I took the Sector scan of the Basic Materials this Friday and found some interesting examples of what can be done with a market that is in transition. Basic Materials is a rather large group of stocks that range from oil to gold and steel as well as the fertilizer companies. If you take a look at a scan of the all stocks in this sector you will find that you have a number of shorts that are showing significant profits. Take the scan and filter it with the double reds or very bearish. You get a scan that has102 Winning that are all short and 4 losers. Now if you take the same sector and filter the stocks with double greens or very bullish you get another interesting scan. This scan shows 19 winners and 1 losing and the winners have 18 that are long.
Most of these happened in the last two weeks. You will also notice that the majority of the signals also correspond with a change to the dark red in the industries, which shows retracement in price. The scan showed a 6.87 Profit in an average of 11 days. With margin you were at 14%. Annualized this is 462% or 924% with margin. This is what I am talking about when I refer to Double Greens and Double Reds. If you get the doubles of the same color, the long term and the short term you have high probability trades.
(click on image to enlarge)
(click on image to enlarge)
Soon we will have the calendars on everything, stocks, futures etf’s, forex, sectors, and industries. Then you will be able to see the entries in a backtest fashion.
Another study that proves the power of this tool we call the Wizard.
Gene Stunkel
Founder of the Wizard
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