Do  Not  Diversify

Concentrate  your  Portfolio  instead

https://youtu.be/H3Q8a9imiFs

"Diversification is a protection against ignorance"

"We think diversification as practiced generally makes very little sense for anyone that knows what they are doing"

"We like to put a lot of money in stocks we strongly feel about"

By. Mr. Warren E. Buffett (CEO of Berkshire Hathaway)

There were 19 stocks that I had listed in my post of November 3rd (6 weeks ago) that were showing signs of institutional support.  Most of them have been consolidating and trending along the 10 day sma(simple moving average) since than.  In my post of last Sunday Dec 8th, I identified the ideal buy point for each of those stocks.  These were not recommendations.  I was pointing them out to share my expertise to help you practice with your virtual account.  These buy points are early entries for a small test position to identify true leading Growth Stocks that perform better than the leading Growth Stock index $QQQ.  10 of those 19 stocks triggered a buy order last week.  Here are the results of the performance of those 10 stocks as compared to $QQQ.

1. $ALGT +5.50%
2. $AMKR +6.14%
3. $IPHI    +7.02%
4. $MKSI  +1.49%
5. $ORLY  +0.11%
6. $ROCK  +0.15%
7. $TPX    +3.46%
8. $BLD   -0.98%
9. $OLED  -0.95%
10. $RNG   -1.10%
11. $QQQ  +1.02%

Professional money managers that run hedge funds, pension funds and mutual funds, often underperform the general market as measured by the performance of the $SPY.  Retail investors that concentrate their portfolio to a few leading growth stocks have a better chance of out performing the leading growth stock index $QQQ.

The top 3 stocks mentioned above did 6 times better on an average than the $QQQ.  If you owned these 10 stocks, you ought to close out the losing positions first and use the proceeds to accumulate more shares of the top winning stocks.  They have already proved their worth by massively Out Performing the Growth Index.  According to IBD(Investors Business Daily), if you have a portfolio of $250,000, you should have a portfolio of no more than 6 stocks to begin with.  The way to profit in the market is to concentrate your portfolio to just a few stocks.  You are reducing the risk by owning just a few stocks.  The more stocks you own, the more you are exposed to the risk of exposure to a wide range of stocks. 

Happy Trading!

Amin  

Stocks  Institutions  Have  Exhibited  n  Interest  In 

Here is a list of stocks that have either gapped up in price or the stock has risen 20% or more within 3 weeks from its ideal buy point.   They are currently trending along the 10 day sma(simple moving average) and consolidating the gains achieved since they broke out during the last earnings report.  These are the stocks that no one hears about on the daily chatter in the news media.  This is why it's best not to get your stock and trading ideas from watching CNBC, FOX, Bloomberg or Yahoo news.  They do not have your best financial interests at heart.


I had listed these stocks in my blog post of Nov 3rd (5 weeks ago).  I had mentioned in that blog post that I shall discuss some rules for ideal entry points and some basic rules to follow.  Please don't consider these as my recommendations.  It's meant to share my expertise and to enable you to be able to read the stock charts.  It's meant to highlight some basic IBD (Investors Business Daily) rules of investing and trading leading Growth Stocks.  I have indicated ideal entry points in parenthesis.  Stocks that rose more than 20% within 3 weeks of ideal buy point are highlighted in bold letters.  These should be held for atleast 8 weeks since these are the stocks that tend to move higher from institutional demand.  A second position ought to be considered for such stocks if they continue to trend along the 10 day sma.  That is a sign of institutional support.

1. $ALGT  (165.06)
2. $AMKR (12.05)
3. $ATKR  (39.0)
4. $BLD    (107)
5. $BRKR (48.41)
6. $CRUS (70.0)
7. $FTNT (100.0)
8. $IPHI   (69.50)
9. $LRCX (265.85)
10. $MKSI  (108.0)
11. $OLED (196.23)
12. $ORLY (442.15)
13. $QRVO (99.50)
14. $RNG   (165.85)
15. $SPXC (47.12)
16. $TPX   (84.38)
17. $UCTT (20.60)
18. $UFPI  (47.50)
19. $ROCK (52.50)

Please make a note :

• Average price of these 19 stocks currently is $115.24.  Institutions don't buy cheap stocks and neither should you as a retail investor.
• These stocks have risen in price from institutional buying power.  Observe the sky scrapper volume on the stock charts.  
• Notice that these stocks began their uptrend when the 10 day sma crossed over the 20 day sma in mid October.  
• The major indexes - $DJI, $SPY and $QQQ also simultaneously had their 10 day sma cross over the 20 day sma.  Stocks were in synch with the indexes and correlated to the uptrend market direction.
• Once the stock makes a surge in price with the support of the volume from the institutions, it consolidates before making the next move higher.  It forms a new base - either as a 3 or more weeks of tight and orderly price performance.  Sometimes it retraces a bit for a couple of weeks to shake out the weak holders.

Mentoring  Program

Currently the leading Growth Stock index  $QQQ  has done +33% year to date.  That's a phenomenal performance.  

1. If you are struggling at increasing the size of your portfolio by out performing the $QQQ, than let us help you acquire that knowledge.  
2. If you are not able to identify the right leading growth stocks or ideal entry points to initiate the stock position, don't despair.
3. If you are not quite sure how to develop a trade plan to exit the stock for loss or profit or how long to be in that stock, reach out to us and let us help you become profitable.

Contact us at:

investorspotlight@gmail.com

I will take just a few mentees on a first come first serve basis only.  Once those few spots are taken, I shall close out the current enrollment sessions.  Don't procrastinate.  You can always make money if you have lost being engaged in the market since February of 2016.  You can never make TIME.  Schedule a 30 mins of  FREE  "Discovery Call"  with us and investigate  How best We Can Help You Become Profitable at Investing and Trading.

Happy Trading !

