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CGTS DAILY REPORT: FRIDAY 28 AUGUST 2015

Yesterday we looked at our EMV Trading System's daily report. Today, let's look at our daily CGTS PROP 10 TRADING SYSTEM. We are still testing this system. As we said yesterday, using the PROP 10 System, issues giving a PROP reading of -7 or above are potential buys; those giving a PROP reading of less than -7 are potential sells.

Our PROP 10 trading system requires a reading of +10 for a buy; a downturn of the PROP 10 results in a sell signal; a reading of -10 gives a shortsell signal; and an upturn in PROP 10 closes the short position.

Here is today's PROP 10 report, sorted by PROP, low to high. In the LOW ZONE, from -25 to -7, we look for signals that confirm the position. For instance, we are short the two issues at the top of the report, both First Solar and US Steel. We went short last week.

There is only one new position today in the PROP 10 Report: LONG AVEO, Aveo Pharmaceuticals.

AVEO has tested very positively using PROP 10:

Column1 Column2 Column3 Column4
Test Range: 5/27/10 to 8/28/15  
       
Net P&L: 37.44  
Percent Net P&L: 466.83%  
       
Number of Trades: 14  
Average P&L per Trade: 2.67  
Percent Winning Trades: 100.00%
       
Total Days in Test: 1291  
Percent Days in Market: 89.62%  
Average P&L per Day: 0.03  
       
Max Drawdown: 4.35  
Reward/Risk Ratio: 8.607  
       
Buy & Hold P&L: -6.60  
vs. B&H P&L: 44.04  
vs. B&H Percent P&L: 549.13%  
vs. B&H Reward/Risk Ratio: 8.935
       
Current Position: Long  
Open Trade P&L: 0.00  
Traded Last Day: Enter Long  

Low-price stocks are usually relatively short-term trades using this trading system. AVEO looks good. We especially like the shape of T5 Simple, second pane down, with higher highs and higher lows.

Here's the report. Remember, when reading this report, it is not enough that an issue be in the BUY ZONE for the PROP 10 Trading System; it must hold the BUY ZONE and climb to +10 to generate a buy signal.

