Don't  Listen  to  the  GURUS  on  Media

"What we learn from history is that people don't learn from history"

 Mr. Warren Buffett 

It was the summer of 2016 and I had just come back from the 2 week cruise in the Mediterranean.  I mistakenly turned on the news on tv.  Brexit was all that they were talking about and every well known hedge fund managers were spouting their opinions on CNBC or CNN or Yahoo finance.  One would have thought that the stock market was capitulating.   

Non Sense !

One lesson that I have learnt is that my opinion or politics really doesn't matter in the market.  Market tends to fool the majority and that includes the professional money managers and hedge fund managers.  Market is a collective of all the buyers and sellers.  Stock charts will reflect the price and the volume of shares changing hands every day in the market.  Ultimately, that is what really matters. 

On July 5th 2016, IBD (Investors Business Daily) changed the market pulse to  "Market in Confirmed Uptrend".  It was a  "Follow Thru"  day.  It was time to start dipping your toes in the market at that time.  Best thing to do at that time was not to pay attention to what the so called  GURUS  were spouting in the media.  When I looked outside the window, I noticed the sky wasn't falling.  Most retail traders were just too scared to step back in the market.  We have been hearing in the media since summer of 2016 that this bull market has been in an uptrend for too long and that it cannot be sustained.

Non Sense !

Since the end of June 2016 to June of 2019, here are the results of the 3 major indexes that I follow.  They all show a strong correlations with each other.  That to me is the one of the best ways to gauge the performance of the market.

1. $SPY   ... + 41.78%  (General market performance).
2. $DJI     ... + 50.33%  (Big cap 30 Dow component).
3. $QQQ  ... + 77.41%  (Growth stock performance)

At this rate, one could have doubled their portfolio by being a passive investor of the  $QQQ  within the last 3 years.  Learning to read the stock and index charts is what it takes to profit in the stock market.

 Mentoring  Program

We have very limited number of slots available for the months of August and September in my Mentoring Program.  Historically our best quarters are the 4th quarter and the 1st quarter.  $QQQ  (Growth Stock Index)  has performed  +21.06%  year to date.  It's quite possible that we could do just as well in the next 6 months.  History suggests that the second half of the year tends to perform better than the first half of the year.  It's not a guarantee however.  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 Stock Charts.  Students that embarked on our program in 2016 have learnt to double their portfolios in the last 3 years.  

What are you waiting for?

Do not procrastinate !

Contact us at:

investorspotlight@gmail.com

Happy Trading!

Amin

How  to  Outperform  The  Market

I am a Growth Stock Investor and I follow Mr. William O'Neil's (founder of Investors Business Daily) methodology of trading Growth Stocks.    Studies by IBD has shown that Growth Stocks tend to perform  2 to 2.5 times   better than the average performance of the market, as measured by the performance of the $SPY.   My strategy involves:  

1. Buy  "High and Sell Higher".
2. Do not   "Buy and Hold".
3. Do not  "Buy Cheap Stocks".
4. Buy  "Right and Sell Right".
5. "Harvest Profits"  as the stock moves higher.  Sell into strength.
6. Use  "Trailing Stops"  to protect profits and mitigate losses.

Studies of IBD has shown that most growth stocks that are fundamentally and technically sound, tend to rise  +20%  to +25%  and than form another base.  Stocks will move sideways for a while to digest these gains before they start making another run higher.  This is the behaviour of the institutions on display.  They have to accumulate a large position in the stock of their choice and it takes them several weeks to accumulate their entire position.  For retail investors, it's quite OK to take these profits and and use the proceeds to invest in other growth stock. 

One of the emotions that we as retail investors have to constantly deal with is the GREED factor.  It's a euphoric feeling when the stock attains a profit of  +20%  to  +25%  within a couple of weeks or less.  Just accept the fact that as a retail investor, you will never sell your stock at the very top or for that matter buy it at the very bottom.  Learning to sell your stock into strength takes a lot of discipline.  Market will be volatile in 2019 and I just have to remind my readers that one of the biggest risk in 2019 is TIME.  The longer you have your stock position with profits in the market, greater the risk you are exposed to of the market retracing n giving up the profits on your stock.   

Market  Condition  

The  "Follow Thru"  day we had on June 7th is working out vey well for now.  We have only 1  "Distribution Day"   so far.  For now the institutions have chosen to continue to participate as buyers in the market.  For the month of May,  $SPY had retraced  -6.60%  and the  $QQQ  had retraced  - 8.81%.  We have made up all of those losses in the first 3 weeks of June so far.  June traditionally performs very poorly with just  +0.02%  gain  - looking over the average performance of  $SPY  over the last 50 years.  Thats is why I have often mentioned in my blogs not to listen to the tv or print media when they say  "Sell in May and go away".  Let the stock charts tell you the story instead.  In our  FREE  and an  OPEN  market system, laws of supply and demand work out very efficiently.

