Follow  Thru  Day

Market had certainty after the elections on Tuesday Nov 6th.  The house went to the Democrats just as history suggested that it might.  In the last 50 years the house has always changed hands during the mid terms to the party opposing the incumbent president in the office.  Market took off right from the start the next day after the elections.  All the 3 major indexes, $DJI, $SPY and $QQQ posted a gain of over  +2.40%  in volume higher than the day before.  That changed the pulse of the market back to  "Confirmed Uptrend".  This was the 4th day of attempted rally and IBD (Investors Business Daily) declared a  "Follow Thru"  day.     

"Follow Thru"  day indicates that a new uptrend is underway.  Most traders are skeptical when this happens especially when the major indexex are trading below the 200 day sma(simple moving average).  Retail investors have a recency bias and cannot believe or trust that the new uptrend is underway.  One has to trust the data of the 4th day of successful attempted rally.  Stocks tend to break out during such periods and its critical to have a stock watch list ready and to start initiating small positions in several of the leading stocks.  Savvy investors look for uptrending RS lines on the stock charts and identify stocks that have an RS ratings above 94.  These stocks offer the best odds in your favour with a new uptrend.

Friday Nov 9th, it appeared that the  "Follow Thru"  day might just fizzle.  We had a  "Distribution Day"  on the  $SPY as well as  $QQQ.  Its always very concerning to see distribution days soon after the market gets a  "Follow Thru"  day.  Looking over the data from 2 years ago when we had a  "Follow Thru"  day after the Presidential elections on November 9th 2016, the market took a couple of days before it found its firm footing.  $QQQ  went on to deliver  +22%  within 6 months after the Presidential elections.  We will just have to take one day at a time this coming week and have the patience and an open mind.  Lets take our clues from the institutional investors because ultimately they are the ones that will decide where the market is going to be heading.

Performance  of  My  12  Stocks

Mr William J. O'Neil (Founder of Investors Business Daily)  has a firm rule about taking advantage of the  "Follow Thru"  day.  He says that:

"You should always buy something on a  "Follow Thru"  day."

He even suggests that you should start dipping your toes back in the market with small positions on several leading stocks.  You will quickly recognize the leaders and the laggards from your positions.  True leaders will break out and race up for quick gains of 2 to 2 and 1/2 times as fast as the general market does.  As a Growth Stock investor and a trader, you want to average up and not average down in the price of the stock.  Within a few days to weeks, you will notice leading stocks race up during a new uptrend.  You quickly want to closeout the laggards and use that capital to invest in the ones that are clear winners.  

Here is the performance of the 12 stocks that were mentioned in my blog post last week.  Virtual trade position on these stocks were taken on Friday Nov 2nd at the market open price.  I have highlighted their performance in parenthesis.  I have also indicated the performance of the 3 major indexes for comparisons. 

1. $ULTA     ... +11.90%
2. $MEDP    ... + 7.35%
3. $ROST    ... + 7.25%
4. $HCA      ... + 5.44%
5. $UNH      ... + 4.50% 
6. $AAP      ... + 3.75%
7. $DG        ... + 2.03%
8. $HQY      ... + 1.43%
9. $FIVE      ... + 0.26%
10. $TJX       ... + 0.13%
11. $TTD      ... - 3.73%
12. $LULU    ... - 5.37%

Indexes:

1. $QQQ   + 1.26%
2. $SPY    + 2.16%
3. $DJI      + 2.84%
4. My 12 stocks (10 winners and 2 losers  + 3.36% within 1 week)

Mentoring  Program

It took us 9 months to attain a gain of  +18.54%  in the leading Growth Stock index $QQQ.  In the last  weeks, 12% (2/3 of the total profits) of that gain was just given back to the market.  That's something no retail investors should ever have to give up.  Learn to identify:

• Right type of Growth Stocks in current environment.
• Timing the right time to enter the market.  
• Developing a Trade Plan for every stock position.
• Having appropriate trailing stops to mitigate risk and conserve your portfolio

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