Gold is getting the bounce we anticipated – what’s next?

On March 30 we warned to stay away from Gold (‘Right now, the best way to play Gold is to stay away‘).  At the time, Gold was trading at $1295 and subsequently dropped $30 to the $1375 range.

We also called for Gold to re-test $1300, and today it did just that.

Our original post outlined some very key factors that would make us go long Gold.  Here is an update on how those factors are playing out:

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Short Waddell & Reed (NYSE:WDR)

The algorithm picked up a strong trading pattern on Waddell & Reed Financial Inc. – the same company apparently responsible for the flash crash of 2010…  and we say ‘apparently’ because this has since been debunked by none other than the high frequency crime scene forensic experts over at Nanex.

This pattern has proven more profit efficiency while long than short, but it seems the stock is quite extended.  It seems analysts gave up covering the company a while ago and there is no recent news catalysts, so perhaps it’s just a correction… we will see…

WDR 240min – click to enlarge

The “I’m Mad As Hell And I Can’t Take It Anymore” Trade

Update: Nov. 29, 2013:  Revisiting this trading pattern for Thanksgiving:   Today was a half trading day and markets continued to melt up… could Monday be the reversal that this setup predicts?


Nov. 11, 2013:  It’s a holiday Monday for most traders today, which reminded us of one of our favorite market psychology studies from Mark Fisher in his book The Logical Trader.

It goes something like this: Give traders 3 days away from the markets to think about how much money they are losing in their current trade, and they will get out of the position entirely on the next trading day.

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Case Study: Is priceline.com a short?

Earlier this month we asked our subscribers to give us the symbol of a stock, ETF or Future contract they are watching and we would run it through the algorithm to see which signals come up.

Priceline.com (NASD:PCLN) was mentioned as a possible short candidate, to which we responded on 11/15:

We discussed PCLN this evening and ran it through the algorithm. It looks like a short, feels like a short, but definitely not a short… yet.

A number of traditional technical indicators however would seem to show that the stock is poised for a correction:

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Closing all positions, moving to cash.. for now (UAL,AVP,PCG,XLF,FLWS,CVX,ADI up 2.5%)

This morning we closed all our open blog picks (6 longs and 1 short) and went neutral on the portfolio for a total gain of 2.5% since September 3, and an overall portfolio gain of +8% since July 30.  In contrast, if you were to buy and hold the S&P in the same period you’d have a loss of about -2% today.

The clear patterns we were seeing in the markets earlier are starting to change.  This is could simply be some large portfolio re-balancing, or it could be the start of a period of volatility due to government shutdown.    Either way we expect many other investors who are seeing the same things we are to take the same action and go to cash.   We do not expect a market crash by any means, but at some point when this volatility is over there will be some good names available at good prices so it’s best just to keep the powder dry.

We are therefore moving to cash until the current environment resolves itself.  During this time we will continue to perform algorithmic scans to identify any new patterns that might be emerging this season.    Brief  commentary on each of our closed positions is below:

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Still long, but Gold needs to prove itself (raising stop)

1 week ago on September 23 we made a very bold call to go long Gold based on a new signal generated by our predictive algorithm.

At that time, Gold was bouncing along new 52 week lows trying to find a bottom, trading below its 200 day average, and the sentiment was overwhelmingly bearish… so who are we – some boutique algorithmic trading consulting firm north of the 45 – to go against the trend calling a Buy on one of the most heavily traded metals in the world?

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Calling the bottom on Gold

Earlier this week we posted and tweeted a warning to stay away from Gold. We did this in reaction to a strong historical pattern our computer algorithm identified which was rather sobering. Many investors know that the current trend in Gold is down, but the question is, how low will it go?

Much has been written about the fundamentals of Gold as an investment and we won’t re-hash it here, but the past year has shown a shift in these fundamentals and perceptions resulting in price volatility, confounding those still looking for a market bottom. This is where our algorithmic signals become a valuable tool in an investor’s arsenal.

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Computer Contradicts Cramer? Long FLWS

We love Jim Cramer (seriously). We read his book ‘Getting Back To Even’ which was released just after the financial crisis, and we were amazed at how well he authored some good practical advice based on strategies that  larger funds use.  He even included a great chapter on stock options that went down like a spoon full of sugar… Jim Cramer really does look out for the small investor, and that’s gold.

