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Sunday, January 27, 2008

New TradeRadar market scan turns up some surprises

I have been neglecting this blog lately and barely paying attention to the markets. Rest assured, though, I haven't been slacking.

I have been working on a new approach for using the TradeRadar software. I have developed a method of scanning practically the whole stock market and applying an automated version of the TradeRadar signal software. The tests involved have been beefed up and made more rigorous. Given that the process is automated, there is less left to interpretation.

How it works

I scan the AMEX, the NYSE and the NASDAQ. That amounts to over 8500 securities including stocks, ETFs and closed end funds. The most up-to-date list of symbols for each exchange is read in. Then the software sequences through each symbol in each exchange, pulling in a year's worth of daily data and looking for recent trend reversals. In addition to the basic TradeRadar signal, trend lines are calculated and analyzed for direction (up or down) and steepness of the angle. To help confirm the BUY or SELL decision, the shape of the TradeRadar signal is analyzed. 20-day and 50-day exponential moving averages are calculated and a moving average cross-over is required in order to declare a BUY or SELL.

If you would like to check out the lists of alerts generated by this process, visit the TradeRadar Alert HQ page. I am offering the lists for a really low introductory price of $1.99 for either a list of BUY alerts or SELL alerts and $2.99 for both together. Payment is made securely through PayPal. I invite you to give Alert HQ a try. The BUY list has almost 70 stocks on it and the SELL list has nearly 130. At these prices, it's only about a penny per alert. Not a bad deal, if I do say so myself.

Observations

In taking a high level look at the list of stocks and ETFs that showed up on the BUY list, I was surprised to find so many municipal bond funds. It appears that over the last three or four weeks, there has been a search for yield and munis have been the beneficiaries. (You may remember a post I wrote describing Merrill Lynch's call that munis were attractive at recent levels.) With these funds bottoming and turning up, it implies that there is little fear of municipal bonds defaulting or municipal bond insurers failing.

Among ETFs, it appears some investors are betting on oil and gas falling. With other investors bidding up crude prices over the last two trading days, we'll have to wait to see which forecast turns out to be right. With all the discussion of utilities being a safe place to hide in a down market, I was surprised to see an ultrashort utilities ETF generating a BUY signal.

It's no surprise to see consumer discretionary and some banks and brokerages on the SELL list. In general, it can be said that the SELL signals are well distributed across sectors. There are energy companies, tech stocks, pharmaceutical, biotech, telecom, industrials, you name it. There is a generous sprinkling of well-known defensive names also. It seems this market is an equal opportunity bear.

As another indicator of the tone of the markets these days, the SELL list has about twice as many stocks on it as the BUY list.

3 comments:

www.ShareTipsInfo.com Team said...

Dear Visitors,

This blog is really nice and informative. We do think our posting will be highly beneficial for you too. As we know now a days
stock market trading has just became a joke, every third person who don’t even know about the name of exchanges is willing to
do trading due to which in recent past we have seen few shares which are fundamentally very week but had flied high in rally.
But now everyone is trapped in those sort of companies.

Now best strategy is to wait and watch let Nifty close above 5350-5400 for 1-2 days only then strength will come back in market.

We are expecting short covering above these levels.


Till then our approach should be wait and watch trade in less quantity.


Regards
ShareTipsInfo Team

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Anonymous said...

Dear Visitors,

This blog is really nice and informative. We do think our posting will be highly beneficial for you too. As we know now a days
stock market trading has just became a joke, every third person who don’t even know about the name of exchanges is willing to
do trading due to which in recent past we have seen few shares which are fundamentally very week but had flied high in rally.
But now everyone is trapped in those sort of companies.

Now best strategy is to wait and watch let Nifty close above 5350-5400 for 1-2 days only then strength will come back in market.

We are expecting short covering above these levels.


Till then our approach should be wait and watch trade in less quantity.


Regards
Sharetipsinfo Team

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