Column1 Column2 Column3 Column4 Column5 Column6 Column7
CGTS PROP 10 SYSTEM          
8/28/15       PROP 10 New position New position
Symbol Company Close PROP 10 POSITION TODAY YESTERDAY
FSLR FIRST SOLAR 47.79 -25 Short    
X US Steel Corp 16.78 -25 Short    
DWTI * Crude Oil Bearish ETF 3x 123.32 -23 Flat    
NUGT * Gold Miners Stocks Bullish ETF 3x 3.42 -23 Flat    
RUSS * Russian Stocks Bearish ETF 3x 38.11 -23 Flat    
BCRX BioCryst Pharmaceuticals 11.42 -19 Short    
^VIX CRB Volatility Index Daily 26.15 -19 Flat    
EWV Short MSCI Japan ETF Daily 50.33 -19 Flat    
^SSEC Shanghai Composite 3,232.35 -17 Flat    
EPV Short MSCI Europe ETF 57.68 -13 Flat    
^HUI Gold Stock Index Daily 116.116 -11 Flat    
CM Canadian Imperial Bank of Commerce 72.93 -11 Flat   Exit Short
SSYS Stratasys LTD 30.02 -9 Short    
CURE * Healthcare Stocks Bullish ETF 3x 34.15 -7 Flat    
DRN * Real Estate Stocks Bullish ETF 3x 62.8 -7 Flat    
DUST * Gold Miners Bearish ETF 3x 25 -7 Flat    
GDXJ Gold Junior Minors ETF Daily 20.48 -7 Flat Exit Short  
JDST * Junior Gold Miners Bearish ETF 3x 9.321 -7 Flat    
SHAK Shake Shack 50.61 -7 Flat    
UMDD * Midcap Stocks Bullish ETF 3x 53.07 -7 Flat    
EOG EOG Resources 77.31 -5 Flat   Exit Short
FAS *Financial Stocks Bullish ETF 3x 28.37 -5 Flat    
FAZ *Financial Stocks Bearish ETF 3x 11.93 -3 Long    
BRZU * Brazil Stocks Bullish ETF 3x 24.94 -1 Flat    
CLR Continental Resources 30.88 -1 Flat    
DZK * Developing Markets Bullish ETF 3x 54.83 -1 Flat    
EMES Emerge Energy Services 16.48 -1 Flat    
ERX * Energy Stocks Bullish ETD 3x 31.83 -1 Flat    
JPNL * Japan Stocks Bullish ETF 3x 48.97 -1 Flat    
MATL * Basic Materials Stocks Bullish ETF 3x 42.29 -1 Flat    
MNK Mallinnkrodt (Biotech) 89.93 -1 Flat    
NFX Newfield Explorations 31.6 -1 Flat    
SCTY Solar City 48 -1 Flat    
SNDK SanDisk Corp 52.27 -1 Flat    
SOXL * Semiconductor Stocks Bullish ETF 3x 22.29 -1 Flat    
SPXL * S&P 500 Bullish ETF 3 x 77.58 -1 Flat    
TECL * Technology Stock Buliish ETF 3 x 31.38 -1 Flat    
TNA Direxion Daily Small Cap Bull 70.33 -1 Flat    
TQQQ * Nasdaq (NASDAQ:QQQ) Bullish ETF 3x 98.57 -1 Flat    
UDOW * UP DOW ETF 3x 57.03 -1 Flat    
UPRO * S&P 500 Ultrapro ETF 3x 58.61 -1 Flat    
URTY * Russell 2000 Bullish ETF 3x 81.93 -1 Flat    
AVEO AVEO Pharmaceuticals 1.42 -1 Long Enter Long  
ALNY Alnylam Pharma 109.07 1 Flat    
AR Antero Petroleum 25.24 1 Flat    
BBL BHP Billiton 34.81 1 Flat    
DRYS Dry Ships Daily 0.44 1 Flat    
GASL * Natural Gas Stocks Bullish ETF 3x 6.52 1 Flat    
HAL Haliburton 38.59 1 Flat    
JNUG * Junior Gold Miners Bullish ETF 3x 8.99 1 Flat    
SINA SINA CORP 38.74 1 Flat    
UWTI * Crude Oil Bullish ETF 3x 1.195 1 Flat    
WLL Whiting Petroleum 17.6 1 Flat   Exit Short
BHI Baker Hughes Daily 54.72 3 Flat    
BHP BH Billiton LIMITED 36.69 3 Flat    
ISIS Isis Pharmaceuticals 51.54 3 Flat    
MTL Mechel Open Joint Stock Company 1.08 3 Flat    
VNR Vanguard Natural Resources 9.62 3 Flat    
FCX Freeport McMoran Mining 10.5 5 Flat   Exit Short
FINZ * Finciancial Stocks Bearish ETF 3x 21.93 5 Flat    
DGAZ * Natural Gas Bearish ETF 3x 6.04 5 Long    
VXX VIX ETF 25.86 5 Long    
RUSL * Russia Stocks Bullish ETF 3x 16.48 21 Flat    

You may notice a couple of anomalies here: FAS, Financial Stocks Long, and FAZ, Financial Stocks Short, are both in the BUY ZONE. What's up with this?

First, let's look at FAS, the bull picture. Note the horrible shape of the T5 Simple, 2nd pane down. Lower lows and lower highs. This makes us highly suspicious of this reading -- we believe it will be short-lived. Look at how weekly the PROP reading pierced the BUY ZONE.

We are short the financial stocks. We bought call options on FAZ last week, expecting more selling of financial stocks.

FAZ gave a buy signal last week -- but these 3x ETF's are wildly volatile. The current picture suggests that FAZ will hold the BUY ZONE, and FAS will falter and fall back. Time will tell.

Let's look at oil. We sold our bearish oil position DWTI with a nice gain. Oil rallied hard. But is oil 'back'? Our thesis is that oil will decline as long as the US Dollar advances. A US Dollar Bull is an Oil Bear. What do the charts say, short-term?

Despite the big rally in oil, UWTI, Oil Bull ETF, is not giving a buy signal. In terms of the PROP 10 System, UWTI is still negative; and if we zone in to look at the T5 Simple trend, UWTI is still making lower lows and lower highs.

We do not believe that the oil rally is the real thing.

Best trading.

MJC, CGTS

cgts@mindspring.com