Amin

  

Opportunity  of  a  Lifetime

"If window of opportunity appears, don't pull down the shades"

By Tom Peters (American writer on business management)

"Opportunities are like sunrises. If you wait too long, you miss them"

By William Arthur Ward (writer of inspirational maxims)

For the last couple of years we have been hearing in the media that this bull market is about to end.  It's been going on for 10 years now.  For someone who keeps feelings aside and who keenly reads the stock and indexes chart, one thing that stands out is that the market continues to grind higher.  Since mid February of 2016 when the new bull market started, $QQQ  is  +69%  in the last 33 months.  That works out to be  +2.09%  per month (25% annual return).  Currently  $QQQ  is  +33%  year to date and we are heading into the best month of the year.  It would not surprise me at all if 2019 ends up with  +40%  for  $QQQ.  Picture is worth a 1,000 words and stock and index charts tells you everything you need to know.  Opinions of the self proclaimed GURUS of the market and hedge fund managers who express their opinions means diddly squat.  Market never cares about anyone's opinion.


I had written a post on November 10th with a heading  "You SNOOZE ... you LOOSE".  In that post I had highlighted some of my reasons as to why we may be heading into a 17 to 19 year cycle of secular bull market that started in March of 2009.  Baby boomers were the drivers of the market from 1984 to 2000.  $SPY  had gained  +813%  when the baby boomers reached their peak earning years.  Subsequently the market corrected  -49.2%  in 2000 dot com bubble.  We now have over 100 million millenials who will be at their peak earning years in the next 12 to 15 years when they reach 54 years of age.  Demographics is an important component of the market that we often overlook.



For the last 6 weeks, all the 3 major indexes - $DJI, $SPY and $QQQ  are trending just above the 10 day sma(simple moving average) in a very orderly fashion without much of a hiccup.  Distribution count stands at just 3 for the $SPY and 3 for the $NASDAQ.  Market looks very healthy with the unemployment hovering below 3.6%.  New home sales report posted last Friday indicated the best 2 months in the last 12 years.  Inspite of the tariff wars with Europe, China, Mexico, Japan and Canada, US economy is humming along.  $SPY is  +25.3% year to date and the $NASDAQ is  +30.6%.


I hope you all had a wonderful Thanksgiving Holidays with the family and friends.  Living in Florida this happens to be the best times with cool crisp dry air and pleasant temps with 70's at daytime and 50's at night.  Thanksgiving weekend is the start of the festivities of the year end holidays.  I would like to wish everyone a joyous time for the next 4 weeks.  I am including a link for you to enjoy the hymn of:

  'O Holy Night'

By Kerrie Roberts

https://youtu.be/EDUg88d9Hbw

ENJOY

Happy Trading!

Amin

8   Weeks   Hold   Rule

Institutions account for over 70% of daily trading volume that occurs in the stock market everyday.  They have the power of the money to move the market.  It usually takes the institutions several weeks to accumulate the entire position in a stock that they are showing an interest in.  You can see the rapid rise in the price of a stock with trading volume that usually exceeds the daily average trading volume in that stock.  They show up as sky scrappers on the volume bars in a stock chart.  As a retail trader, one has to learn to read and decipher these stock charts of increasing price with increasing trading volume.

Here is an explanation of that rule as illustrated by IBD (Investors Business Daily).

The  8-Week  Hold  Rule

An Exception to Taking Profits at 20%-25%

If your stock gains over 20% from the ideal buy point within 3 weeks of a proper breakout, hold it for at least 8 weeks. (The week of the breakout counts as Week No. 1.) If a stock has the power to jump over 20% very quickly out of a proper base, it could have what it takes to become a huge market winner. The 8-week hold rule helps you identify such stocks, and helps you sit tight so you can reap potential rewards.This rule should be applied to true market leaders, not just any old stock. The company should have strong fundamentals and other CAN SLIM^® traits, including quality institutional sponsorship.

Sitting Tight Through a Sell-Off

When a stock quickly rises more than 20% in just a couple of weeks, it's likely some investors will take their profits off the table — that can cause the stock to pull back, sometimes sharply.

So understand that stocks that trigger the 8-week hold rule often sell off fairly hard, sometimes during the holding period. This rule helps you sit through that and avoid selling too soon.

The 8-Week Hold Rule in Action

Learn more about IBD's selling rules with a free 4-week trial to IBD Digital. Take a free 4-week trial now.After Holding 8 Weeks, Should You Sell Or Hold?Once the 8 weeks from the original buy point have passed, you can sell to lock in your gains or continue to hold. If you have a solid gain, and the chart action and general market are still strong, you may want to sit tight and see how the story plays out. It could be a stock that goes on to even bigger gains.

 Licensing

Have a look at the stock charts of the following stocks.  These are the stocks that institutions are exhibiting an interest in accumulating them:

1. $AMKR
2. $AMRN
3. $CRUS
4. $DXCM
5. $FTNT
6. $INMD
7. $LRCX
8. $RH

Use the stock charts of these stocks to sharpen up your skills at reading stock charts with the price and volume bars.  

Happy Trading!

Amin

Do   Not   DIVERSIFY

"Diversification is a protection against ignorance"

"We think diversification as practiced generally makes very little sense for anyone that knows what they are doing"

"We like to put a lot of money in stocks we strongly feel about"

By. Mr. Warren E. Buffett (CEO of Berkshire Hathaway)

https://youtu.be/H3Q8a9imiFs

Barron's magazine just published an article in their November 18th issue (page 18).  I am not surprised that they indicated that:

"Nearly all of the top 20 actively managed equity mutual funds in the US., as ranked by assets, are behind the S&P 500 indexe's 23.2% return through October.  All but three, that is"

On closer scrutiny, I found that the average performance of the top 20 actively managed equity mutual funds was a mere +19.72%.  That does not include the fees that these mutual funds charge you.  $QQQ (Growth Stock Index) on the other hand produced +31.54% year to date.  That is +37% better than the average performance of the actively managed mutual funds.

