I have read bullish and bearish chatter about both of these instruments GLD (SPDR Gold ETF) and the Euro (EURUSD). Pimco now thinks Greece is on the skids once again when the European bailout winds down, and many feel that a rally in the U.S. Dollar will press gold prices back a bit.  The talking heads are furiously bobbing up and down with bullish and bearish tomes about gold and the U.S. Dollar. I still believe that the one entity that does not lie at this juncture is a chart, and for that reason I will rely on it first to come to some decent conclusions. They neither get paid by government or networks nor do they have endorsements very often.

I am a bit of a skeptic of both scenarios, largely because the bigger picture still seems to be playing out, but it could be getting dicey for the Euro versus the U.S. Dollar for a bit. As a result, GLD might be under near term pressure also.  Let’s take a quick look from the Fibonacci pattern perspective, with some momentum analysis thrown in.

Let’s look at the weekly chart for GLD. Note that weekly momentum is still bullish, though it is becoming slightly overbought. Regardless of that, the 1.272 extension target of roughly 129.30 is in play, as well as the outside 1.618 extension target of 136.70.

Daily momentum however, is a different matter, showing that it has previously been overbought and is now showing bearish divergence also.  (Note, in interest of time I posted an older chart, but negative momentum was still present this evening despite the failed rally attempt to take out 123.56 on GLD.)  Through last Friday, however, volume has been extremely light. It is indeed possible that GLD could correct back to that original trend line, perhaps to 116.67 and still remain on the longer term weekly uptrend line. If that occurs and the correction ends there, the longer term targets are still intact.

So what about the U.S. Dollar in relation to the Euro? Let’s take a look:

Monthly momentum: Positive

Weekly momentum: Negative (As of 18:00 hours EDT US) 09/09/2010

Daily momentum: Negative (As of 18:00 hours EDT US) 09/09/2010

It does appear that the Euro could indeed begin to weaken in the short run should the daily momentum continue to confirm the weekly momentum in the EUR A0-FX (EURUSD). If EURUSD breaks below 1.24 (1.2390 as shown in a chart I meant to present on Monday but which still represents the potential target), price symmetry could drive the EUR to 1.2131. Is that possible? If more bad news from Greece and other problems in the Euro-zone emerge, it is. It is likely? Only time will tell. A stronger dollar would be bad news for gold bugs as there would be pressure put on GLD and gold.

I think the smart thing at this point is not to chase gold but to wait for Euro weakness (thus dollar strength) to add positions. My server did not store the posts I did late in 2008 and 2009 when gold was in the mid-800s, but those positioned in that area probably needn’t fear some kind of collapse. What one should do now is await support holding around that 116.67 area or just below to look for potential buy points.

With the U.S. Dollar in crisis and the Euro swooning, it seems the vortex to the currency drain and sewer line will have lots of company. That kind of problem causes volatility and that volatility will produce OPPORTUNITY for traders who are patient to look for entries.

For the time being, this will be the new format, showing only the basic U.S. stock index momentum, the bullish reversals in ETFs and bullish reversals in stocks. I will periodically comment on major issues at critical times, but during the time I am attempting to build the algorithm required to download signals from almost 1300 stocks that I have built models for using NeuroShell Day Trader Professional, this is what I will leave you with. Most who have commented (and I have received, thankfully lots of comments with great appreciation to readers) want to see the reversals and not necessarily trade signals I generate. That makes life simpler for me, though at some point I will discuss methodology for building your own models. For now, I will present the data with little commentary. I will always respond to readers’ comments. This blog will steadily evolve as the time I have and the technology I use evolves. Thanks for your patience during this transition.

For 09/08/2010:

                                     $INDU      $SPX         $COMPQ    $RUT

Monthly Momentum   Pos            Pos              Pos            Neg

Weekly Momentum     Pos            Pos             Pos             Pos

Daily Momentum        Pos (OB)   Pos (OB)    Pos (OB)   Pos (OB)

N means neutral, Neg means negative, Pos means positive (OS) means oversold and (OB) means overbought. The value to price estimate (it is not a guarantee, only a cash flow based estimate) can be defined loosely as a multiplier of price. A number higher than one means the stock is undervalued using this model and a number less than one means the stock is overvalued.

