Investor Spotlight

Market Performance

Last weekend I was preparing my readers to initiate a defensive posture with their stock positions by adjusting their trailing stops. We had a "Follow Thru" day on valentines day and it was beginning to look like the rally was going to fizzle. Last week was brutal. The major indexes - $DJI, $SPY and $QQQ all tumbled past the 50 day sma(simple moving average) and all the way past the 100 sma. No one should have allowed their stock position that was in profit of +10% or more to end up with a loss last week. That is the reason why having trailing stops makes sense. Discipline with the stocks starts out with a detailed well thought out Trade Plan for Profit, Loss and Time in the trade targets spelled out.

IBD (Investors Business Daily) has called for "Market Under Pressure". This is not a good time to initiate or add to any of your stock positions. One should be doing defensive selling with trailing stops and start raising CASH instead. It's also a good time to be searching for those stocks that have withstood this correction. They would be the ones that will end up leading the market once this selling by the institutions is done.

Market Analysis

We had a cluster of distribution days last week. Currently we have a total of 14 distribution days between the $NASDAQ and $SPY. 8 of those distribution were piled up last week. That is considered very heavy selling by the institutions by my standards. I am treating this as "Market in Correction". It took just under 2 weeks for the the 3 indexes - $DJI, $SPY and $QQQ to slice down to the 100 day sma from its all time high attained on Jan 26th. The market began to rally soon after that. We have experienced a very similar move with the indexes in the last two weeks. Could this be the end of the institutional selling? We will just have to wait till Monday to see how the market unfolds. Asian markets have already begun to show signs of stress as I compose this post on Sunday night. Japan's Nikkei is down more than -0.35% in the first 120 minutes of trading. Utilizing trailing stops to protect profits and building a Stock Watch List is the prudent thing to do at this time.

Stocks That Withstood Correction

During market correction, 75% of the leading stocks will be in tune with the market and correct as well. The true leaders that withstand the deep correction are usually the ones that tend to lead the market when it resumes its bullish stance with a "Follow Thru" day. These stocks may also offer a follow up buying opportunity, once the market goes thru a consolidation period. Following is the list of stocks worth monitoring:

$ABMD (Trade mentioned on Feb 14th blog post)
$ADBE
$AMZN
$BZUN
$CLR
$DK
$ETSY
$FND
$GRUB
$HQY
$IAC
$LITE
$MSCI
$MU
$NOW
$NFLX
$NKTR
$PAGS
$PANW
$PAYC
$PGR
$RHT
$SCCO
$SEDG
$SPLK
$SQ
$TAL
$THC

Mentoring Program

Were you panicking last week when the market faced a train wreck and was correcting? Did you know how you could have mitigated the loss to your portfolio?

Do you know how to scan for growth stocks that will lead the market on a "Follow Thru" day.

If you are feeling sick to your stomach with the train wreck we had last week, than you need to make a commitment NOW to learn:

How to TIME the Market?
How to find the Winning Growth Stocks?
How to Buy the Stocks Right?
How to Plan your Trade for Profit, Loss and Time in the trade?
How to Sell your Stock Right?

I shall be opening up a very limited number of slots for mentoring in April. Schedule a FREE 30 minutes of "Discovery Call" with us and see how best we can help you become a consistent and a profitable trader and an investor in 2018. Don't procrastinate and pass up the opportunity of making a difference in your portfolio. Start out this year with a resolution to invest in your education.