Did  u  Evacuate  the  Market ?

We were facing a hurricane in the market on Thursday October 4th when there was a major selling by the institutions.  Leading Growth Stock index  $QQQ  trading volume that day was 2 times the average daily volume and it had gapped down at the market open.  By midday there was just as much trading volume as the daily average volume of 40 million shares changing hands.  Index had already dropped down to the 50 day sma(simple moving average) by the end of the day on Thursday.  The carnage did not stop there and we had continued selling volume the next day as well.  By Friday close of the market, the index had dropped down to the 100 day sma.  

We had a  -10.25%   correction in the market at the end of January/beginning of February and again  -8.9%   correction in mid March but it took 9 trading days to get the index down to the 100 day sma.  This time around it took just 4 trading days to bring the index from the 20 day sma all the way down to the 100 day sma.  That was a brutal sell off in the market and as a retail trader/investor, it was time to bail out of the market and start raising  CASH.  At this time it really doesn't matter how good the stocks you have picked are.  One of the rules to follow is to cut the losses and bail out of a stock if the stock has attained a loss of  -5%  to  -6%  and kissing the 50 day sma.  

If you are a Growth Stock trader/investor, its always a good thing to remember that they tend to do twice as better as the general market does but they also fall twice as fast when the market corrects.  We have already gone through a  -9%  correction in the  $QQQ  and now we are at the  200 day sma.  Growth Stocks that took the pummeling last week, are probably down by  -15%  to  -20%  if no defensive action was taken last week to bail out.  You would have to make  +25%  in your next position to break even at this point.

Mr. William J. O'Neil (Founder of Investors Business Daily) has developed rules to follow for traders/investors that utilize his methodology.  Here is a link to the utube video of his interview.  It will help us all learn some sound basic rules to follow when the market goes into a correction mode the next time.  Click on the link below: 

https://youtu.be/IhsrJap6Oj0

Market  Condition

According to IBD (Investors Business Daily), the market pulse has changed to  "Market in Correction"  as of last Wednesday October 10th.  $QQQ  is down to the 200 day sma.  Institutions have to step in and support the market.  Most of the stocks are beaten down across all sectors and a lot of technical damage has been done to the stocks.  Friday was the first day of an attempted rally in the market.  It wasn't quite as powerful in trading volume as the one we had on February 9th.  We need 3 more days in a sequence of a market rally for confirmation that we are out of the woods.  This is the time to be cautious and not take any new positions until we get a  "Follow Thru"  day.  This is also the time to be looking at stocks that have held up during this market break down.  Stocks that have held up above the 30 day sma and exhibiting a strong  RS  line, may be the next leaders in the market.  This  "Follow Thru"  day may not be as strong as the one we had on Feb 14th of this year since so much damage has been done to the leading stocks.  We also have the 3 rd quarter earnings season in session now.

Stocks  to  Study

Lot of Growth Stocks have come down to the 50 day sma and what one ought to look at is a strong bounce off the 50 day sma.  Institutions generally support a stock at that level if they are interested in them.  Here is a list of stocks that have held up and indicating institutional interest.  I have highlighted in parenthesis what I consider to be the resistance point for each of those stocks.  Some are already extended and a bit risky at this point.  It's a good rule of thumb to follow of taking a small position initially during  a  "Follow Thru"  day.  Let the stock prove itself to you that they are worthy of your investment before adding to your position.

1. $CNC     ... ($143.79)
2. $HCA     ... ($133,79)
3. $UNH     ... ($264.30)
4. $IQV      ... ($125.35)
5. $WCG    ... ($303.95)
6. $BSX     ... ($36.45)
7. $ELY      ... ($22.97)
8. $ULTA    ... ($276.78)
9. $AAP     ... ($164.99)
10. $ORLY   ... ($334.02)
11. $WING   ... ($67.62)
12. $PLAY    ... ($62.86)
13. $ROST   ... ($95.57)
14. $TJX      ... ($107.26)
15. $AAPL    ... ($221.85)

Mentoring  Service

Leading Growth Stock index  $QQQ  attained a performance of  +32%  in 2017.  This year it is  +5.5%  inspite of the  -10.67%  correction that we just faced in the last 9 days.  The best 3 months of the mid term election year are ahead of us.  This is the 3rd year of a possible 9 year rally in the market.  Are you getting frustrated that you have been left behind and not fully able to capture the true potential of this unprecedented market rally?  Did you give up most of the gains of  +19%  that we had until 9 days ago?  Nothing should stop you from attaining success in the stock market.  

Schedule a 30 minutes of  FREE  "Discovery Call"  with us.  I will try to get you on board if you are committed to learning our system to Out Perform the Market.  The next 3 quarters historically - mid term presidential cycle year - tends to be some of the best quarters going back to year 1950.  Don't procrastinate and miss out on an opportunity to learn from me.

Happy Trading!

Amin