Index and ETF I-shares Bullish Reversals (Note: to look up quotes for the Dow Indexes (starting with DJ or DW, add a dollar sign. No dollar sign is required for the ETFs beginning with other letters.) Today’s list includes only those ETFs with a 50-day moving average of daily volume greater than 100,000 shares:

The stocks listed below are ranked by pattern bullish reversals based on a momentum indicator. Each stock by sector is listed with the cheapest stocks on a near-free-cash-flow value/price basis at the top, and more expensive stocks on that basis farther down each sector list (they are listed alphabetically):

None

Stocks that almost passed the neural net screens but just missed: None

Note:  Volume rose on Tuesday, but in the case of the NASDAQ, using IBD’s definition of price action based on volume, Tuesday was a distribution day. Again, no stocks hit my criteria for bullish reversals (definitely not a bullish sign). You may hold the IBD momentum leaders, but realize that many of them are somewhat thinly traded and if news cracks them and they are overvalued on a price/earnings or sales basis, these stocks eventually will be crushed like the rest of the market. If you own them, make sure you have an options or stop strategy designed to get you out of them if pressures build up. I do not want to be pessimistic. I just want you to be aware that in a secular bear market, the earth shifts quickly. If the anchor is not firm, the foundation crack could topple the building that your trading or position portfolio is based upon.

With regard to momentum, daily momentum is becoming overbought, though there is no bearish divergence as yet. What is most critical at this point is that, in the case of the $RUT, monthly momentum is teetering between bullish and bearish, and in all four of the weekly momentum indicators, weekly momentum could turn bearish shortly. Once again, volume and trend will ultimately tell us the near term direction of stock prices, and that bullish projection is quite precarious that this point. Buyers need to stop up, or the longer-term trends will begin to favor the longer term bearish trend tendencies.

Keep your eyes open with regard to the EURUSD as well. EURUSD seems ready to retest a near-term target at 1.2600, as worries over sovereign debt seem to be the flavor of the week. Any failure to take out 1.2733 would seal the longer term test of that 1.26 area (and perhaps below, if things really come unglued). That would affect gold prices (and GLD) negatively. Those positioned in the 840s as the net model dictated in the last year or so are fine from a position basis, but the 116.67 area is a critical area to hold for those long GLD at higher prices. The weekly target of 137 still seems intact, but in the market funhouse, the mirrors can bend and break. Read the charts and not the talking heads. Your trading account will love you for it.

Take care,

DBB

For the time being, this will be the new format, showing only the basic U.S. stock index momentum, the bullish reversals in ETFs and bullish reversals in stocks. I will periodically comment on major issues at critical times, but during the time I am attempting to build the algorithm required to download signals from almost 1300 stocks that I have built models for using NeuroShell Day Trader Professional, this is what I will leave you with. Most who have commented (and I have received, thankfully lots of comments with great appreciation to readers) want to see the reversals and not necessarily trade signals I generate. That makes life simpler for me, though at some point I will discuss methodology for building your own models. For now, I will present the data with little commentary. I will always respond to readers’ comments. This blog will steadily evolve as the time I have and the technology I use evolves. Thanks for your patience during this transition.

For 09/07/2010:

                                     $INDU      $SPX         $COMPQ    $RUT

Monthly Momentum   Pos            Pos              Pos            Pos

Weekly Momentum     Pos            Pos             Pos             Pos

Daily Momentum        Pos             Pos             Pos            Pos

N means neutral, Neg means negative, Pos means positive (OS) means oversold and (OB) means overbought. The value to price estimate (it is not a guarantee, only a cash flow based estimate) can be defined loosely as a multiplier of price. A number higher than one means the stock is undervalued using this model and a number less than one means the stock is overvalued.

