I have a filter I use that I call the Momo Filter. For the most part, I use the filter to identify what is working. Also, when a certain sector is working, many of the stocks in that sector will show up on the filter, making it easier to catch sector rotation.Â
Many of the names in tonight’s screen are defensive plays, as one might expect. So honestly, the title of this post is a little misleading. There are some other interesting plays the screen uncovered, so I thought it was worthwhile to take a look at those too.
All in all, 135 symbols made the screen tonight. So there are stocks that are working, even in this terribly challenging environment.
Wal-Mart Stores, Inc. [[WMT]] I posted this chart when it broke out in August. Still a beautiful breakout.
PepsiCo, Inc. [[PEP]]
The Procter & Gamble Company The Procter & Gamble Company [[PG]]
General Mills, Inc. [[GIS]] Very nice uptrend.
Covidien Ltd. [[COV]] Volume looks good on this one, but the MACD and CMF are both diverging.
Southwest Airlines Co. [[LUV]] This one might be a good hedge for those who are long oil.
The Medicines Company [[MDCO]]
SYSCO Corporation [[SYY]] Serious accumulation here…
Rock-Tenn Company [[RKT]] Whoa!
Old National Bancorp [[ONB]] I posted this one for The Fly, who left it out of his “banker’s rant” from earlier today. For some reason the name and symbol make me think of Old Nasty Bancorp, which I find highly amusing.
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Don’t forget “ASS BANK” ASBC.
lol…its not really “working,” so I didn’t include Ass Bank. Although it does appear to be coming off a bottom.
CMF indicator = Chaikin Money Flow??
Yep Boca, that’s right.
I’ve been starting to use that indicator some, replacing the slow stochastics, as stochastics and RSI are very similar measures. CMF gives a different measure that is calculated in a way as not to replicate RSI and MACD.
Thanks, I’d heard of it, and will do some reading on it.
Good finds. The only thing I don’t like is that you forget to caveat that now may not be the best time to bet on momentum follow through on extended stocks.
I’ll contribute though —
even though cramer just reccd it (kiss of death), I’ve liked CVD for a while.
I know you already tapped that ass. That was a good call. Some of those biotechnical burritos havent totally failed either
Danny, looking at some of the defensive stocks, they have not paused much, despite what the market has done. That was sort of the point.
The momo ones are just interesting to see what is working and to see that there are still lots of opportunities to chase momo and breakouts. I would not buy them after closing up X days in a row with RSI at 99.99.
I’m still in CVD. I set an ATR multiple stop from a recent high and it has not yet been hit. I’ve pretty much quit any sort of trend following plays, except for CVD. I’ve got nice profits in it.
Funny you should bring up the bio-tech burritos. Some of them showed up tonight on the momo screen.
Oh yeah, CVD was brought to my attention by Phil from Bra-sil, who has not been seen much lately. Hope he’s okay.
Phil commented right above you on that incredibly awesome clown rape post.
Re: biotech — my screens too.
Re: “The momo ones are just interesting to see what is working and to see that there are still lots of opportunities to chase momo and breakouts. I would not buy them after closing up X days in a row with RSI at 99.99.”
I know this. I know you know this. Maybe not all readers know it. You have a good track record, you never know, they might buy them (thus my original suggestion of a caveat)
You know how pet peeves that rub you the wrong way are just like “ah, I gotta say something about this”? I hate when cramer profiles a stock, or for instance, declares that the homebuilders have bottomed, only to come out the next day and say he didn’t mean for you to buy the stocks. That doesn’t make any sense. Don Harrold did a great video about that.
Now I know you never said “buy these” but by virtue of posting them, the inference is there that you think these can go higher. If not, you’ve just profiled what worked, not what will work which is what is more important. Now, don’t take that as a diss, because I am interested in the market and your work, no matter what, but as resident line drawer, I want to know what you see going forward. Nome sayin’?
I have a problem with pet peeves were I feel compelled to complain. I know what your intentions were, and I know you aren’t buying these on the open tomorrow, so I hope you can forgive my forced rant which is relatively douchey in nature.
Danny and Wood,
Been very busy with work lately — so I’ve been absorbing more than contributing here as of late, which is unfortunate. But I’m not dead. 🙂
As for the markets, I just can’t muster the conviction to buy anything right now. I had a LM short I covered into the 50-day today in the morning and that’s about it. I’m 100% cash now and have been trading smaller size lately given how oversold we’ve been on the weekly charts.
For the most part, I’ve been chopping in and out of stocks that I despise fundamentally — selling rips one day and covering one or two days later. It has been working, but I have a feeling the market is now getting ready to rip higher to the 12,000 area before turning around and gunning through 52-week lows.I’m especially cautious given our proximity to options expiration next week. Weird, dysfunctional shit always happens ahead of opex. In light of oversold conditions, that weirdness could turn out to be a surge higher — prompting all short-sellers to cover.
Based on the fact that September is historically bearish (according to Trader’s Almanac), that October is the anniversary month for a few crashes, and that we’re in a bear market, I suspect that this month or the next will be sitting nicely in the negative column when all is said and done. Right now, however, we’re only down a measly 0.5% for September (on the DOW).
Again, don’t ask me why. The tape feels like it wants to suck some retail money in up to 12,000. That type of action would also fall in line with what we’ve seen all along (remember the January and March “lows”?). This market has a tendency to “rip higher” for a few weeks (sometimes months) after significant events (think the January surprise rate cuts and Bear Sterns) and sucker everyone into thinking the worst is behind us (I recommend the awesome post in the Peanut Gallery tonight for added “color” about how institutions and retailers alike keep getting raped by the market clown).
Once we revisit 12,000 (again, might or might not happen, but it’s the scenario I’m working with), I will start reshorting deadcat financials and looking for fresh ideas on shorts or other stocks that have disappointed (earnings, news).
One top pick which I’ve been range-trading (always on the short-side) lately is AMZN. At 60 times earnings, with gross margins declining (per latest quarter release), and sales reliant on China (which is dead), it’s my favorite tech bear now that CRM is technically defunct and oversold (though I also like CRM in the 61 to 63 area). CRM, which will get added to the SP-500 in the place of FNM, popped today. Expect more short-term upside. It reminds me a lot of MA. On July 14 or 15, MA released news above getting added to the SP-500. The stock rallied for 2-3 days to the tune of about 15%, then began to roll over and crater. CRM will have a similar fate (especially given the ungodly quarter they just reported and their clownish valuation). At 61, CRM will be just below the 50-day and 200-day, retesting neckline resistance (from it’s 9-month-long H&S pattern). I like that. But again, I like AMZN even more given how quiet and cozy things have been over there.
Back to the bigger picture on the markets… 12,000 DOW is also a beautiful neckline retrace of what is now a massive H&S. I like that risk-reward. The entry-point is clean and stops will be tight. At that point, I’ll be looking to get long DXD, SRS, SKF and a number of stocks I dislike — with manageable stops, of course.
Just my thoughts on where we stand.
-Phil
People keep calling for counter-rallies to 12,000 about as often as they call the housing bottom.
Keep dreaming.
hey Woodshedder, I sure wished you would have stopped by and seen my blog yesterday.
I nailed both GDX and GLD bottom.
You should check out the charts.
zee
Zee your blog sucks so fucking bad, when I visited I had an epileptic seizure and virulent diarrhea for a week. DT’s blog looks like the Sistine chapel compared to your jumbled eastern euro pile of crap.