Fire  Your  Mutual  Funds  and  Financial  Advisors
Take Control of Your Financial Decisions

Learn  to  Invest  in  Growth  Stocks

Concentrate  Your  Portfolio

Diversifying exposes you to greater risks in fact.  It's best to concentrate your portfolio with a few leading stocks only.  If one has a portfolio of $250,000 to $500,000, IBD(Investors Business Daily) suggests that one should have no more than 6 to 8 stocks in their portfolio.  As a Growth Stock investor and a trader, laggards should be removed and use the proceeds from it to increase the position size in the leading stocks.  Here is a case study of $RH - a leading stock in the retail industry group:

1. Friday June 7th we had a "Follow Thru" day with the Market in a Confirmed Uptrend.  On Thursday June 13th, the stock gapped up +16% during earnings announcement with trading volume that was 9 times the average daily trading volume.  This is an indication of institutional interest in the stock.  Position was initiated the next day at $109.82 at market open.
2. On Sept 9th - a day prior to the earnings announcement, 1/2 a position was closed out at market open for $152.89.  The stock had already made +39.22% within 13 weeks between earnings announcement.
3. On Sept 10th, stock jumped up +20% within days, triggering the  "8 Week Hold Rule".  Institutions came in with trading volume that was 3 to 5 times the daily average trading volume for 4 days in a row.  1/2 position that was left was already +58.01%
4. On Friday Oct 4th, another position was initiated at $170.  It's a leading stock that continues to be supported by the institutions.  They ultimately are responsible for the movement in the stock.  
5. On Nov 15th, the stock once again gapped up +7.56% in trading volume that was 3.5 times the average trading volume.  That is once again a confirmation of the institutional interest in the stock.  Original position in the stock is now +71.62% within 26 weeks.  The second position that was initiated on Oct 4th is now +10.78% within 6 weeks. 

Concentrating my portfolio with the leading stock $RH enabled me to make a sizeable difference to my portfolio.  Retail investors are much more nimble as compared to the mutual funds who have a large $ investments to make in a stock.  It takes them several weeks to get in and out of the stock.  They have to have all of their monies invested all the time, even when the pulse of the market changes to  "Market in Correction".  Retail investors like ourselves can get in and out of the market with just one mouse click.

Happy Trading!

Amin

You   SNOOZE  ...  You   LOOSE

"The majority of the leading stocks are usually in leading industries. Studies show that 37% of a stock's price movement is directly tied to the performance of the industry group the stock is in."

By William J. 0'Neil (Founder of Investors Business Daily)

While some traders are glued to the financial news tv networks listening to all the doom and gloom in the market, all sorts of stocks in different industries are breaking out and reaching all time highs.  We have been experiencing a broad based rally in the market in the last several weeks now.  This ought to be a wake up call to all of us not to listen to all the noise in the market.  Stock charts ultimately tells us a story of what the market is really doing.  The leading Growth Stock Index  $QQQ  as well as the broad market stock index  $SPY is attaining all time high now and is heading higher.  Currently, here is what the performance of both these indexes are:

• $SPY    ... + 23.62%  year to date
• $QQQ   ... + 30.45%  year to date 

There is so much chatter in the media that we are over 10 years in this bull market and it could end very badly any day.  We are constantly bombarded with news of brexit or inverted yield curve or tariff wars and the risk of Iran and North Korea acquiring nuclear weapons.  Most retail traders are nervous with one foot already out the door. 

Utter    Nonsense ! 

 

Here is the actual data though.  We are in reality possibly heading into another cycle of bullish trend for the next 8 to 9 years.  We saw this happen with a 19 year rally from 1953 to 1975 (caused by the consumption demand of the Bob Hope generation born in 1920's to 1930's).  We also had an 18 year rally from 1981 to 2000 (caused by the consumption demand of the baby boomers born after the the end of the 2nd world war in 1945).  There are over 100 million millenials that are going to be reaching their peak earning years in the next 10 years.  They will be the ones responsible for buying homes, cars, investing in their retirement funds and setting up college funds for their kids.

Here is what the data shows with the performance of the two indexes since the market went on to rally 3 years ago, right after election on Nov 8th  "Follow Thru"  day:

• $SPY     ... + 43% (broad market rally)
• $QQQ    ... + 71% (growth stock rally)

This includes the bear market correction we had of almost  -19%  for the 3 months of October to December 2018.  This is phenomenal.  You can double your portfolio within 3 years by merely investing in the leading  Growth Stock index  $QQQ.

Mentoring  Program

Question you should all be asking of yourself is:

Is your portfolio mirroring the performance of  $QQQ?

If you have a hedge fund or a mutual fund managing your portfolio and you are paying them a fee for it, have they outperformed the  $QQQ  in the last 3 years?  

Chances are, they have probably underperformed for you.  If you have been managing your own portfolio, chances are you too have been underperforming the leading growth stock index  $QQQ. 

How long will you continue to do what you are doing and not take advantage of beefing up your portfolio during this market rally that we are experiencing? 

 Take action now and commit to enrolling in our  "Mentoring Program".  I shall open a few slots for anyone that wants to commit to learning our system.  Its a very busy season for the next 3 months and we could possibly add another  +10%  to the  $QQQ  from where it is today.

Contact us at:

investorspotlight@gmail.com

Happy Trading!

Amin

  

 

Institutional   Behaviour

What I believe about global economic/fundamental factors affecting price:

• Dominant factor theory (DFT) - there are only one or two major drivers of price during any multi-year period (all other fundamental factors are noise-makers)
• Conventional wisdom (what most investors and talking heads think and what most financial media report on) completely miss the fundamental factor.
• By the time the marketplace figures out what the dominant factor has been, a new dominant factor is silently emerging as the new driver of place.
• A very small subset of trading operators (perhaps less than 1%) will understand in real time the factors driving price.
• I have a better chance identifying the dominant fundamental factor by looking at charts with imagination than by monitoring financial/social media.

By Peter L. Brandt

I came across a tweet on my tweeter account @spotlightamin last week with the above quote from Mr Peter L. Brandt, a 40 year trading veteran.  I found this to be so appropriate at this time when we constantly hear the print and broadcast media spouting gloom and doom in the market.  We constantly hear the talking heads and self proclaimed GURUS on CNBC, Bloomberg tv and other media about the trade wars, brexit, inverted yield curve, pending recession fears,impeachment hearings.  Its all noise in the market while the market just keeps tugging along.  Market data on the other hand reflects something quite different.  I have often said that one should let the data drive our decisions as a trader and investor instead.

Looking over the data for 2019, here are the empirical facts:

1. $SPY - the proxy for General Market Performance is  + 22.50%  year to date.
2. $QQQ - the proxy for Growth Stock Performance is + 29.92%  year to date. 

Wow!    wow!    wow!

