$CYBR  + 70.51%  in  12  Weeks

Currently we have 13  "distribution days"  between the  $SPY  and the  $NASDAQ.  As of March 22nd, IBD(Investors Business Daily) changed the market pulse to  "Market Under Pressure".   That sends a cautionary flag for us as retail investors.  It's time to harvest some profits and raise  CASH.  One should be scaling in slowly into the market and locking in some profits along the way.  January 7th  "Follow Thru"  has been one of the most successful and profitable days we had in 2019.  

Here are the details of  How I traded $CYBR  since the  "Follow Thru"  of January 7th.  Following the IBD rules of:

• Timing the market (must buy something on a "Follow Thru" day).
• Scaling into position as the stock makes gains of  +3%  to +5% (Buying High and Selling Higher).
• Staying in tune with the market (keeping track of  "distribution days"  and the market pulse).
• Locking in some gains as the stock gains  + 20%  or more (sell rules of harvesting profits by selling into the strength).
• Observing the 20 day sma(simple moving average) and its divergence from the 50 day sma (extended stocks).

$CYBR  Trade:

1. January 7th (Follow Thru Day) entry at $69.82.  Harvested partial profits on February 25 for +54.75% gain in 7 weeks.
2. January 16th (Scaling in after stock gained  +14%  within 7 trading days) entry at $80.75.  Stock position currently  +47.43%.
3. March 11th (Scaling in with stock outperforming the $SPY) entry at $107.95.  Stock position currently +10.28% and getting extended.  Staying in tune with the market and start taking defensive action.  "Market is Under Pressure"  with an elevated  "distribution days".   Allow the stock to retrace to the 50 day sma before closing the position.  If institutions support the stock at 50 day sma, than add more shares and scale up once again.

Original position at  $69.82  initiated on a  "Follow Thru"  day of January 7th is  +70.51%.  January 16th position is planned with trailing stops to lock in the gains to raise  CASH.  Technically the stock needs to digest the gains over the next couple of weeks.  Reducing exposure in the market is the theme this week. 

Happy Trading !

Amin

Yes ... U  Can  Time  the  Market

I believe in simplicity in the market.  Too often we as traders and investors get too involved in analyzing all the politics and the news in the media.  It's good to remind ourselves that the market is a collective result of all the buyers and sellers in the market.  It's mostly institutions like hedge funds, mutual funds and pension funds that account for over 75% of the trading that occurs daily in the US stock markets.  Their market sentiments is what drives the markets.  When their sentiment changes from being a net seller (bearish) to a net buyer(bullish), it shows up in prices moving higher in higher volume of trading. 

"Follow Thru"  day was identified by IBD (Investors Business Daily)  on Friday January 4th.  December 24th the market sentiments of the institutions was bearish and we reached an all time low that day.  Suddenly soon after the Christmas holidays, institutions suddenly became the buyers and their sentiments changed overnight to be bullish.  Trading volume increased to twice the daily average volume of trading on $SPY (general market performance) as well as $QQQ (Leading Growth Stock Index).  Market made a bullish turn and we had several days of bullish sentiments.  January 7th was the day to start dipping your toes back in the market just when an average retail trader had given up on the market.  Ideal time to enter the market was on January 7th.  We are currently  +13.71%  with $QQQ in the last 10 weeks.  That's  +71%  annualized.  That's how you profit in the market by  "Timing"  it right.

How  Good  is  Your  Stock  Watchlist

As a Growth Stock investor, one must constantly build a stock watch list every week.  You are constantly harvesting profits when your stock makes profits based on your trade plan.  You are also closing down positions on laggards and stocks that are meeting your loss targets.  As a trader and an investor, you are constantly deploying your profits back into the market with newly found growth stocks.  One of the methods I utilize to identify true leading growth stocks is to compare the performance of the stocks on my watch list against the 3 major indexes - $SPY, $QQQ  and $DJI  every week.  This way I can isolate stocks that are the real leaders in the market. 

Last week, the performance of the 3 indexes I follow were:

• $DJI     ... +1.57% (proxy for the 30 big blue chip companies)
• $SPY   ... +2.50% (proxy for general market performance)
• $QQQ  ... +4.19% (proxy for growth stock performance)

In my blog post last week, I had identified 30 stocks that I was monitoring.  28 of those stocks are hovering around or above the 20 day sma(simple moving average).  That is a sign of institutional support.  14 of those stocks did  +5.91%  and solidly beat the performance of the general market as reflected with the  +2.50%  performance of the  $SPY.  Average performance of all the 30 stocks for the week was  +3.08%.   This out performance of stocks on my watch list convinces me that I have a list of stocks that are the true leaders in the current market.  Most of these stocks are extended now.  What we need to be looking for now is for the market to consolidate its gains and have these stocks build a new base before they propel higher.   

