November has been an exceptionally difficult month for markets as concerns over of the fiscal cliff, changes to tax code and uncertainty surrounding President Obama’s policies for the next 4 years loom. Prior to yesterday’s rally, let’s take a quick look at how the markets are performing for the month of November and the impact on year to date performance for 2012:
As outlined in a recent letter to Breaking Up subscribers, these ALERTS! have been difficult to find as during a broad based sell-off, even the best of the best get pummeled. This is why it has been important to keep stops tight and continue to seek out only those positions that have the highest probability of upside potential. Breaking down and Pro-Package subscribers found quite a few shorts in October that were profitable prior to the downturn in November. However, we did witness a short-term change in sentiment as the Key Reversal Indicator turned oversold on Thursday of last week. Since then we have seen stocks rally north of 2.5%.
ALERTS! have largely not been an exception to avoiding the downside as we have had many positions stop out for losses during the month of November. It is important to keep in mind however that broad based sell-offs / corrections are difficult to sidestep. Persistence should pay off as during this sell-off, opportunities are being created for both greater downside and also recovery potential in individual names.
Despite the sell-off, some of our still outstanding Breaking Up ALERTS! remain in positive territory. If we witness any kind of across the board buying, these names should really look to sky rocket as they have exhibited the utmost strength in a poor environment.
Winners have been a bit thin since the last Rundown, but losses have also been mitigated:
- Zumiez (ZUMZ) – Breaking down ALERT! on 10/26/2012 resulted in an 11.88% gain in just 2 days of trading.
There are still several positions outstanding, and while we have seen some of the Breaking Up ALERTS! thin out due to market conditions, we are still finding plenty of set ups for when and if the market should turn. As of right now, broad based markets both domestic and abroad are in downtrends with the exception of Bonds which continue to stay relatively strong.
In this edition of The Rundown, we continue to look at the more recent ALERTS! and their various performance measures as well as highlighting some of the newest ALERTS! that have recently triggered.
Below is a table showing the ALERTS! that are still active.
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For those with the Breaking Up package only, ALERTS! have been somewhat rare in the month of November. Once again, this has actually been a good thing as markets have been in a downtrend for the past several weeks with the indices all in negative territory for the month of November:
As discussed previously, losses have been limited to an average of approximately 3-5% while we still maintain the goal of producing gains in excess of 10%. Many of these positions have exhibited further downside despite being stopped out and therefore it is important to stick to the rules in order to give yourself the best possible chance for profitability.
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As you will see in the report below, it is fairly rare that a position lasts the full 30 days before stopping out or taking profit. Stops are intended to limit downside risk and profit targets are set as points to maximize upside. The targets are based on algorithms that help to determine where there are areas of key support or resistance. It is important to follow these guidelines in order to maximize the potential return for each position.
In the report below you will also see positions that are in blue, similar to the table above. These positions are those that have not reached their stop or profit levels and have not become stale after a the 30-day max holding period.
It is important to note that these are closed ALERTS! through November 19, 2012.
Download/view the full report below…
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