That's a phenomenal performance.  It's the institutions that actually drive the market since they have the power of huge amount of $$$ that they invest daily in the market.  That is why it is so critical to understand the stock chart behaviour reflected on price and volume on the charts.  Institutions can't hide their behaviour when they start accumulating shares of a stock they are interested in.  Once you learn to recognize the fine details of the stock charts with skyscraper volume (surge in trading volume that is 3 or 4 times the daily average trading volume) or the gap up in price of a stock, you quickly learn to take appropriate action of initiating a stock position in stocks that the institutions are showing an interest in accumulating.

Stocks Institutions are showing an Interest 

Here is a list of stocks that have either gapped up in price or the stock has risen 20% or more within 3 weeks and they are trending along the 10 day sma(simple moving average) in the last 2 weeks.  These are the stocks that no one hears about on the daily chatter in the news media.  That is why it's best to look at the  stock charts and the data instead.

1. $ALGT
2. $AMKR
3. $ATKR
4. $BLD
5. $BRKR
6. $CRUS
7. $FTNT
8. $IPHI
9. $LRCX
10. $MKSI
11. $MKS
12. $OLED
13. $ORLY
14. $QRVO
15. $RNG
16. $SPXC
17. $TPX
18. $UCTT
19. $UFPI
20. $ROCK

Please look over these stock charts and make a note of their price behaviour.  I shall discuss some rules for ideal inititial entry points and an additional entry point as the stock continues to trend higher in the price from institutional interest.

Happy Trading!

Amin

https://youtu.be/UW_EUo0Zrz4

Follow     the     Rules

I often highlight basic rules of Growth Stock investing as preached by Mr. William J. O'Neil (Founder of Investors Business Daily).  These rules help guide us and avoid the pitfalls of trading and investing.  Some of these rules may seem counterintuitive to conventional wisdom of investing.  They do work though.  I shall highlight some very basic rules that worked for me during the last 8 weeks of choppy market.  There is so much noise in the market daily with tariff wars, impeachment proceedings, yield curve inversion, fear of recession and the geo political news of Brexit and the wars in the middle east.  Best thing one can do as a trader and an investor is to just tune off the tv and the print media.  Focus instead on the data.  

Be  data  driven  and  not  news  driven

Mr. Chris Ciovacco(Founder and CEO of Ciovacco Capital Management) had tweeted the following study couple of days ago:

Study: Top Performers Are Very Selective And Focused

Morton E. Hansen, a professor at the University of California, Berkeley, recruited a team of researchers and performed a five year study to identify which specific set of behaviours led to high performance; the key takeaway was summarized in The Wall Street Journal:

"The common practice we found among the highest ranked performers in our study wasn't at all what we expected. It wasn't a better ability to organize or delegate. Instead, top performers mastered selectivity. Whenever they could, they carefully selected which priorities, tasks, meetings, customers, ideas or steps to undertake and which to let go. They then applied intense, targeted effort on those few priorities in order to excel"

I found this tweet to apply very well to all of us a traders and investors of Growth Stocks.  I focused on 3 very basic principles and rules to follow investing in $MTH.  The rules that I observed was:

1. Always buy something on a  "Follow Thru"  day.
2. Add a second position as the stock continues to make gains.
3. Add a third position when the stock bounces off the 200 day sma(simple moving average) in above average daily trading volume.

Here are the details of the trade to show how to profit in Growth Stocks focusing on the 3 basic rules I have highlighted.

• July 24th stock rose +20% within 2 days during earnings breakout session.  Volume was 5 times the daily average trading volume.  This was a clear signal of institutional support.  It invoked an 8 week hold rule.  If one had this stock position than it should be held for 8 weeks because the stock often tends to move higher after consolidating.
•  August 14th was a  "Follow Thru"  day and a small test position was initiated at $62.00.
• Sept 9th, the stock continued to gain in price and hovering along the faster moving 20 day sma.  Second position was initiated at $64.72
• Oct 23rd the stock bounced back up from the 200 day sma in volume 3 times the normal average daily volume.  This reflected institutional interest and support of the stock.
• Oct 24th a third position was initiated at $74.50.  IBD rules suggests that one should follow the institutions.  They ultimately have the power of their trading volume to propel the stock higher.

First position is +21.15% in 10 weeks and 3 days.

Second position is +10.39% in 7 weeks.

Third position is +0.82% in 1 day. 

Currently the stock is trading $37 million daily(stock price $75.11 x daily trading volume of 495,000).  It has an RS rating of 98 out of 100.  It hasn't breached the 50 day sma on a weekly chart since the end of March.  These are the signs of a winning Growth Stock that is currently one of the leaders in the market.  The entire home building group is currently leading the market. 

Happy Trading!

Amin 

M E X I C O

"Once  a  year,  go  someplace  you've  never  been  before"

By  Dalai Lama

I have read this statement before and every once in a while I remind myself to do just that.  It forces me to think outside the box.  I have travelled to many countries and most states of the union with the exception of just 5 in the Northwest and Alaska.  2 weeks ago I decided on the spur of the moment to escape the Florida heat and humidity and head out to the remote mountain places in Mexico central highlands.  Market is just trading sideways and the 3 major indexes - $DJI, $SPY and $QQQ are all hovering and bouncing up and down the 50 day simple moving averages (sma).  It's best to stay out of the market for now and travel to get a better perspective.

There is so much noise in the market with constant commentaries in print and broadcast media on interest rates, trade wars with China and Europe, ratifying the new NAFTA deal, North Korea nuclear deal and sanctions against Iran, border wall on the southern border, oil disruptions in the Persian gulf and now finally the impeachment hearings against Mr. Trump.  I headed south of the border to actually experience Mexico from the perspectives of a local living there in the heart of Mexico where the majority of the population lives.  Here are some facts and my personal observations looking through the eye glasses as an investor and a trader.

Mexico is a republic just like the US.  It has 31 states and the federal district of Mexico City.  It has a free market economy that is the 11th largest economy in the world with a population of 129 million people.  Per capita income based on purchasing power parity is $20,645 as compared to the US which is over $50,000.  I was astonished to find out that the unemployment rate is 3.6% as compared to Western developed world of the Eurozone where its 7.5% and the US with 3.7% unemployment rate. It has one of the worlds best demographics with over 46% of the population under the age of 40 and only 7% 65 plus.  US on the other hand has baby boomers of over 80 million (25% of US population)  and now retiring in droves.

