Banana Stew

A Sharper Looking Signal?

My Director of Marketing (the suit in the header) doesn't think there is any room for bulls and bears in a stock market blog. Hence the new Cheetum market indicator in the left sidebar. Strange how the picture seems larger now. Almost makes my photo look tiny in comparison. Stay tuned.

CMI 2.0 Update

The market is allowing some padding to the year-to-date gains. Seems like that is what is needed to protect that 20% gain from the first two trades of the year. Now approaching 30% for the year, and since I'm not superstitious, the high for the year was just over 40% before being crushed at the end of April. Some minor safeguards have been put in place to try to prevent "wrong directionitis". I'll stick with my earlier CMI end-of-year prediction since it wouldn't be fair to keep adjusting it up and down.



Banana Stew

As a young chimp, I spent several years creating stock screeners for swing trading...with no regard for market direction. I have a much greater interest in overall market direction now but still occasionally dabble in the black art of single stock selection screeners. Since the CMI is on automatic pilot right now, I have been working on a screener that I call "Banana Stew". Jokingly, I call a lot of other stock selection filters that contain a multitude of parameters, including the kitchen sink, banana stew. More is not necessarily better.

Although this is a work in progress, I'll do the wrong thing and post the two hits that popped up today. I'm not proud...or tired, as Arlo Guthry once said. The screener is supposed to pick stocks, at key market pivot points, that produce gains of 3 to 5% at minimum within five days or so. The idea is to take the small gain, and move on until the next pick, or get a stop underneath and let it ride. Frequency of usable picks is about one (or one group) per week, on the long or short side. The market dictates the frequency of picks and the direction. The recipe for the stew includes recent rate of change, 10 day history, and lower lows for long picks (higher highs for short picks). All this is supposed to allow the screener to pick the stocks that are ready to return to the path of least resistance after being pushed in the opposite direction for a few days.

The stew may be a little spicy since today's long picks were DPZ, Dominos Pizza, and BAS, Basic Energy Services. These look a little sluggish but I'll record tomorrow's open and let these two "not ready for prime timers" simmer for a few days. I'll wash it down with a slice of humble pie if they tank.