Lots of breakouts, lots of setups, indexes are a tad extended on the daily timeframe.
There was a LOT of bullishness last week. The indexes closed near their highs for the week. Most stocks breaking out ran. And the number of stocks making new highs not only hit triple digits, at 138 its the most we’ve seen since February!
Taking the new highs ramping up in conjunction with the fact that the indexes are just breaking out and have not yet hit fresh highs is bullish.
Looking at the Universe List, 21 of the roughly 150 stocks on it were setting up. Of those setups, 10 were good enough to go through the Trade Gauntlet (our proprietary stock rating tool that like the name implies, puts trades through the gauntlet!). 4 out of the 10 stocks scored above a 7 which is fantastic! One even scored over an 8, the first time I’m seeing that happen!
Does this have me feeling bullish? Of course! Am I mortgaging my house and going all in?? NEVER! Our job isn’t to take risk. It’s to manage risk!
Given current market conditions, I’m willing to have between 3-4% of trading capital at risk.
Powerful setups all around this week. Our strongest are ZM (scored an 8.6), TSLA (7.65) and RH (7.64).
There were a number of others that scored well on the Trade Gauntlet as well. I should also point out that the Trade Gauntlet is ultimately a reflection of trading beliefs. The higher the score, the more closely aligned the trade is with the beliefs. This serves as a check on ourselves that we’re trading in line with our beliefs and not ‘getting swept up in the moment.’
Here’s the link to this week’s notes: https://docs.google.com/spreadsheets/d/10Bh7n1muVXwaH5GT9hLXEJuNpCik9qbyMe7a8584xZE/edit?usp=sharing
A couple of notes on the sheet:
- We’ve added ‘TRADE GAUNTLET NOTES’. This will show you all of the criteria the idea met! Roll over the cell and to see this notes box.
- The ‘notes and game plans’ cell was getting too long so I tightened the cell. To see all the info, double click the cell.