Mexico just celebrated 209th year of independence while I was there.  I was in the most remote part in the central highlands during celebrations.  People were very friendly and out going and welcoming me just because I uttered a few words in Spanish.  I ate what they ate and most of the time I wasn't sure what I was eating but it was all delicious.  80% of the population has a cell phone and they all seemed prosperous to me.  It is one of the most urbanized country in the world with close to 78% of the population living in 5 major cities around the central Mexico city that has 21 million ppl living there (that translates to the entire population of my state of Florida living in just one city).

Wow !   Wow!   Wow!

I was fascinated to read and experience Mexico again.  I have visited the country numerous times but just as a typical tourist that visits the Yucatan or Baja or the beach communities of Acapulco and Puerto Vallarta.  The richest man in the world with a personal fortune of over $60 billion Mr Carlos Slim - just like Mr. Warren Buffett - is a businessman and an investor with reaches in all the major aspects of the Mexican economy.  Mexico is the 7th largest producer of oil.  89 out of 100 top auto parts makers have production facilities in the country.  Ford, Audi, Mercedes, BMW and Nissan have auto plants in the country.  Most Mexicans are employed in the service industries.  Financial services, technology and manufacturing are the major sectors where people are employed.  

I am a trader and an investor first and foremost.  I don't express my personal opinions or politics when investing.  That is what businesses do in US as well.  Lately the market has been responding to the news on a daily basis.  There is a lot of uncertainty in the market.  In my last several posts I was highlighting how best to look at simple moving averages to determine entry and exits of stock position.  Market is highly volatile and now we are back with the change in the market pulse to  "Market Under Pressure"  as highlighted by the Investors Business Daily.  Its a good thing I left for Mexico and learn to make a trading and investing decision on my own with my own observations.  Every retail investor ought to do that and not listen to the noise that is spilled out in the media.  It will ruin you financially and you will lose your emotional capital that is crucial to succeeding and profiting in the market.

Happy Trading!

Amin

Simple    Moving    Average    Lines

"We've all heard the saying, 'timing is everything'. This is just as true in the stock market as it is in life. Knowing the optimal time to buy or sell a stock is a valuable skill anyone can and should learn" 

By Willian J O'Neil (Founder of Investors Business Daily)

Simple moving average (sma) lines are very simple tools to use for taking a position in a stock but also to exit a position for profit as well as exiting the position to mitigate loss.  Institutions account for more than 70% of the trading volume in the stock market.  Ultimately it is them that determine what the stock price is going to be.  If they  decide to enter a stock position, it may take them several weeks to accumulate the entire position.  Stocks will show that by having the price of the stock staying close to the faster moving 10 day and 20 day sma.  Conversely, if they decide to exit the position, it will show up as high volume of stock trading and the price will begin to get depressed lower.  It will show up as the  faster 10 day and the 20 day sma heading lower towards the  slower moving 50 day sma. 

In my blog post on August 18th, I had shared 4 stock positions that were initiated on a  "Follow Thru"  day of August 14th.  They were identified by me as the leading stocks in the leading industries that institutions had already exhibited an interest in.  Some of them had gapped up in price during the earnings announcement - $MTH, $PCTY, $SBUX.  That is a clear signal that institutions were bidding up the price to acquire their position.  $PAYC on the other hand was staying above the faster 20 day sma since end of January.  That is a clear foot print left by the institutions that they want to continue to acquire a hefty position in the stock.

Performance  of  the  4  Stocks

Utilizing the tools of sma, one can start initiating a position when the stock is trading along the faster moving average 10 day and 20 day lines.  If the market is in a  "Confirmed Uptrend"  as identified in the market pulse column of IBD(Investors Business Daily) publication, retail investors should start out a small test position in the leading stocks in the leading sector on a  "Follow Thru"  day.  That is precisely what was done by initiating the 4 stocks positions that I mentioned.  Once the stock moves lower down towards the 50 day sma and crosses below that, it is a signal that the institutions are no longer interested in the stock.  It's time to exit the stock and cut your losses short.  3 of these stocks crossed the 50 day sma and exited the position at market open the next day.  One stock continued to move higher along the faster 10 day and 20 day sma.  Second position was initiated on that stock that institution continued to support with their purchases.

Here are the results of the 4 stocks compared to the 3 leading indexes that I monitor:

Stocks ;

1. $PCTY  ... - 5.56%
2. $PAYC  ... - 5.63%
3. $SBUX  ... - 5.97%
4. $MTH   ... +13.39% first position, +8.63% second position initiated on Sept 9th at $64.71

Indexes;

1. $QQQ  ... +2.96%
2. $DJI     ... +3.46%
3. $SPY   ... +3.54%

There were 3 losing positions and 2 winning positions.  Cutting the losses short by observing the sma lines helped me gain + 4.86% since August 14th  "Follow Thru"  day.  It outperformed the 3 leading indexes as well.  

Mentoring  Program

We are entering a traditionally very profitable 4th quarter in the stock market.  It will be a volatile month in October.  My mentoring schedule is very hectic for the next few months.  There are lots of nuances of timing the market utilizing sma as a tool.  I have explained some of these concepts in very simple terms in my last 4 blog posts.  If you would like to learn the precision methods that I utilize - along with observing the sma lines - I will gladly try to accommodate just a few students in the 4th quarter.  It will be on a first come first served basis.

Schedule a  FREE  30 minutes of   'Discovery Call'  with us and investigate how our program can help you Out Perform the Market like I do.

Contact us at:

investorspotlight@gmail.com

Happy Trading!

Amin

Stock   Charts   Are   Maps 

"I always check my charts and the moving averages prior to taking a position"
By Marty Schwartz (Wall street trader and winner of US investing championship in 1984)

Market conditions improved on Thursday Sept 5th when all the 3 major indexes - $DJI, $QQQ and $SPY gapped up at the open and bolted past the 50 day simple moving average in volume greater than the average daily volume.  IBD (Investors Business Daily) updated the market pulse to  "Market in Confirmed Uptrend".  That's a signal to retail investors to start taking some positions or to add onto the positions that held up well from the last  "Follow Thru"  day we had on August 14th.  Understanding the simple moving averages that I highlighted in my last 2 posts would help you decide which stocks to build on with a second position and at what price to initiate that position.

