Following the first 30 minutes of trading on Friday, it appeared that the market was finally ready to start a meaningful pullback. Oh how quickly things change in a strong uptrend. Stocks found their lows around 10 AM and rallied to their intraday highs around noon. After a slight pullback off those highs stocks tried to rally into the close but reversed the nice sized gains just before the closing bell. That being said, stock indexes rallied back immediately following the closing bell. All in all, it was a good intraday session with another good intraday reversal on higher volume. The lack of follow through to the early morning selling is a testament to how strong this market is right now.
This uptrend post-Brexit has been impressive and surprising on so many various levels but one of the constants during this entire rally has been the performance of our new long positions. Every single long position that I take continues to work either immediately or at least fails to fail immediately. This finally changed on Thursday and Friday as ANIK, CSGS, CIR, and KRA all failed. ANIK was taken the morning after earnings and CIR and CSGS was taken just before earnings while KRA gapped below my final cut loss level following earnings. When you remove earnings related failures, every other long position (and there have been a ton!) is still working. This is something we have not seen since 2013. When new long positions fail not related to earnings, then I am sure we will have a problem. However, until then, I am going to continue to take long signals as they are triggered.
This is why this weekend you see six possible new long positions. All of the new long positions are CANSLIM quality stocks with two qualifying in my Perfect Speculator scans and one being a past qualifier of my Perfect Speculator scans. These are all high quality long positions with excellent potential reward to risk ratios. I am going to work limit orders on every single one of the positions as I want to make sure that I do not pay up for stocks with the market being so overbought on the short-term. I would rather get the prices I want and keep my risk in check instead of buying these stocks at any-old-price and regretting it if they decide to pull back in with the market. If this market was not so overbought I would say swing for the fences. As it is, careful market operations are still recommended here. To take a free trial and see the new six potential long positions register here.
I am going to keep this weekend update short as I am very busy this weekend with various projects. Everything is steady as she goes for now. We are overbought and should expect a pullback sooner than later. However, the market can continue higher in overbought territory longer than the shorts can stay solvent. That means no top calling. Leave that to the “professionals” on CNBC. We shall see if the rally can continue into the new trading week. Great luck in all of your trading and I will see you back here on Monday. Aloha!
TOP CURRENT HOLDINGS – PERCENT GAIN SINCE SIGNAL DATE – SIGNAL DATE
EBIO long – +191% – 5/26/16
CLR long – +134% – 2/11/16
GRAM long – +95% – 4/1/16
SIMO long – +50% – 3/11/16
HBP long – +45% – 3/28/16
ALRM long – +39% – 3/1/16
EBIX long – +34% – 3/17/16
FCPT long – +32% – 2/29/16
GENC long – +31% – 2/26/16
JPEP long – +29% – 5/25/16
APLP long – +28% – 3/31/16
ABMD long – +26% – 3/29/16
