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Tuesday, October 20, 2009

Tuesday Swing Signals, Trend Busters, Trend Leaders and Gap Signals for Oct 20, 2009

This post is announcing that Tuesday's Swing Signals, Trend Leaders, Trend Busters and Gap Signals are now available at Alert HQ. All are based on daily data.

Today we have the following:
  • 110 Swing Signals -- 88 BUY signals and 22 SELL Signals.
  • 678 Trend Leaders, all in strong up-trends according to Aroon, MACD and DMI. We have 140 stocks that are new additions to the list and 199 that fell off the previous list.
  • 19 Trend Busters of which 9 are BUY signals and 10 are SELL signals.
  • 208 Gap Signals -- stocks with upside or downside gaps or gaps that have been closed.
The view from Alert HQ --

It's just a world of wackiness out there. Last week we got a ton of SELL signals on municipal bond funds. A little research revealed that real carnage had been occurring in the muni market. This week we're seeing many of those same muni funds pop up as BUYs on the Swing Signal list. Some have yet to struggle back above their 50-DMA but some look like they might really be in recovery mode. Something to keep an eye on...

Other than munis, the Swing Signals list doesn't offer many other BUY signals. On the other hand, there is a pretty good grouping of materials/energy stocks generating SELL signals. I often use the Swing Signals list as a leading indicator and the current situation is not particularly bullish.

On the list of Gap Signals, 94 out of 208 are bearish gaps down. Among the bullish signals there seems to be a preponderance of tech stocks, especially small-cap tech.

All in all, the market remains noncommittal and future direction is difficult to discern. Apple reported a blow-out quarter last night and the major indices spent most of the day underwater. When an exciting bellwether like Apple can't move the market, it puts me on my guard. Some analysts said the market fell because of a bad housing number. I don't buy it. Everyone should have expected a bad housing number as the selling season is now essentially over.

On the other hand, the number, breadth and variety of stocks on the Trend Leaders list would seem to indicate that the recent bull market is still very much alive. Keep in mind, however, the Trend Leaders are the last ones to roll over and the last ones to show real recovery. This is due to the heavier filtering on the daily price data making this indicator slower to react.

We all know how volatile earnings season can be so at this point it might be considered prudent to grab a few of today's BUY signals and just put them on a watch list. It's not unusual for some of our BUYs to pull back after generating a signal and then resume their upward trajectory. After all, there's nothing wrong with being patient.

Using our signals --

If you're a momentum trader, the Trend Leaders list is a good place to go shopping. If you practice technical analysis, check out the Trend Busters. And if you are a short-term trader or even a day trader, our Swing Signals or Gap Signals may provide some good trading ideas.

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