Larry Connors will be managing money on a full-time basis beginning in 2015. Therefore, this summer will be the final time that he will be teaching his strategies and research to the public.
Starting in July until mid-September, Larry will be teaching his “Top 20 Strategies”.
The Top 20 Strategies represent the best of Larry Connors’ research. The strategies and research are not only what he believes to be the best; they are also the ones that the most number of customers have the highest level of success with.
Larry is hopeful that in teaching these strategies for the final time, you will have the same success.
European stock markets have generally been higher this week after comments from the head of the European Central Bank (ECB) indicated the bank might be inclined to pursue a quantitative easing policy. Last week, ECB President Mario Draghi used his time at the Federal Reserve’s Jackson Hole conference to assure investors and policy makers that the ECB was prepared to use all available tools to fight inflation and revive the sluggish European economy.
The Fed’s own quantitative easing has been bullish for U.S. stocks and the initial stock market response shows that traders seem to expect similar results in Europe. After a sharp two-day rally, most ETFs tracking European stocks are overbought with PowerRatings of 2 or 3. The exception is iShares MSCI United Kingdom (NYSE: EWU), a country that is not a part of the euro zone, and carries a neutral PowerRatings of 4.
Investors looking for short-term trades on international stock markets can look to India. PowerShares India Portfolio (NYSE: PIN) is heading into Tuesday’s trading with a PowerRatings of 8. That is the highest rated country ETF.
PowerRatings are based on the relationship between price and the 5-day moving average (MA) of price. The further prices move away from the 5-day MA, the stronger the tendency to snap back becomes. PowerRatings uses the 5-day MA and several other components to identify high probability trade entry points. This strategy was thoroughly back tested and the history of over 4 million trades was analyzed.
We know from back testing that PowerRatings can be used as the basis of a trading strategy. Detailed back testing has confirmed that the higher the rating, the greater the one week historical gain has been for stocks and ETFs with that rating. For best results, enter trades on stocks with a PowerRatings of 8 or higher with a limit order 3-7% below the previous day’s closing price. Higher % limit entries have historically shown a greater percentage of winning trades but higher % limit orders also reduce the chance of trade execution.
As an example of a trading strategy that can be used, in the past, buying stocks with a rating of 8, on a 5% pullback the next day and selling after the stock closes above its 5-day simple moving average has been profitable 72% of the time with an average gain of 3.9%. Other entries and exits also show high winning percentages and large average gains.
All data is as of the end of day on 8/26/2014.