Index and ETF I-shares Bullish Reversals (Note: to look up quotes for the Dow Indexes (starting with DJ or DW, add a dollar sign. No dollar sign is required for the ETFs beginning with other letters.) Today’s list includes only those ETFs with a 50-day moving average of daily volume greater than 100,000 shares:

The stocks listed below are ranked by pattern bullish reversals based on a momentum indicator. Each stock by sector is listed with the cheapest stocks on a near-free-cash-flow value/price basis at the top, and more expensive stocks on that basis farther down each sector list (they are listed alphabetically):

Stocks that almost passed the neural net screens but just missed: UEPS

Note:  Well, it is finally after Labor Day, and Friday’s performance, though nice for bulls, was really quite weak again from a volume standpoint. Looking at futures this morning, one would not be expecting strength, yet all 12 momentum indicators are pointing up. It does appear (and if I have time, I will post later) that the next daily trend in the Euro/Dollar pair is bearish perhaps back to at least 1.26, and that should cast a bit of a pall on U.S. equity prices (and perhaps gold and GLD as well). We need patience as traders return to divine the real trends. This can be an active month for portfolio shifts, so we need to keep our eyes open. UEPS is marginally favored as a long entry, but with not quite the statistics required to trade. It is, however, cheap, if earnings estimate are correct.

Strap in, turn on the engines, and let’s get September really rolling.

Take care,

DBB

For the time being, this will be the new format, showing only the basic U.S. stock index momentum, the bullish reversals in ETFs and bullish reversals in stocks. I will periodically comment on major issues at critical times, but during the time I am attempting to build the algorithm required to download signals from almost 1300 stocks that I have built models for using NeuroShell Day Trader Professional, this is what I will leave you with. Most who have commented (and I have received, thankfully lots of comments with great appreciation to readers) want to see the reversals and not necessarily trade signals I generate. That makes life simpler for me, though at some point I will discuss methodology for building your own models. For now, I will present the data with little commentary. I will always respond to readers’ comments. This blog will steadily evolve as the time I have and the technology I use evolves. Thanks for your patience during this transition.

For 09/03/2010:

                                     $INDU      $SPX         $COMPQ    $RUT

Monthly Momentum   Pos            Pos              Pos            Neg

Weekly Momentum     Pos            Pos             Pos             Pos

Daily Momentum        Pos             Pos             Pos            Pos

N means neutral, Neg means negative, Pos means positive (OS) means oversold and (OB) means overbought. The value to price estimate (it is not a guarantee, only a cash flow based estimate) can be defined loosely as a multiplier of price. A number higher than one means the stock is undervalued using this model and a number less than one means the stock is overvalued.

Index and ETF I-shares Bullish Reversals (Note: to look up quotes for the Dow Indexes (starting with DJ or DW, add a dollar sign. No dollar sign is required for the ETFs beginning with other letters.) Today’s list includes only those ETFs with a 50-day moving average of daily volume greater than 100,000 shares:

The stocks listed below are ranked by pattern bullish reversals based on a momentum indicator. Each stock by sector is listed with the cheapest stocks on a near-free-cash-flow value/price basis at the top, and more expensive stocks on that basis farther down each sector list (they are listed alphabetically):

Stocks that almost passed the neural net screens but just missed: SYNA

Note:  U.S. equity markets pushed ahead again on light volume, and awaits the job numbers with bated breath. Note once again that bullish reversals were minimal as the daily momentum approaches overbought conditions. With one exception, the Russell 2000, all momentum indicators are bullish at every level and the Russell is close. I think the most important thing to watch is the weekly momentum after today closes, because we will have a decent snapshot picture as to the strength of any impending rally in September. Yes, history says September is a negative month, but I think it best to understand the precariousness of economic news flow and how that might influence things moving forward. It is probably more important than ever to use charts and not blind statistics to make entry and exit decisions in either direction, short or long. There is a confluence of a potentially near-term weakening dollar, strengthening commodity prices (note the ETF bullish reversal list), and despite the slowdown in economic activity, some energy names that were beaten down earlier this summer. This weekend, with traders interpreting the jobs data and watching the general condition of earnings and the economy, will come back fresh on Tuesday, and we will begin to see the true strength and weakness of sectors and stocks that has been muddled by low summer volume. I hate to be redundant (as I often am), but take that extra day this weekend to sort out your potential long and short candidates and be ready on Tuesday and beyond to act according to the strict dictates of your trading plan.