There will always be people who see what's new as a threat to the status quo

By ... Jordan Shapiro, writer

Happy Trading!

Amin

 

 

Don't  Invest  in  Mutual  Funds

Invest  in  Your  Education  Instead 

It should be an eye opener for anyone that read the copy of the Barron's weekly publication of March 11th 2019.  They did a detailed study of the performance of the top 3794 actively managed mutual funds.  It did not come as a surprise to me that over 82% of those funds lost money in 2018.  Just a handful of them - 7 to be precise - posted double digit returns.  How is that possible?  You would think that the professional money mangers would be able to do better.  They are charging you a fee for managing your portfolio after all.  Most of their losses occurred after attaining the September highs.  For investors and traders that follow the IBD (Investors Business Daily) methodology of Growth Stock Investing and trading, they would have gotten out into CASH every time that the market went into correction.  It would have stopped the bleeding and the draw down of portfolio every time the market went into correction.  

Why did the professional mutual fund managers did not do that to mitigate losses?

In 2018, we had 8 days when the IBD changed the market pulse to  "Market in Correction".  This is a signal for retail investors to start taking defensive action and begin the process of accumulating  CASH.  When the indexes begin to slide down the precipitous path of slicing below the 50 day sma(simple moving average) and heading down towards the 200 day sma(that's where you are getting toasted and burning through your portfolio), it's time to curtail your losses and begin to have the mindset of CASH as a position in your portfolio.  Mutual funds and other institutional funds cannot do that over night like we as retail investors can.  It takes them several weeks to wind down their  huge positions.  It's no wonder the mutual funds did not perform well last year when they suffered losses during those 8 periods when the market went into a correction mode.

You should seriously consider investing in your education and learn to actively manage your portfolio

Market  Conditions

Currently the Market pulse column in IBD still identifies it as  "Market in a Confirmed Uptrend".  We have 11  "Distribution days"   between the  $SPY  and the  $NASDAQ.  Bulk of those days (7 in all) have occurred in a cluster within the last week.  That ought to raise some cautionary flags for all of us.  It's a time to be looking over your portfolio and positions and have a plan in place to mitigate losses.  $SPY  and  $QQQ  indexes have been hovering around the 200 day sma that is acting as a resistance.  We need for the institutions to come in and support the market if the market is going to make any further progress.  We are just shy of  +7%  to attain all time highs with  $SPY  attained on Sept 20th.  

We had a disappointing labour report last Friday.  One bad report does not portend a trend however.  We do have the best unemployment rate of just 3.8%. since the late 60's.  US stock market is the best performing market in the world and there is no sign of a recession to speak of.  I would not pay much attention to all the media noise that reminds us that we just celebrated the 10th anniversary of the bull market that started in 2009 March.  Just follow the charts and let that decide for us when to get in and out of the market.  Currently the longer the major indexes  $SPY and the $QQQ  stay close to the 200 day sma, the better the prospects of leading stocks consolidating and building new bases.

Stocks  to  Monitor

There are several stocks that have allowed us the opportunity to establish a 2nd and 3rd positions as the stocks have attained gains since the  "Follow Thru"  day of Jan 7th.  Concentrating your portfolio to just a few leading stocks is the proper way to increase the size of your portfolio.  If the market goes into a correction mode this coming week with more  "Distribution Days",  than one should start scaling back their positions and start raising  CASH  instead.  Here are the stocks that have survived the carnage of  "Distribution Days"  we had last week.  They are all consolidating at the 20 day sma and building a a new base. 

1. $TTD
2. $CYBR
3. $TWLO
4. $XLNX
5. $PANW
6. $UBNT
7. $SSNC
8. $PLNT
9. $PAYC
10. $INTU
11. $ANET
12. $AMT
13. $KEYS
14. $MNST
15. $MA
16. $V
17. $ETSY
18. $MPW
19. $VMW
20. $ZS
21. $DG
22. $DLTR
23. $FL
24. $NKE
25. $SBUX 
26. $NEE
27. $DUK
28. $D
29. $AEP
30. $EXC

Happy Trading!

Amin