8-6-2014 Comments

[Mike]

IBD placed the market in correction yesterday. The MarketSchool exposure model also went to cash. Unfortunately in recent history when IBD goes to correction it has been a reliable signal to start back into the market. One of these days we will see a real correction and I have no idea when.

If and when I see leading stocks act well I may venture back in. I have a neutral posture, I own CMG long and I have CTRX short.

My method for testing whether leading stocks are behaving well will be to monitor the Volume Alert Trigger list for stocks that achieve a trigger alert and then advance in price.

The following link will take you to an IBD National Meetup Webinar by Lee Tanner. Lee is an IBD Meetup Leader in Northern California. He was also my mentor when I started investing. The Webinar is about an hour long and is on the topic of sell signals.

http://ibdtv.investors.com/national-meetup-events/711835-ibd-national-meetup-webinar-and8211-july-2014.aspx

[RalphR]

Hi Mike,
My name is Ralph and I just joined your group - thank you. As I understand your method, you look for positive volume greater than any negative volume over the last 10 days, a stock that has come back to it's 50 day, or close, or is breaking above it's 10 ma from a universe of stocks you have selected.

How do you pick your universe of stocks, and is there a list available of your universe?

Thanks in advance, look forward to your posts.

Regards,
Ralph

[Mike]

Hi Mike,
My name is Ralph and I just joined your group - thank you. As I understand your method, you look for positive volume greater than any negative volume over the last 10 days, a stock that has come back to it's 50 day, or close, or is breaking above it's 10 ma from a universe of stocks you have selected.

How do you pick your universe of stocks, and is there a list available of your universe?

Thanks in advance, look forward to your posts.

Regards,
Ralph

Ralph, Welcome to the group.
I don't have a static universe of stocks. Every weekend I run some fundamental screens and select the universe for the week and those are the stocks that you see in the Volume Trigger Alert table. Basically I am looking for stocks with great earnings growth, good sales growth, high ROE, trade more than $20M per day on average. They also need to be trading above the 200-day moving average. Because of the selection criteria about 90% of the IBD 50 and IBD Big Cap 20 end up in my universe plus others that I like.

My regular watch list is a down select from this same universe but they must also be at a recognizable classic base buy point (such as the pivot point in a cup with handle or double bottom base).

[Riskslayer]

Hi Mike,

Did you pare your other 2 names (NCLH & EMES) b/c you could see MEM went to cash and you sold the the weaker names at the close on Tu?

If you were stopped out? do you apply those stops intraday or end of day? Wondering what your wisdom is on stops?

Much thanks,

Shawn

[Mike]

Hi Mike,

Did you pare your other 2 names (NCLH & EMES) b/c you could see MEM went to cash and you sold the the weaker names at the close on Tu?

If you were stopped out? do you apply those stops intraday or end of day? Wondering what your wisdom is on stops?

Much thanks,

Shawn

Shawn, I cut EMES and NCLH to prevent losses from growing and to reduce exposure. NCLH couldn't hold the 50-day, a sign of trouble. Leading stocks at the time were not working. I expect positions that I take to move up. When they don't something is wrong with either my selections or the market.