In the short run, it looks like we are due for a small rally here, but the month of September is young (which is why one might temporarily ignore the monthly momentum indicator in a 3-day-old month). The U.S. equity markets are still teetering on the edge of a pinhead. A strong push in either direction will give us the major theme for the next four months. We need to be patient enough to watch it unfold. Your trading account will respect and love you for your patience.

Take care,

DBB

For the time being, this will be the new format, showing only the basic U.S. stock index momentum, the bullish reversals in ETFs and bullish reversals in stocks. I will periodically comment on major issues at critical times, but during the time I am attempting to build the algorithm required to download signals from almost 1300 stocks that I have built models for using NeuroShell Day Trader Professional, this is what I will leave you with. Most who have commented (and I have received, thankfully lots of comments with great appreciation to readers) want to see the reversals and not necessarily trade signals I generate. That makes life simpler for me, though at some point I will discuss methodology for building your own models. For now, I will present the data with little commentary. I will always respond to readers’ comments. This blog will steadily evolve as the time I have and the technology I use evolves. Thanks for your patience during this transition.

For 09/02/2010:

                                     $INDU      $SPX         $COMPQ    $RUT

Monthly Momentum   Neg            Neg              Neg            Neg

Weekly Momentum     Neg            Neg             Neg             Neg

Daily Momentum        Pos              Pos             Pos            Pos

N means neutral, Neg means negative, Pos means positive (OS) means oversold and (OB) means overbought. The value to price estimate (it is not a guarantee, only a cash flow based estimate) can be defined loosely as a multiplier of price. A number higher than one means the stock is undervalued using this model and a number less than one means the stock is overvalued.

Index and ETF I-shares Bullish Reversals (Note: to look up quotes for the Dow Indexes (starting with DJ or DW, add a dollar sign. No dollar sign is required for the ETFs beginning with other letters.) Today’s list includes only those ETFs with a 50-day moving average of daily volume greater than 100,000 shares:

The stocks listed below are ranked by pattern bullish reversals based on a momentum indicator. Each stock by sector is listed with the cheapest stocks on a near-free-cash-flow value/price basis at the top, and more expensive stocks on that basis farther down each sector list (they are listed alphabetically):

Stocks that almost passed the neural net screens but just missed: JNJ

Note:  Some encouraging news on manufacturing caused a wave of buying optimism and all indexes rallied on Wednesday. What was a bit disconcerting again, was the mix of volume activity. Action in the $COMPQ was pretty brisk, but volume on the NYSE actually dropped from the previous day. I am not a total acolyte of Joe Granville’s On Balance Volume, but looking at Worden Brothers’ study of up-price up volume and up-price down volume studies, the market was a tie yesterday (that is, there was almost as much volume to the upside as volume to the downside, which is not overtly bullish). The other thing that is a bit disconcerting is the very shallow list of bullish reversal stocks above on such an up-day pricewise. Note too that on a 7-day Average True Range (ATR) basis, the $INDU 255 point up-move was not 200% of the 169 point 7-day average true range, so it was not exactly a massively robust day when compared to an aggregate view of price volatility. It was, however, quite impressive in the $SPX where the 7-day ATR is about 19, and the total move yesterday was nearly 31 points. Not quite double, but much stronger on a percentage basis than the $INDU. The move on the $COMPQ was rather unimpressive versus the 7-day ATR at basically 36 when the 7-day ATR is nearly 42. (That would be considered random noise and not that significant). $RUT is basically in the same condition as the $INDU on an ATR comparison (that is, nice move, but not that impressive on a 7-day ATR basis.

Retail, petroleum refining and pipelines, and healthcare still make the bullish reversal lists.

I covered one third of the SID trade before the close and hold the rest with a breakeven stop. I am willing to take profits on partial positions just in case we get into another Jekyll-and-Hyde market move.