Simple moving average (sma) lines are like maps of what the stock is doing on any given day or the week.  It exposes the intentions of the institutions with the stock.  As a retail trader and an investor of Growth Stocks, we want to do exactly what the institutions are doing.  They ultimately decide what the stock does because they account for more than 70% of the buying and selling of stocks in the market.

The 4 stocks that I had mentioned in my post - $SBUX, $PAYC, $MTH and $PCTY - are all hovering above the 10 day sma for the last 4 weeks.  The 3 major indexes - $DJI, $SPY and $QQQ on the other hand have been bouncing up and down between the 50 day and the 200 day sma.  These 4 stocks indicates support from the institutions since they all are showing strength of support by staying above the 10 day sma.  Here are the resistance and support lines that I came up with before initiating a second position on these stocks.  These lines were drawn utilizing the lines of the 10 day sma.

• $SBUX   ... $96.04 ($95.75 triggered at market open on Friday Sept 6)
• $PAYC   ... $246.85 (Open order as of Friday Sept 6)
• $MTH    ... $ 64.71 (Open order as of Friday Sept 6)
• $PCTY  ... $107.95 ($107.95 triggered during the trading day Friday Sept 6)

Mentoring  Program

I shall be opening up a few slots in October in my Mentoring Program.  Summer training slots were very quickly snapped up and these months provided lots of opportunities to profit in the market.  We are heading into the 4th quarter which is a very busy and a profitable quarter traditionally.  If you are serious about speeding up your learning curve than I shall open up a few slots in the coming months.  It will be on a first come first served basis only.  We have already attained  +20%  gain with the leading growth stock index $QQQ year to date.  We could have an additional  +10%  gain in the next 4 months.  Now is an ideal time to learn to trade and invest utilizing growth stock strategies of IBD(Investors Business Daily).  

Schedule a  FREE  30 minutes of  "Discovery Call"  with us and investigate how our program can help you learn the basics of reading the Stock Charts:

• How to find the winning Growth Stocks?
• How to Buy the Stocks Right?
• How to Sell the stocks Right?
• How to TIME the market?
• How to protect and harvest your profits? 

Contact us at:

investorspotlight@gmail.com

Happy Trading!

Amin

 

Simple    Moving    Average

"The market has a way of whittling all excessive pride & over blown egos down to size. The whole idea is to be completely objective & recognize what the marketplace is telling you, not try to prove that the thing you said or did yesterday or 6 weeks ago was right"

By William O'Neil (Founder of Investors Business Daily)

One of the simplest and easiest ways to track the performance of a stock is to plot the price of a stock along some very simple moving price averages(sma).  Most common ones that are utilized are:

• 10 days (faster moving average for swing trading growth stocks investors)
• 20 days (faster moving average for growth stock investors)
• 30 days (moving average utilized for faster moving 30 day sma cross over trading against the slower moving 50 day sma)
• 50 days (slower moving average utilized by institutions as a support area)
• 100 days (slower moving average utilized by institutions as a support/resistance area with volatile markets or stocks)
• 200 days (slower moving average over a longer time frame utilized by institutions for their larger holdings in their portfolio)

Simple moving average is the most widely known technical indicator.  It's easy to understand.  Closing price is averaged out over a specific number of trading days.  20 day sma is calculated by adding the closing price of each trading day over the last 20 trading days and averaged out by dividing it by 20 and plotting that line along the price bar of the stock.  It shows the price of the stock on any given day against the moving average line plotted on the stock chart.  It's a moving average because everyday, the new day price is added and the previous 21st day taken off the the list.  The line moves up or down daily with the new day of trading.  

Performance  of  My  4  Stocks

We had a  "Follow Thru"  day on Wednesday August 14th (13 days ago).  Market quickly changed its tune and now we have  7 distributions days between the  $NASDAQ  and  $SPY.  Market pulse has been changed to   "Market Under Pressure".  It's not the time to be taking any new positions under such conditions.  Understanding the concept of the simple moving averages will help you in holding your biases about the stocks.  If  your stocks are hovering around the faster moving 20 day sma while the the major indexes like  $DJI, $SPY and $QQQ  are below the 50 day, it tells you that institutions have a preferance for stocks that are further away from the 50 day sma and closer to the faster moving 20 day sma.  

In the last 13 trading sessions since the  "Follow Thru"  day, the performance of the 3 major indexes as well as the 4 stocks I suggested that we study are:

Indexes:

1. $QQQ   ... +1.17%
2. $DJI      ... +1.41%
3. $SPY    ... +1.52%

Stocks:

1. $SBUX   ... +0.68%
2. $PAYC   ... +4.91%
3. $MTH    ... +5.39%
4. $PCTY  ... +6.95%

Average           ... +4.57%

Data is very clear when you start looking at the simple moving averages.  It doesn't matter what your feelings are about the stock with it's fundamentals and technicals.  This data is what should ultimately drive your decisions about the stock.  Simple moving average line helps you to decide which stocks are preferred by the institutions.  They decide the movement of the price of the stock.  Currently all 4 stocks are along the 10 day sma while the general market as exhibited by the 3 indexes highlighted are struggling below the 50 day sma.  Average performance of these 4 stocks over the last 13 trading sessions is a whopping  3  times better than the performance of the general market using  $SPY  as a proxy for general market performance.  

Happy Trading!

Amin 

Chart    Reading    Skills

"I always check my charts and the moving averages prior to taking a position"

By Marty Schwartz (Wall street trader and winner of US investing championship in 1984)

"To capture the biggest gains, it's important that you use both the daily and weekly charts, since they offer different views on stock. You will get more exact timing indications from the dailies and the big picture from the weeklies"

By William J. O'Neil (Founder of Investors Business Daily)

Quite often I hear from traders some of the indicators they use to do their technical analysis on a stock.  Quite common ones are the candle sticks, MACD, Stochastics, RSI, ADX, Bollinger bands, DMI, Williams R%, CCI, money flows, Elliot waves, fibonacci retracement  and countless others.  Most of these indicators are lagging indicators.  Some of the best indicators and very simple ones that I find to be useful are:

• Simple moving averages.
• Exponential moving averages.

