Still seeing some really explosive moves in stocks. Need to be a little more selective as not everything is booming, but still a lot are.
Everyone is worried about a correction. That is always a possibility. I try to keep my opinion out of it and just trust a few signals that work a high percentage of the time.
We had a new AD line high back in early June. The indexes tend to follow within a few months. So we will likely see new highs. That signal has a 90% success rate. Not perfect but about as close as one can get in trading. It is the bottom indicator on the chart.
We also had a massive expansion in demand which has left many indicators looking overbought. The number of stocks above their 50-day moving average was above 97% in early June. That looks extreme especially since in March less than 1% of NYSE stocks were above their 50-day moving average!
On the contrary to how it looks, this is actually a bullish signal. Extreme and sharp reversals in sentiment like this are rare. They typically usher in medium to long-term uptrends, not downtrends. See white paper by Lowry Research entitled “Lowry’s Dynamic Demand Expansions After Important Market Bottoms”. This type of extreme reversal has only happened a handful of times in the last 80 years.
If the market reverses, each trade has a stop loss. So I will continue to pound away these opportunities. There is minimal risk with how I trade. Below are my unfiltered, raw watch lists based on the Cup and Handle Stock Strategy.
Not recommendations. This list will get narrowed to likely one or two trades when compared against ideal setups and when comparing to each other for best opportunities and reward:risk.
Some of these are early stages of a possible setup. They need to consolidate more.
US Stock list:
ABBV AU AYX CDAY GAN GFI GSX HALO LLY MGNX NTRA NYT RH SAND TAL TSLA WSM YETI
CG.TO FOOD.TO MAG.TO SEA.TO SSL.TO TFII.TO BLDP.TO (broke out on the 29th. I’m long.) TGZ.TO TXP.TO VGCX.TO
I own a few gold stocks already that have been quite explosive: FSX.V recently got out of after a big run. EQX.TO still holding. ITR.V on a nice rip higher, still holding.
Cory Mitchell, CMT
Disclaimer: Nothing in this article is personal investment advice, or advice to buy or sell anything. Trading is risky and can result in substantial losses, even more than deposited if using leverage.