The problem is that crashes occur from oversold conditions and the last 30 minutes dump were shouting danger for Monday. All in all, I am not at all negative. I still think that the US market is the best place to be invested, but we need to first go through this wave of fear selling.
So, WNR is still interesting here, if the market does not collapse. I'll buy a pull back in the support zone.
On Friday, I increase the EDU short at its second weak bounce. EDU is a stellar Chinese stock. Stellar means that it has everything for it. But whatever is traded for money in China can be easily manipulated. So I believe that the EV pattern tells us the truth.
The problem trade on Friday was RAX. I anticipated a short RAX signal early in the day, but after I shorted, the stock failed to gain momentum on the down side and large players started to move in. This is the reason why I covered the short as I was expecting a bounce against the position.
The fact that RAX fell below the short level and issued a short signal when the whole market went down at the end of the day does not change anything to the trade execution.
The portfolio is now 20% short.
You can see below that most of the short on a bounce idea did work well on paper yesterday. The TSO long idea failed though. This indicates a market that bounced a little and then failed again.
The trade ideas for Monday are below.
You will note that the system brought mostly short ideas because this is the main trend.
However, I am most interested in buying oversold stocks, but only if the market moves in that direction.
I want to point here to two long ideas: FTI and INFN. Both were picked by the system as a short "Bounce after a break down on volume" (BBDV).
You can see below that stats look good for such a trade (BBDV) on FTI.
FTI is an oil service company (20,000 employees).
The company makes good money if oil customers want to externalize more jobs. So if oil price is down, investments are down and you need less service. But still, the company is profitable.
We can see below that Large investors are piling into this company. Not a good idea to short I believe.
Hence, I tested buying an oversold level and indeed, it shows great prospects.
I understand that such a trade would go against the general market. Hence, I will enter it only if I see some evidence of a reversal on Monday or later in the week.
INFN Is a much smaller tech company (communications.) It has pulled back in recent weeks and might have some reporting issues which makes investors nervous. Oversold here and could clearly be more oversold.
Looks like a buy candidate IF the market bounces.