Market has done very well so far for 2019.  $SPY  is  +16.35%  and  $QQQ  is  + 20.46%  year to date.  4th quarter is one of the best quarters traditionally.  No one can predict where the market will be by year end.  At the current rate, it's quite possible that we may end the year with:

• $SPY at 3300
• $QQQ at 220

The market just doesn't go straight up of course.  There will be retracement of  -10%  to  -20%  along the way just as we did  from October to Dec of 2018 and more recently in May of 2019.  Lots of leading Growth Stocks have already attained the profits of +20%  to  +25%.  This might be a good time to start harvesting partial profits in stocks that have done very well for you.  Earnings season can bring back the volatility in the market.  We have a slight reprieve for the next 2 weeks before some of the banks start the reporting their earning. 

Happy Trading!

Amin

YES ... You  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. 

Friday June 7th, the market staged a 4th day of rally during the week.  $QQQ  the leading growth stock index that I monitor, staged a  +6.5%  rally last week off the lows we had attained on the disastrous day we had in the market on Monday, the beginning of the week.  IBD(Investors Business Daily) changed the market pulse to  "Market in Confirmed Uptrend"  as of the market close on Friday.  That is the  "Follow Thru"  day we as retail traders ought to pay attention to.  That's the day the market sentiments of the institutions changed from the bearish camp to the bullish camp.  I have often said in my posts that we need to follow the lead of the institutions.   

Game  Plan

Monday morning one should have a list of stocks to make an intital purchase to test out the  "Follow Thru"  day.  Not all such days will materialize but history indicates that the leading stocks will quickly move up  +10%  to  +15%  within days or couple of weeks with a successful  "Follow Thru"  day.

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. 

Have a look at my blog post from last week (June 2nd blog post) to get some ideas on what sorts of stocks to generate to be worthy of finding a place on your Stock Watch List.

Mentoring  Program

I shall be opening up a few slots over the summer months (August and September only) in my Mentoring Program.  Summer months  are slow months usually in the market.  Historically our best quarter is from October thru Dec.  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

,

How  Strong  is  Your  Stock  Watch  List ?

"It seldom pays to invest in laggard stocks, even if they look tantalizingly cheap. Look for, and confine your purchases to, market leaders"

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

Market trend has been in correction since May 13th.  That was the time to scale back the exposure in the market and start raising CASH.  It was a very nasty week last week.  The 3 major indexes have now plummeted down to the 200 day sma(simple moving average).  Institutional investors usually support the market at this level.  For individual investors, it's going to be a  "Wait and See"  situation this week.  We could be just 4 days away from  the market declaring a  "Follow Thru"  day.  One can't predict the market but as a retail investor one can  TIME  the market.  According to Mr. William J. O'Neil (Founder of Investors Business Daily), one should always buy something on a  "Follow Thru"  day.  That is the ideal  TIME  to start initiating a stock position in the leading stocks.

I had published a partial list of 14 stocks in my blog post last week with the resistance levels identified.  This is the time to be refining the stocks on the watch list and identify the true leaders.  If and when IBD(Investors Business Daily) changes the market pulse to  "Market in Confirmed Uptrend", you should have a list of stocks that are the true leaders in the market.  As a growth stock investor and a trader, you don't want to be buying stocks that are cheap or hovering below the 50 day sma.  Comparing the performance of the stocks on your stock watch list against the 3 major indexes I monitor is the one of the quickest ways to identify if your stocks are leaders or laggard. 

Here is the performance of my 14 stocks for last week as compared to the 3 leading indexes:

Indexes:

1. $DJI      ... - 3.01% 
2. $SPY    ... - 2.66%
3. $QQQ   ... - 2.36%

These indexes have plummeted below the 200 day sma last week.

My Stock Watch List:

1. $CYBR   ... - 1.39% 
2. $LULU    ... - 4.16%
3. $MA    ...   + 0.004%
4. $MNST   ... - 2.46%
5. $NOW    ... - 2.61%
6. $OLLI     ... - 2.67%
7. $PAYC   ... + 1.86%
8. $PYPL    ... - 0.09%
9. $TEAM   ... - 2.82%
10. $TWLO   ... - 1.43%
11. $V           ... - 0.81%
12. $VEEV  ... + 15.67%
13. $VMW    ... - 10.61%
14. $ZS         ... - 3.52%

Average performance of all 14 stocks last week ...  - 1.22%.  They held up well while the indexes fell apart in declining market.

Average price of the 14 stocks on watch list           ... $150.90

11 of these stocks are currently hovering at the 20 day sma.  That is a sign of institutional support.  They are indicating an interest in acquiring these stocks and building a larger position.