I still believe the smart money waits out the weekend, does research on the long and short entries, and prepares an action plan for when traders return. Yesterday was impressive, but still not the bellwether entry bulls may be looking for. Patience is so important right now, even more important that capital, as markets try to resolve the 2004-like deadlock it is in currently.

Take care,

DBB

For the time being, this will be the new format, showing only the basic U.S. stock index momentum, the bullish reversals in ETFs and bullish reversals in stocks. I will periodically comment on major issues at critical times, but during the time I am attempting to build the algorithm required to download signals from almost 1300 stocks that I have built models for using NeuroShell Day Trader Professional, this is what I will leave you with. Most who have commented (and I have received, thankfully lots of comments with great appreciation to readers) want to see the reversals and not necessarily trade signals I generate. That makes life simpler for me, though at some point I will discuss methodology for building your own models. For now, I will present the data with little commentary. I will always respond to readers’ comments. This blog will steadily evolve as the time I have and the technology I use evolves. Thanks for your patience during this transition.

For 09/01/2010:

                                     $INDU      $SPX         $COMPQ    $RUT

Monthly Momentum   Neg            Neg              Neg            Neg

Weekly Momentum     Neg            Neg             Neg             Neg

Daily Momentum        Pos              Pos             Neg             Neg

N means neutral, Neg means negative, Pos means positive (OS) means oversold and (OB) means overbought. The value to price estimate (it is not a guarantee, only a cash flow based estimate) can be defined loosely as a multiplier of price. A number higher than one means the stock is undervalued using this model and a number less than one means the stock is overvalued.

Index and ETF I-shares Bullish Reversals (Note: to look up quotes for the Dow Indexes (starting with DJ or DW, add a dollar sign. No dollar sign is required for the ETFs beginning with other letters.) Today’s list includes only those ETFs with a 50-day moving average of daily volume greater than 100,000 shares:

The stocks listed below are ranked by pattern bullish reversals based on a momentum indicator. Each stock by sector is listed with the cheapest stocks on a near-free-cash-flow value/price basis at the top, and more expensive stocks on that basis farther down each sector list (they are listed alphabetically):

Stocks that almost passed the neural net screens but just missed: COO (passed the nets, but NOT the value screens).

Note:  It’s still all about Friday’s employment numbers and the weekend reaction and analysis. Those IBD 100 stocks might be pointing north, but the rest of the market is a wet noodle with a lot of nervous institutions watching data. Though consumer confidence seems to be improving, the Chicago Purching Managers’ Index slumped. Though some consumer staple and healthcare names made the bullish reversal list, the patterns are weak. I know I get to use my pre-Labor Day excuse to avoid the markets again, but longer term momentum is not the bull’s friend and volume is no one’s friend long or short. COO passed the net screens, but the value screens reject it. For that reason, it will not be traded.

 Again, take the time to review potential set ups and only trade what your trade plan specifically allows. Do not blow up equity for entertainment. The entertainment will only last as long as the trading capital will.

Take care,

For the time being, this will be the new format, showing only the basic U.S. stock index momentum, the bullish reversals in ETFs and bullish reversals in stocks. I will periodically comment on major issues at critical times, but during the time I am attempting to build the algorithm required to download signals from almost 1300 stocks that I have built models for using NeuroShell Day Trader Professional, this is what I will leave you with. Most who have commented (and I have received, thankfully lots of comments with great appreciation to readers) want to see the reversals and not necessarily trade signals I generate. That makes life simpler for me, though at some point I will discuss methodology for building your own models. For now, I will present the data with little commentary. I will always respond to readers’ comments. This blog will steadily evolve as the time I have and the technology I use evolves. Thanks for your patience during this transition.

For 08/31/2010:

                                     $INDU      $SPX         $COMPQ    $RUT

Monthly Momentum   Neg            Neg              Neg            Neg

Weekly Momentum     Neg            Neg             Neg             Neg

Daily Momentum        Pos              Pos             Pos             Pos

N means neutral, Neg means negative, Pos means positive (OS) means oversold and (OB) means overbought. The value to price estimate (it is not a guarantee, only a cash flow based estimate) can be defined loosely as a multiplier of price. A number higher than one means the stock is undervalued using this model and a number less than one means the stock is overvalued.