They sound like such simple indicators and yet very few traders quite know how to interpret them along with the price and volume of a stock movement.  These indicators will make your trading a very simple process.  Sometimes we as traders and investors make it a lot more complicated than it really is.  I shall do several posts in the next few weeks to explain in details what some of these moving averages mean and how best to utilize them with your trading.

We will use the 4 stocks that I had highlighted as a small test position taken at market open last week when we had a  "Follow Thru"  day on Wednesday August 14th.  Currently these 4 stocks - $MTH, $PCTY, $PAYC, SBUX - are  +3.57%  while the Growth Stock Index  $QQQ  got slammed  -1.75%  in the last 8 trading sessions.  All the 4 stocks are currently hugging the 10 day simple moving average while the  $QQQ  has plummeted below the 50 day sma and heading towards the 200 day sma.  Study these 4 stocks and plot the 10 day sma as well as 50 day sma on your brokers platform.  Institutions are supporting these stocks while the  $QQQ  is headed towards the 200 sma.  How we manage these 4 leading stocks utilizing the moving averages while the   "Market is Under Pressure"  will be something that I will cover in the follow up posts.  

Happy Trading!

Amin

Follow  Thru  Day  Worked  For  Me

Tuesday August 13th, we had a powerful 4th day of market rally.  $SPY staged a  +1.5%  gain while the leading Growth Stock index  $QQQ rallied  +2%.  Trading volume was higher than the average trading volume for both the indexes.  IBD(Investors Business Daily)  changed the market pulse to  "Market in Confirmed Uptrend".   This is how you time the market.  I was mentioning to my IBD Investors Meetup group on Tuesday night that effective Wednesday August 14th, one should start dipping their toes back in the market with a small test position.  I had once again emphasized to the Meetup members that:   

1. Don't buy  CHEAP  stocks.  They are cheap because institutions do not want them.
2. Buy  HIGH  and sell  HIGER.  Institutions drive the price of the stock higher because they are accumulating a position in that stock.
3. Buy the  LEADING  stocks that are in the leading industry groups.  You only want the best of the best merchandize out there.
4. Look for stocks that are trading above the  20 day sma(simple moving average).  That indicates that the institutions are supporting them while the Indexes are still hovering around the  50 day sma. 
5. Look for stocks that are showing a rising  RS  line with a ratings above 94.  These are the stocks that are outshining the rest of the stocks in the stock market. 

There were 4 positions initiated at the market open on Wednesday.  They were:

1. $MTH     ... (55.81)    $62.00
2. $PCTY   ... (103.71)  $102.12
3. $PAYC   ... (239.33)  $238.42
4. $SBUX   ... (95.21)    $95.91

I have indicated the resistance points for each of these stocks in parenthesis.  Follow along with me and check the performance of these positions this coming week.  

Currently, all these stocks are trading above the 20 day sma(simple moving average).  They have gained  +1.12%  in 3 days last week while the  $SPY is  +0.27%  and  $QQQ is  +0.09%.  These 4 stocks are leading the market and the institutions are supporting it by propping them up and increasing their size of the positions in them.  This happened inspite of the fact that we had a major market reversal on Wednesday.  IBD changed the market pulse to  "Market Under Pressure"  the very next day.   

Mentoring  Program

I shall be opening up a few slots in September in my Mentoring Program.  June, July and August training slots were very quickly snapped up and these months provided lots of opportunities to profit in the market.  I will make just a few slots available in September if you are serious about speeding up your learning curve.  We have already attained  +20%  gain with the leading growth stock index $QQQ year to date.  Historically our best quarter is from October thru Dec.  It's quite possible that we could have an additional  +10%  gain in the next 4 months.  Now is an ideal time to learn to trade and invest utilizing growth stock strategies of IBD(Investors Business Daily).  

Schedule a  FREE  30 minutes of  "Discovery Call"  with us and investigate how our program can help you learn the basics of reading the Stock Charts:

• How to find the winning Growth Stocks?
• How to Buy the Stocks Right?
• How to Sell the stocks Right?
• How to TIME the market?
• How to protect and harvest your profits? 

Contact us at:

investorspotlight@gmail.com

Happy Trading!

Amin

Market   Fools   the   Majority

The most recent sentiment survey done by the American Association of Individual Investors last Wednesday indicates that the smaller US investors (retail investors), were the most pessimistic about the stock market.  48.2% were bearish but only 21.7% were bullish.  The gap of over 26.5% in favour of the bearish sentiments is the 10th time we have noticed such a huge gap since July of 2009.  Historically  $SPY has performed an average gain of +9.8% during the next 3 months after such an extreme bearish sentiments.  Interesting data that no one in the media talks about.  The most recent times that we had such a divergence was in mid Feb 16 and Dec 24th (Christmas eve) of 2018. 

We had a  "Follow Thru"  day on Friday Jan 4th 2018.  $SPY  gained  +16.50%  while the growth stock index  $QQQ gained  +22% within 4 months.  IBD (Investors Business Daily) style growth stocks tend to perform 1 and 1/2 times better than the $QQQ.  Data suggests that with such extreme bearish sentiments in the market, we could see  $SPY  gain on an average  +9.8%  in the next 3 months.  Its quite possible that one could expect the year end results to be:

• $SPY   ... 3,200
• $QQQ  ... 205

Just a cautionary word about the predictions of the market.  No one can predict what the market will do.  There are dangers when you extrapolate the data.  Market just doesn't go straight up in a linear fashion.  It zigs and zags with stomach churning volatility.  We just witnessed that in the last 2 weeks.  We have already had 3 good days of rally in the market last week.  We may be just one day away from changing the market pulse back to  "Market in Confirmed uptrend".  Patience is the key right now.  Building an actionable Stock Watch List is prudent right now.  Every retail investor should have done the home work over the last 2 weekends to scan for Growth Stocks that will be the next leaders in the market.