Just 3 stocks are below the 50 day sma but no where close to the 200 sma where the the 3 major indexes are currently.  Institutions are still supporting these stocks while dumping and taking profits in their other holdings.  Retail investors should be buying what the institutions are buying.

These are truly the leading stocks and they are certainly not cheap.  Growth stocks strategy is:

• Buy High and Sell Higher
• Buy only the leading Stocks in the Leading Sector
• Buy stocks that are above the 50 day sma at its correct buying point.

  Mentoring  Program

I shall be opening up a few slots over the summer months in my Mentoring Program.  June thru September are slow months usually in the market.  Historically our best quarter is from October thru Dec.  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

"Wanting too much, too fast - without doing the necessary preparation, learning the soundest methods, or acquiring the essential skills and discipline - can be your downfall."

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

I have quite often mentioned that the institutions - hedge funds, pension funds and the mutual funds - are the ones that account for over 75% of the daily trading volume that occurs in the stock market.  They are the ones that ultimately determine the price of the stock.  We as retail investors have to learn to read the clues that the institutions leave behind by studying stock charts.  It's hard for them to hide their intentions when they are investing several hundred million dollars over a period of several weeks to acquire the size of a position in a stock of their choice.  It's equally hard for them to hide their intentions when they start to dispose of a stock that is out of favour with them.

In my post last week I had compared the performance of 2 retail stocks - $JCP  and  $AMZN.  Market has been correcting for the past 3 weeks because the institutions are harvesting profits.  Last week the leading Growth Stock Index  $QQQ  corrected  - 2.67%  but  $AMZN  corrected  - 2.45% (less than the index did).  $JCP  on the other hand corrected  - 18.42%.  It had already corrected  -98.69%  since the highs achieved in Feb of 2007.  $JCP  is now trading at  93 cents  while  $AMZN   is hovering at  $1823.00.

Ouch !  ouch !  ouch ! 

Buying LOW and selling HIGH certainly didn't work with  $JCP.

Buying HIGH and selling HIGHER certainly did work with  $AMZN. 

Institutions usually take several weeks to accumulate the full size position in a stock of their choice.  That is why the price of stock gradually keeps getting higher over a period of several weeks.  This is one reason why buying the stock at correct buy point as identified by IBD is the prudent thing to do.

Game  Plan  for  This  Week

I hope everyone enjoyed celebrating the 3 day  Memorial Day  weekend.  Market is in correction right now but we have already experienced 3 days of rally attempt in the market since May 14th.  No one knows what the market will do in the coming weeks.  We could just as easily have a  "Follow Thru"  day if the   $QQQ  or the  $SPY  moves up  + 2%  in above average volume in the coming days.  Don't fall into the trap with the common perception in the stock market that says  "Sell in May and Go Away".  In 2018 we infact had a  "Follow Thru"  day on May 4th, July 6th(right after the July 4th celebrations) and  August 7th.

The 3 major indexes - $DJI,  $SPY  and  $QQQ - are all hovering above the 50 day sma(simple moving average).  We had 3 days of attempted rally after attaining the lows on May 13th but the indexes were dragged down back to those lows by Friday May 24th.  There were however some Growth Stocks that did not retrace as much as the 3 indexes did.  Some of these stocks are still above the 20 day sma.  That indicates a clear preferance from the institutions for those stocks.  Some of these leading stocks that are trading above the 20 day sma and indicating a high RS ratings by IBD (Investors Business Daily) are:

1. $CYBR   ... $129.74
2. $LULU    ... $174.64
3. $MA        ... $249.85
4. $MNST   ... $  59.69
5. $NOW     ... $269.27
6. $OLLI     ...  $  99.42
7. $PAYC   ...  $203.20
8. $PYPL   ...  $108.54
9. $TEAM    ... $125.31
10. $TWLO    ... $133.32
11. $V            ... $163.03
12. $VEEV     ... $139.75
13. $VMW     ... $200.13
14. $ZS         ... $  70.90

I have indicated the resistance points next to the stock symbol.  They will change as the market progresses this coming week.  Consolidating for the coming week would be a good thing for these stocks.  It may provide a better entry for an initial small purchase or to add to the position you may already have when we do get a  "Follow Thru"  day.

Mentoring  Program

I shall be opening up a few slots over the summer months in my Mentoring Program.  June thru September are slow months usually in the market.  Historically our best quarter is from October thru Dec.  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 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

The hard - to - believe Great Paradox in the stock market is: 

"What seems too high and risky to the majority usually goes higher eventually, and what seems low and cheap usually goes lower."