Index and ETF I-shares Bullish Reversals (Note: to look up quotes for the Dow Indexes (starting with DJ or DW, add a dollar sign. No dollar sign is required for the ETFs beginning with other letters.) Today’s list includes only those ETFs with a 50-day moving average of daily volume greater than 100,000 shares:

The stocks listed below are ranked by pattern bullish reversals based on a momentum indicator. Each stock by sector is listed with the cheapest stocks on a near-free-cash-flow value/price basis at the top, and more expensive stocks on that basis farther down each sector list (they are listed alphabetically):

Stocks that almost passed the neural net screens but just missed: None

Note:  Whuditellya yesterday? (Translated in English: What did I tell you yesterday?) We are in the last low volume scourge of pre-Labor Day trading where the only difference between the good days and the bad days are the point changes and volume means nothing. No one was buying yesterday, as traders, institutional and individual, are likely waiting on the most recent employment numbers (which is a Friday data point) and taking a long weekend (the Monday data point), before hashing out any real trend after Labor Day. I will be watching things over the next few days, but I think you are safe in not doing anything until Tuesday of next week, unless your trade plan specifically instructs you to do something. September may be the most interesting month we have seen in the last decade in my opinion and that has nothing to do with any Hindenburg Omen or anything else. Mutual fund managers are going to be faced with the fact that they must position themselves to maximize their performance numbers without incurring the wrath of some traders worried about capital gains tax increases in 2011 which will force (rationally or otherwise) some individual investors to liquidate their equity holdings. Some of that pressure was relieved by the recent 35.7 billion dollar liquidation over the last month, but I do not think the party is over just yet. September will be a challenge for everyone, no doubt about it.  

Take care,

DBB

For the time being, this will be the new format, showing only the basic U.S. stock index momentum, the bullish reversals in ETFs and bullish reversals in stocks. I will periodically comment on major issues at critical times, but during the time I am attempting to build the algorithm required to download signals from almost 1300 stocks that I have built models for using NeuroShell Day Trader Professional, this is what I will leave you with. Most who have commented (and I have received, thankfully lots of comments with great appreciation to readers) want to see the reversals and not necessarily trade signals I generate. That makes life simpler for me, though at some point I will discuss methodology for building your own models. For now, I will present the data with little commentary. I will always respond to readers’ comments. This blog will steadily evolve as the time I have and the technology I use evolves. Thanks for your patience during this transition.

For 08/30/2010:

                                     $INDU      $SPX         $COMPQ    $RUT

Monthly Momentum   Neg            Neg              Neg            Neg

Weekly Momentum     Neg            Neg             Neg             Neg

Daily Momentum        Pos              Pos             Pos             Pos

N means neutral, Neg means negative, Pos means positive (OS) means oversold and (OB) means overbought. The value to price estimate (it is not a guarantee, only a cash flow based estimate) can be defined loosely as a multiplier of price. A number higher than one means the stock is undervalued using this model and a number less than one means the stock is overvalued.

Index and ETF I-shares Bullish Reversals (Note: to look up quotes for the Dow Indexes (starting with DJ or DW, add a dollar sign. No dollar sign is required for the ETFs beginning with other letters.) Today’s list includes only those ETFs with a 50-day moving average of daily volume greater than 100,000 shares:

The stocks listed below are ranked by pattern bullish reversals based on a momentum indicator. Each stock by sector is listed with the cheapest stocks on a near-free-cash-flow value/price basis at the top, and more expensive stocks on that basis farther down each sector list (they are listed alphabetically):

Stocks that almost passed the neural net screens but just missed: PTNR

Note:  I am not trying to cast a pall on Friday’s rally, but volume was not as strong as it could be given the performance. Once again, energy names, banks, healthcare, utilities, insurance, and transportation topped the list of bullish reversals. I do believe that some kind of short-term rally in energy names is possible. Again, however, we must wait to see a strong volume follow-through. Will that happen today? Probably not, but we are only a week away from Labor Day, so hopefully we will see that rally hit when traders return. Regardless of the number of banks that reversed to the upside today, I am still a bit skeptical of financials. Only time will tell.

