Market is still well!

And: I love wallstreetcourier.com

So first of all, this market is still well. The pullback is healthy.

I am using two services that I like (tried probably 50 or so) that I would like to point out here:

https://premium.nextbigtrade.com

and

wallstreetcourier.com.

Both align with my o.k. bullish view (right now, might not be the case in the future).

Wallstreetcourier.com is really what I was looking for (I am not affiliated with both, so if you sub, I do not (!) get a kickback):

It is a service (like https://premium.nextbigtrade.com) that is looking for price, breath and sentiment action.

They both do not (!) incorporate macro data like GDP or inflation.

Look, if you have a billion under investment you need GDP or Inflation data, and you need to have a good prognosis on how they develop. BECAUSE if you want to get into or out of the market, you need weeks for it, not a day!

But if you have a smaller account, you can be in and out of the market much faster. That means you can ride smaller waves.

It was until November 2021 until most macro analysts went bullish again, until then half of the (growth stock) move was already gone (good Canslim Traders where fully invested in May, June based on price action!).

Macro Data is lagging, and the market is smarter than 99% of all macro data prognosis. Sorry to say, but most macro services have been way to bearish during the last summer and also during the last fall. I do not know how this happens, but mostly the abys (2800 on the SPY) was prognosed.

The problem with this is, it affects your trading. So, let’s say there are tons of reasons to be bearish macro wise, but the price, sentiment and breath data is bullish as hell (like around the 5th of January). You will not move a dime into the market if you look at both data sets equally weighted. For me its price, breath and sentiment first, if macro aligns fine, if not, price action beats everything. I know this is hard to (because you will be pretty alone with your bet!) do, but I will try!

What I like about

https://premium.nextbigtrade.com

is that they have both eyes on breakouts. Like now breakouts are working well even when indices are consolidating. That in itself is a strong (right now bullish signal). Also

https://premium.nextbigtrade.com points out “hot themes” (that might work for months or just weeks). For example, they called out the China Rally very early on and they have been pointing out the AI theme before (!) the Stock C3.AI broke out like a monster!

Here is my (!) reasoning why the market is still well:

·        lots of breakouts and lots of breakouts working in higher beta industry groups

·        20 of the top 27 Industry Groups (Cycs and tech) based on 66-day momentum are higher beta industry groups (but stuff like medical care, auto parts, farm products are also in the top 27, but this is still healthy)

·        51 of 56 higher Beta Industry groups are above their 30 Week MA (which needs to slope up for this scan). 85 of 142 of all (!) Industry Groups are above the upsloping 30 Week MA. Those numbers are strong and can be compared to numbers during the after-covid rally.

·        trash breakouts are not working, e.g., the market really distinguishes, that is healthy because that means the sentiment gets not too hot.

·        New highs, new lows look fine.

Breakout trading:

I put in 100s of hours to define my breakout trading (it almost broke me, lol!).

First of all, I decided that I only buy breakouts based on stocks that show good fundamentals. I know I will miss parts of breakouts because of that (and that kills me!). From what I see is that breakouts of stocks with good fundamentals do not go to the moon in no time, but they are usually also not too volatile. I know me, I and what I can trade, too much volatility is not for me.

I use two screens:

While the rank system looks like this:

(yes the valuation part could be one node, I did not find the time to correct this, but it does not hurt ;-)).

So all in all that gives me around 1255 Stocks (around 12.5 % of all US stocks, indluding ADRs!).

I then have different scanners to get my eye on interesting price action.

I finalized that work, so I will include stocks picks again to my blog.

I also look at trading systems and their stocks. If for example high beta gets totally cracy like in 2020 (see the relative strengths in pullbacks?)…

…I will add then to the base list, even if they have not been picked by the ranking system.

Here are interesting stocks (based on above screens and due dillgence in TC2000):