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

Institutions like hedge funds, mutual funds and pension funds are the power houses in the stock market.  They are the ones that account for over 75% of the daily trading volume in the stock market.  When they decide to bail out of the stock, we as retail investors better listen to what the stock charts show and just get out of the way before we incur massive losses that makes it hard for us to recuperate from.  In the same manner when institutions decide to accumulate the shares of a stock of their choice, you better learn to read the clues they send out like increasing volume and increasing price of the stock.  One very clear case to highlight this concept is to look at the price performance of 2 well known retail stocks - $JCP and $AMZN.  Looking at the weekly chart of these stocks, you find that $JCP was peaking at $87 on Feb 19th  2007 while the upstart $AMZN was barely trading at $42.

Fast forward to May 3rd when $QQQ the leading growth stock index that I monitor was peaking at $191.25.  It corrected -4.30% in the last 2 weeks and currently is being supported by the institutions at the 50 day sma(simple moving average).  $AMZN retraced -4.74% in the same time period and is trading between the 20 day sma and 50 day sma.  $JCP on the other hand retraced -15% in the same time period and has been trading under the 200 day sma ever since May of 2012.  Currently it's trading at $1.14 with no institutional support. 

Ouch!    ouch!    ouch! 

That is a very clear sign that the institutions prefer to own the shares of $AMZN instead of $JCP.  We as retail investors of growth stocks ought to do the same ... follow the institutions lead in the market. 

There is one more story that the stock charts of these two retail stocks is telling us.  While $JCP has been dying a slow death since May of 2012 when it sliced n plummeted below the 200 day sma, it has continued to hit lower highs and lower lows with no end in sight.  The stock has plummeted -98.69% since it's all time high of Feb 19th 2007.  $AMZN on the other hand continues to post higher highs and higher lows except when the market corrected over -20% from Oct 2018 to Dec 2018.  The stock has gained +4450% in the same time period as of Feb 19th 2007.  That is the power of institutions and a very clear message to us as retail investors that we should pay attention to. 

Learn  to  Read  the  Stock  Charts

Mentoring  Program

I shall be opening up a few slots over the summer months in my Mentoring Program.  June thru September are slow months usually in the market.  Historically our best quarter is from October thru Dec.  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 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

Gap  Ups  R  Quick  Winners

Successful investing doesn't require sophistication and complexity; all that's necessary is a healthy dose of common sense."

By John Bogle, Vanguard funds founder

Last Sunday night when I was composing my post, I had absolutely no inkling that the market would take a turn for the worse during the week.  No one can predict what the market will do on any given day.  On Friday May 3rd, a position was initiated on $DMRC at the market open for $47.51.  The stock had gapped up +44.8%  after earnings report on May 2nd with volume that was 14 times the average trading volume of 135,000 shares per day.  Institutions are the ones that determine how fast and how high the stock will make a move during earnings.  This is a very thin stock with the market cap of only $700 million.  They have a very limited number of shares.  Within a week, the stock has climbed another +22.67%.  The stock is  +76%  within 8 days of trading.  This is why one ought to initiate a stock position on a stock that shows such powerful gap ups  during earnings report.  

Currently we have 10 distribution days between the  $SPY  and $QQQ.  IBD(Investors Business Daily) has changed the market pulse to  "Market Under Pressure".  This is the time to conserve your capital and harvest profits.  We are getting towards the end of the earnings cycle with over 90% of the  $SPY  already gone through the earnings confession.  The performance of the 3 major indexes last week was:

1. $SPY    ...  - 2.02%

2. $DJI      ...  -2.12%

3. $QQQ   ...  - 3.20%

$SPY  and the  $QQQ are still getting support at the 50 day sma(simple moving average).  We as retail investors ought not to allow our stocks to plummet past below the 50 day sma.  If the institutions support the stocks at the 50 day sma and the stocks trades in higher volume, one might consider adding more shares and scale up in stock position. 

4  Stocks  that  Gapped  up  

On Friday May 3rd, there were 4 stocks that had gapped up from earnings report.  Here is the performance of those 4 stocks once a position was initiated at the market open on Monday May 6th:

1. $OLED     ... - 0.14%

2. $MELI      ... - 1.37%

3. $LPLA      ... + 1.09%

4. $MNST    ... + 1.53%

Average performance for all the 4 stocks was + 1.11% for the week while the $SPY had corrected - 2.02% and the $QQQ had corrected  -2.12%.  

These 4 stocks are trading above the 20 day sma while the $SPY (proxy for general market performance) as well as $QQQ (proxy for growth stock performance) are below the 20 day sma and hovering around the 50 day sma.  Institutions are not giving up on these stocks while the general market is going through correction right now.  This is why identifying growth stocks that gap up during earnings announcement can help retail investors profit handsomely in the market.

Happy Trading!

Amin