Take care,

DBB

I am taking a few days off to play golf and recharge, but here are some quick notes:

Despite the swings in energy raw material prices (crude oil, natural gas), there seems still to be some potential life in things like AAV, APC, CVX. We need to realize that without strong supporting volume, any of the bullish patterns (including those we are seeing now in the $SPX) can be blown though when sellers return.

 I still believe that we need to have some patience before venturing on a swing  or position basis on the long side until we see the breadth of trader activity that will occur post Labor Day. We are likely to see some interesting portfolio moves by investment managers as they scramble for seasonal performance numbers to print on those prospectuses in December (which will have Q3 2010 results in them). Longer term momentum factors are still negative, but we could see change in that depending on economic factors and the mood of institutions to put money to work.

With $35 billion being withdrawn from U.S. mutual funds this month alone, it is hard to see how a recovery (market or economic) is going to occur as consumer confidence dwindles, manufacturing does little more than simmer, and home sales are still weak. We need to keep some perspective when considering being long this market.

We need to focus more on charts and market action and less on the up and down motions of financial media talking heads. These next couple of weeks (and this weekend especially) should be devoted to doing good sector and individual stock research. Being prepared for the next move and being patient with equity is the key to success in trading and investing.

If I get back early enough Sunday evening, I will post some charts on the indexes and currencies as needed. Have a great rest of the week trading and a restful productive weekend.

Take care,

DBB

For the time being, this will be the new format, showing only the basic U.S. stock index momentum, the bullish reversals in ETFs and bullish reversals in stocks. I will periodically comment on major issues at critical times, but during the time I am attempting to build the algorithm required to download signals from almost 1300 stocks that I have built models for using NeuroShell Day Trader Professional, this is what I will leave you with. Most who have commented (and I have received, thankfully lots of comments with great appreciation to readers) want to see the reversals and not necessarily trade signals I generate. That makes life simpler for me, though at some point I will discuss methodology for building your own models. For now, I will present the data with little commentary. I will always respond to readers’ comments. This blog will steadily evolve as the time I have and the technology I use evolves. Thanks for your patience during this transition.

For 08/25/2010:

                                     $INDU      $SPX         $COMPQ    $RUT

Monthly Momentum   Neg            Neg              Neg            Neg

Weekly Momentum     Neg            Neg             Neg             Neg

Daily Momentum        Neg (OS)    Neg (OS)      Neg             Neg

N means neutral, Neg means negative, Pos means positive (OS) means oversold and (OB) means overbought. The value to price estimate (it is not a guarantee, only a cash flow based estimate) can be defined loosely as a multiplier of price. A number higher than one means the stock is undervalued using this model and a number less than one means the stock is overvalued.

Index and ETF I-shares Bullish Reversals (Note: to look up quotes for the Dow Indexes (starting with DJ or DW, add a dollar sign. No dollar sign is required for the ETFs beginning with other letters.) Today’s list includes only those ETFs with a 50-day moving average of daily volume greater than 100,000 shares:

The stocks listed below are ranked by pattern bullish reversals based on a momentum indicator. Each stock by sector is listed with the cheapest stocks on a near-free-cash-flow value/price basis at the top, and more expensive stocks on that basis farther down each sector list (they are listed alphabetically):

Stocks that almost passed the neural net screens but just missed: None

Note:  More weak housing data just added more fuel to the bearish fire and selling volume surged. Telecoms continue to appear on the bullish reversal list, but as futures show this morning, until we see some bullish news on economic data and earnings forecasts, the pall on the market will continue to pressure rallies. All momentum indicators on the major U.S. indices above are headed south. We are approaching oversold levels, but pattern completions would have to happen with momentum reversals before I would get excited about any forthcoming rally.

 All I can say is…hurry Labor Day.  Let’s wait until we get some traders back in the action before taking sides. The sloppiness is not worth the risk.

Take care,

DBB