Stocks This Week: Sell Short American Electric Power

The second quarter in the year that is two years past the election has been the weakest quarter of the year since 1885. If we also look at the decennial pattern, this is a year ending in a two. This adds to the bearish tone of the entire quarter. Stocks may trade up early in the week, but lower prices are due by the following week. Here is a short sale recommendation.

From April 29 to May 9, American Electric
AEP
Power has risen only 7% of the time over the last 41 years. The average decline has been small because this is a utility stock and has not been very volatile. However, the utility sector has been stronger than usual, so the stock is more elevated than usual creating some downside risk. The weekly cycle has peaked and has been accurate in all five sell signals in the last year. The monthly cycle has also turned down and has also been correct in all three signals.

Weekly Cycle

Daily Histogram for May

Blue: Average Percentage Change

Red: Probability of a rise on that day

Green: Expected Return (Product of the first 2)

AEP Daily Graph