Thursday Bounce: Trend Busters, Swing Signals and Trend Leaders for July 9, 2009

This is a quick post to announce that we have published Thursday's Trend Leaders, Swing Signals and Trend Busters at Alert HQ. All are based on daily data.

Today we have the following:

• 72 Swing Signals -- A couple of days ago we had 35 signals, today we have twice as many. Happily, we now have 65 BUY signals, a mere 4 SELL Signals plus 3 Strong BUYs. Whoo-hoo!
  
• 56 Trend Leaders, all in strong up-trends according to Aroon, MACD and DMI. There are 18 new stocks that made today's list and 60 that fell off Tuesday's list.
  
• 48 Trend Busters of which 5 are BUY signals and 43 are SELL signals

The view from Alert HQ --

Talk about mixed signals.

If you look at our Swing Signals list you would think the market was in the middle of a big bounce. BUY signals are swamping the SELL signals and we even have a few Strong BUYs. Yes, there's a good sprinkling of tech stocks and tech ETFs but the distribution is pretty broad-based with a good number of different sectors represented, even a homebuilder!

To bring the level of enthusiasm down a bit, our list of Trend Leaders is looking rather anemic with only 56 stocks listed. Notable is the presence of a good number of inverse ETFs based on commodity and materials indexes. These guys are well represented today and show how hard these sectors have fallen.

Our Trend Busters seem to be caught between a rock and a hard place. We have enough upward trending data (in some cases, several months worth of bullish data) to generate SELL signals when the stocks reverse and begin to fall. On the other hand, most stocks have not been falling long enough to allow us to generate many BUY signals based on reversals from extended downtrends.

In conclusion, my optimistic outlook pushes me to look at the Swing Signals as a leading indicator and predict the market is about to see a bounce. Maybe it's just due to being oversold, but it looks like a bounce is starting nevertheless. Let's hope it's not just a dead cat bounce...

Using the signals --

As a humble practitioner of technical analysis, I admit that every signal can't be correct. Alert HQ can, however, provide a filtered selection of likely candidates from which investors can choose. Remember, 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 may provide some good trading ideas.

Terrible Tuesday - Swing Signals, Trend Busters and Trend Leaders for July 7, 2009

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

Today we have the following:

• 35 Swing Signals -- 17 BUY signals and 16 SELL Signals plus 2 Strong BUYs.
  
• 98 Trend Leaders, all in strong up-trends according to Aroon, MACD and DMI. We have 22 stocks that are new additions to the list and 120 that fell off the previous list.
  
• 40 Trend Busters of which only 9 are BUY signals and 31 are SELL signals.

After last week's sell-off, a terrible Tuesday leaves stocks broadly lower --

Well, today resulted in another shrunken list of Trend Leaders. On the weekend we had 157 stocks and ETFs on the list; after today we're down to 98. Whereas a few weeks ago there were around a thousand, lately we are bouncing around in the one to two hundred range.

Similarly, our Trend Busters list reflects similar weakness as the breakouts to the downside outnumber the breakouts to the upside by roughly three to one.

Our Swing Signals list is about evenly divided between BUY signals and SELL signals but the list is none too long. These last few days there has been no where to hide.

With the trends in the major market averages pointing downward now, it's no surprise that our BUY signals are missing in action. As we approach significant support levels, another couple of bad days and investors might really start running for the exits. My recommendation is that you have your stops in place and maybe a couple of short plays in mind. This could be a time when some of our SELL signals will come in handy. We shall see...

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 may provide some good trading ideas.

Making it easier to calcuate stops for leveraged ETFs

Markets are fluctuating and leveraged ETFs are gyrating. If you own any of these ETFs, have you examined your stop levels lately?

Back in April I introduced the TradeRadar stop calculator. It emphasized the fact that leveraged ETF performance is driven by the action in an underlying index. It was pretty basic in that it translated movement in the underlying index into changes in the leveraged ETF but it required the user to determine the appropriate underlying index or ETF and to enter most recent prices as well as target stop levels.

Major improvements --

I have now rectified some of the major weaknesses and made the calculator a lot easier to use. Here are some of the new features:

• All the ETFs from ProShares and Direxion are now listed in a drop down. Pick a leveraged ETF and the calculator automatically identifies the appropriate underlying index or ETF that is based on that index.
• The calculator retrieves the most recent prices for both the leveraged ETF and the underlying index or ETF and populates the form automatically.
• The calculator automatically detects whether the leveraged ETF is 2x or 3x and whether it is a long or short ETF.
• When trying to determine stops, it is very helpful to be able to see the chart of the leveraged ETF and the underlying index. The calculator automatically creates two links to the StockCharts.com site. In separate windows or tabs, a user can now display a chart of the underlying index/ETF as well as a chart of the leveraged ETF.

Ease of use --

Since I use the TradeRadar Stop Calculator myself, I think I've been able to identify some of the major shortcomings and, hopefully, address some of the major aspects of ease of use. Essentially, the calculator retrieves all the basic data needed to set up the calculation. It is up to you, however, to use the charts to determine an acceptable stop level on the underlying index. The TradeRadar calculator takes it from there.

If you haven't seen the TradeRadar Stop Calculator before, check it out. If you have used it before and found it lacking, I urge you to take a look at the new version.

As always, feedback and comments are welcome.