Today we decided to have some fun and run the algorithm on some of his stock calls from last week.  We used the screener on thestreet.com and came up with just over 30 stocks in the universe.   Continue reading

Algorithmic BUY signals on Avon (AVP), Financials ETF (XLF)

Our weekly scan of high-probability trading patterns has yielded two good signals on a pair of unrelated companies.  The patterns go  back to January 2013 and yielded a cumulative profit of 20% and 68% respectively.  We are adding these to our performance tracking sheet (as seen at after the charts) to demonstrate the effectiveness of the algorithm, which is the same one that has returned over 75% since May on Facebook alone as shown on our Facebook Stock Predictor page.Continue reading

New BUY signal: Analog Devices Inc. (ADI)

Our algorithm continues to impress as evidenced by the position tracking table below.   Yesterday it generated a buy signal on ADI, confirming a pattern that has shown 35% returns since January.   Confidence is 8/10 and the analysts seem to confirm our computer’s bullish bias…

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Long United Airlines (NYSE:UAL)

We are quite liking this price/volume pattern our algorithm picked up on United Continental Holdings Inc. (UAL) which has shown positive returns since the start of this year (January 4), and our proprietary indicator shows this to be a relatively strong reversal to the upside.  We are now tracking this Buy signal generated on September 6th on our blog performance sheet below.

To get updates on these signals be sure to subscribe to our blog updates using the form on the right side of this page.

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5 things we know about Blackberry (closing short)

Here are 5 things we know about Blackberry:

  1. Prospects for the company as a stand-alone entity appear to be bleak, with shrinking market share and increasingly irrelevant operating system.
  2. Company buy-out seems to be Blackberry’s only hope to turn around their fortunes.
  3. Out of 293 institutional shareholders, 142 decreased their positions while only 115 increased their positions for a difference of about 8million shares or 15%.
  4. We are seeing a large number of Canadian Institutional and Retail traders alike bullish on Blackberry stock, but less enthusiasm for the stock outside of Canada.
  5. The last time we saw this much Canadian enthusiasm for a fledgling former Canadian success story was Nortel Networks.

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Closing ABT, UNH, DUK short trades, going flat

Our algorithm took profits on the ABT and DUK shorts signaled from our August 12 post for 7% and 9% gains respectively, and reversed course on UNH for a 0.5% loss.  Yesterday, the algo generated a buy signal on all three, however due to the dramatic collapse of ABT and DUK (=profit) we will wait for these to base and put in some realistic levels before going long again.

 

 

Closing out BBRY long.. going short

A relatively quick turnaround on the initial BBRY algorithmic buy signal:  The algorithm generated a long signal 2 days ago and suddenly went short this morning at the open as we notified our mailing list members immediately.  The average price for reversing the position was $10.16 for a loss on that last trade of $35.00 (0.39%), as per our tracking sheet below.  The algo is now short at $10.16.

It appears there is a fight between bears and bulls for the $10.00 handle, so some chop can be expected and the Market will decide where BBRY price goes from here.  Our algorithm works on probabilities, and right now it’s saying that based on past trading patterns, BBRY will weaken..  We’ve learned to listen to it over the years, but because this is a short call on a beaten down stock we are lowering our risk level on the trade which reduces the number of shares and thus the amount of capital that is exposed.

If you’d like to be notified of the next BBRY signal just send an email to our listbot at bbry_list@intellikon.com

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DUK collapses after our algorithm’s SELL signal.. is United Health and Abbott Labs next? (DUK, UNH, ABT)

The Intellikon proprietary computer trading algorithm continues to exceed our expectations.

Two weeks ago we posted some strong sell signals generated by the algorithm for Duke Energy (DUK), Abbot Labs (ABT), and United Health (UNH).   We shared these high-confidence signals free to the public as a demonstration of our technology.   Since then, each signal has been very accurate, as per our blog tracking spreadsheet:Continue reading

New algorithmic BUY signal on Blackberry BBRY

One of our analysts pulled an all-nighter last night and developed an algorithm on Blackberry (NASDAQ:BBRY – formerly Research In Motion) after picking up a clear trading pattern.   We’re really impressed with the algo’s accuracy and it generated a BUY signal yesterday.  We’re not really a fan of Blackberry (ever since they stopped producing the thumb wheel), but if there’s going to be a short squeeze in play then this algo should be able to call the upside.Continue reading

Tracking This Week: Abbott Laboratories(ABT), UnitedHealth Group (UNH), Duke Energy (DUK)

It seems July was the month to lock in profit for a lot of the stocks we scanned this week.  These three stood out as potential for further downside with high probability.  Performance of these picks are posted below.

Abbott Laboratories (NYSE:ABT) – SELL

Sell signal generated on 8/7/2013 – opening fill price was $36.06.


UnitedHealth Group Inc.
(NYSE:UNH) – SELL

Sell signal generated on 7/30/2013 – opening fill price was $72.87.

Duke Energy Corp (NYSE:DUK) – SELL

Sell signal generated on 7/30/2013 – opening fill price was $71.40.