New  Leaders

It's quite common to see new leadership stocks emerge with the next  "Follow Thru"  day.  We are getting to the tail end of the earnings reports for the 2nd quarter.  Some of the characteristics of new leaders would be:

• Stocks that gapped up +5% or more with volume 3 to 5 times greater than the average daily volume.
• Stocks that held up above the 34 day ema(exponential average) while the market was correcting over the last two weeks.
• Stocks that are showing RS ratings above 94 and the RS line on IBD stock charts at all time high before the stock makes a new high.
• Look for stocks that are breaking out in the next couple of days as we head into a possible  "Follow Thru"  day.
• Stocks that are bouncing off the 50 day sma (simple moving average) or 200 day sma in volume that is decidedly higher than the average daily volume.

Mentoring  Program

I shall be opening up a few slots in September in my Mentoring Program.  June and July training slots were very quickly snapped up and both of these months provided lots of opportunities for some quick profits in the market.  I will make a spot or two available in August if you are serious about speeding up your learning curve.  We have already attained  +25%  gain with the leading growth stock index $QQQ year to date.  Historically our best quarter is from October thru Dec.  It's quite possible that we could have an additional  +13%  gain in the next 5 months.  Now is an ideal time to learn to trade and invest utilizing growth stock strategies of IBD(Investors Business Daily).  

Schedule a  FREE  30 minutes of  "Discovery Call"  with us and investigate how our program can help you learn the basics of reading the Stock Charts:

• How to find the winning Growth Stocks?
• How to Buy the Stocks Right?
• How to Sell the stocks Right?
• How to TIME the market?
• How to protect and harvest your profits? 

Contact us at:

investorspotlight@gmail.com

Happy Trading!

Amin

Follow   the   Institutions

Did you hear that noise when the market crashed last week?

It took the market two months from the  "Follow Thru"  day in early June to gain  +13%  with the leading Growth Stock index  $QQQ.  They were the best two months in the last 20 years.  We gave up  -4%  back within a week last week. 

Ouch !  Ouch!  Ouch!

That  was  a  Train  Wreck

Do you have a plan in place when such things happen in the market?

Last week I had received a lot of messages on my tweeter account as well as Linkedin n facebook pages.  Everyone wanted to know what I thought about the market.  On Thursday IBD(Investors Business Daily) had updated the market pulse to  "Market Under Pressure".  The very next day it changed to  "Market in Correction".  This is a very serious damage done to the market within a week.  We had a cluster of 6   "distribution days"   between the  $SPY(broad market index) and $QQQ(leading growth stock index).  $DJI has dropped almost a 1,000 points within a week.  I felt like a lot of my followers were feeling like a deer in the headlights.

I  Heard  the  Sound  of  Market  Crashing  ... Loud  n  Clear 

The easiest thing to do in the stock market is to buy a stock.  It takes just a mouse click.  How you manage that risk is ultimately what makes you a profitable trader and an investor or someone who loses money in the market.  One should have started down scaling the positions as of Wednesday and started the process of conserving  CASH  by harvesting profits.  This is the time to be very defensive with your positions.  No one can predict what the market will do this coming week.  Looking over the data, we know $QQQ  had corrected  -10%  in May.  In October of 2018, we had a similar action with  $QQQ and it plummeted down with a  -20% correction.  

Hope  and  Prayers  is  not  a  Good Strategy

Currently  $QQQ  as well as the  $SPY  are at 50 day sma(simple moving average).  Next stop would be at 200 day sma.  That would be a correction of over  -10%.  We have been in a sideways trend for the last 18 months now.  The last time we had such a scenario was in 1955 to 1957 when the market moved sideways for 18 months.  It plummeted over  -20%  after that.  This is not a prediction but that's what the data shows.  It s not an opinion because we all know that market could care less about our opinions or our religious and political beliefs.  Market has sent us a very clear signal from the way the institutions have behaved.  On Friday, the trading volume on both - $QQQ  as well as  $SPY  had twice the normal daily average volume of shares traded.  It was mostly selling volume and institutions were just reducing their exposure to the market.

Follow   the   Institutions

• Reduce exposure in the market.
• Harvest partial profits and start scaling down stock positions.
• Don't allow losses to exceed 6 % or more.
• Watch stocks as they begin to plummet below the 50 day sma and take defensive action.
• Monitor stocks that are bucking the trend ($CMG as one such stock).

These are some of the actions that professional traders take to mitigate risk.  As retail traders, we all must take the lead from what the institutions do.  75%  of the stocks will follow what the institutions do.  Market has sent us a very clear message.  

Happy Trading!

Amin

 

Why  I  Work  Sat/Sun

I follow Mr. Steve Burns of  'newtradereu.com'.  He tweeted the following yesterday and I retweeted it for my followers on my tweeter account @spotlightamin.  You should follow me as well as Mr. Steve Burns on tweeter.   We share a lot of good content on tweeter daily.  His tweet explains why I choose to trade and invest in Growth Stocks.  It takes a lot of discipline and focus to analyze the market every week.  It takes a lot of work to identify the stocks that are leading the market.  It takes even more work to decide:

• What to Buy ?
• When to Buy ?
• When to Sell ?
• How to Scale up with follow up buys ?
• How to Scale down with trailing stops ?
• How to mitigate Risk ?
• How to Stay in Tune with the Market ?

It's all worth it 

Mr. Steve Burns tweet:

Trading is a job. It's not passive income BUT, it's a job where:

You have no employees.

No boss.

No customers.

Location independent.

You get uncapped & exponentially growing salary.

Worth it?

Only if you're willing to endure the long & painful learning curve.

-@LoneStockTrader

Mentoring  Program

I shall be opening up a few slots in September in my Mentoring Program.  June and July training slots were very quickly snapped up and both of these months provided lots of opportunities for some quick profits in the market.  I will make a spot or two available in August if you are serious about speeding up your learning curve.  We have already attained  +26.60%  gain with the leading growth stock index $QQQ year to date.  Historically our best quarter is from October thru Dec.  It's quite possible that we could have an additional  +13%  gain in the next 5 months.  Now is an ideal time to learn to trade and invest utilizing growth stock strategies of IBD(Investors Business Daily).  

Schedule a  FREE  30 minutes of  "Discovery Call"  with us and investigate how our program can help you learn the basics of reading the Stock Charts:

• How to find the winning Growth Stocks?
• How to Buy the Stocks Right?
• How to Sell the stocks Right?
• How to TIME the market?
• How to protect and harvest your profits? 

Contact us at:

investorspotlight@gmail.com

Happy Trading!

Amin