigger finger overlay. 

In reporting the output once a week, my goal is to make it easy for traders to follow, or not follow, on their own. A 20 minute read usually on Monday morning to give you some ideas for things to do this week. Then automatic take out signals. So it's one decision. To enter, or not to enter, that is the question.  

For disclaiming purposes, keep in mind that past results don't mean shit. In this business, it's not about what have you done for me lately. It's what'll you do for me today and tomorrow. You pays your money and takes your chances. I hope that you will join me in that effort.

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  • DrStool changed the title to Here's How I Want My Swing Trade Screens Work For You 5/9/24
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Good example of how this ideally works

ABNB - Sell signal as of May 1 close. 

I was in and out short on the upside shake-in but went back short yesterday on the rollover on 2 hour bars. 

They posted negative guidance last night and stock is down 8%. 


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Been taking profits on both sides today. I am out of ABNB. Will take another look before 2:30 turn time. 

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The "Borrowers" are back. I'm a little surprised that it's this soon given that they are sitting on 866 billion in cash. But there's been a big drawdown this month, so I guess they're starting. 7 weeks of T-bill paydowns are coming to an end. No more gravy train. 


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