Best  Quarters  Ahead

Ever since 1896 when the  $DOW  started trading, each of the next 2 quarters - 4th quarter and the 1st quarter - have closed higher  73.3%  of the time during the midterm Presidential cycle.  LPL Financial Inc. published a chart last week on tweeter where they showed that the next 3 quarters during the Presidential mid term cycle, the performance of the market has been +4.0%, +5% and +3.6%  respectively.  That's a phenomenal performance.  Historically the next 3 quarters performance has been  +3.6%, +2.26%  and  +1.58%.  Presidential cycle midterm performance historically would be  +5.2%  better.  We are heading into traditionally the best quarters in the market.  

Market  Outlook  and  Performance

Currently the market is still in a  "Confirmed Uptrend"  according to IBD(Investors Business Daily).  We do have an elevated count of 11  "distribution days".   Most of those days have been piled up in the last 13 trading days since Sept 5th.  A few more days of heavy selling by the institutions could very easily derail the market and the tone of the market could change to  "Uptrend Under Pressure"  just as easily.  We have seen the major indexes - $DJI, $SPY  and  $QQQ  slip down from the 8 day ema(exponential moving average all the way down to the 50 day sma(simple moving average within 3 to 5 trading days of heavy institutional selling.  We have witnessed the evidence of such institutional selling 5 times this year.  Institutions do harvest profits from the leading stocks in the leading sectors on a regular basis.  

Year to date Market performance of the 3 major indexes that I monitor is highlighted below.  I have indicated in parenthesis, where I anticipate they will be by the year end, if current momentum keeps up with the mid term Presidential cycle history :

1. $DJI      ... + 8.2%  (27,800)
2. $SPY     ... + 9.4% (306)
3. $QQQ   ... + 17.9% (200)

Recent  Breakouts

Two weeks ago, I had published a list of 10 stocks from the leading sectors of Transportation, Health Care and Retail.  8 of those stocks ($CSX, $UAL, $CTAS, $HCA, $UNH, $LOW, $GWW, $ROST) broke out in heavy volume on Friday Sept 21st while the 2 indexes - $SPY  and  $QQQ  had a distribution day.  This is what institutional support looks like.  Institutions account for  75%  to  80%  of the trading volume everyday in the market.  As a retail investor and a trader, one needs to follow the lead of the institutions.  These 8 stocks are setting up a secondary buy point now.  Some of them are extended and have already surpassed their ideal buy points.  

Mentoring  Program

If no one ever took risks, Michelangelo would have painted the Sistine floor

By  Neil Simon

Leading Growth Stock index  $QQQ  has a performance of +17.9%  year to date.  The best 3 quarters are ahead of us.  We could add another  +17.9%  performance to the leading Growth Stock index with the tail wind of the mid term Presidential cycle.

Is your portfolio lagging the leading Growth Stock Index  $QQQ? 

I am opening up just 2 more slots for our  "Mentoring Program"  for the month of October.  It will be on a first come first served basis.  Schedule a FREE 30 minutes of  "Discovery Call"  with us and secure your spot now.  Let us mentor you to profit and Out Perform the Market.  Next 3 quarters are the best times to be in the market.  Don't procrastinate and miss out on the opportunity to make a difference in your portfolio. 

Happy Trading!

Amin

Irrational  Exuberance

Its the 10th anniversary of the financial crisis and Dr. Robert Schiller - a Nobel price winning Yale economist and a professor has written a book titled  "Irrational Exuberance".  This was the expression that  Mr. Alan Greenspan also used in 1996 and popularized the expression.  Both Dr. Schiller currently and Mr. Greenspan in 1996 claimed that the stock market was over valued.  The world market dropped by  4%  when Mr. Greenspan uttered this famous expression.  Stock market however went on to make further gains for the next 4 and a 1/2 years.  The stock market got valued even higher for the next several years until the dot com bubble burst in the year 2000.  CAPE ratio (price of stock divided by 10 year earnings average) currently is  33  and Dr. Schiller considers that to be too high.  He also does say that the  CAPE  ratio got up to  45  before the 2000 dot com bubble burst.

I tweeted (@spotlightamin) the video of the interview of  Dr. Schiller by Yahoo finance reporter Alexis Christoforous conducted on Friday Sept 14th.  In the interview  Dr. Schiller clarified that he is not predicting a recession or any kind of a market crash imminently.  He was very wise to have a disclaimer that economists are not good at predicting such things.  He did however say that most recessions are mild.  Stock market has been known to continue making further gains even when the market is considered overvalued by the academia.  Lesson learnt is:

  "Market really doesn't care about anyones opinions or feelings"   

Market  Outlook

As a retail trader and an investor, its best to look at the data and make a judgement based on that rather than acting on how you feel about the market or the stock that you are investing in.  The market is healthy and the primary trend is still strong.  We continue to make higher highs and higher lows.  That is what a healthy bull market looks like.  Economy is strong with only 3.8% unemployment rate.  Business optimism is high - just as it was in the President Reagans era.  Last quarter GDP(Gross domestic product) was at  +4%  and that's the highest it has been during this recovery period.

My analysis of the data indicates to me that we had a bullish market for 17 years from 1983 to 2000.  $NASDAQ  gained 976%  in those 17 years.  Looking over the weekly charts of the leading Growth Stock Index  $QQQ,  we had a bullish trend from March 2009 to 2014.  Year 2015 the market was digesting its gains and consolidating.  The new bull market began in Feb of 2016 and we are now  2.5  years in the new bullish trend.  This bull market could last  16.5  years like it did from 1983 to 2000 dot com bubble.  Markets don't just go straight up of course.  There will be corrections along the way and as retail investors, we just have to get defensive when the   "Distribution days"   gets elevated.  Currently we have 10  "Distribution Days"  between the  $SPY  and the  $NASDAQ.  That is a cause of concern.  4 of those days will however fall off in the coming week because they will be more than 25 days old.   

Mentoring  Program 

"What's dangerous is not to evolve"

By Jeff Bezos (Amazon founder and CEO)

From  2010  to  Aug 2018, $SPY(general market performance)  has performed  +171%  while  $QQQ(growth stock performance) has out performed to  +330%.  Growth stocks outperform the general market by a factor of 2 to 2.5 times.  In the last 12 months,  $QQQ  has performed  +26.40%

Is your portfolio lagging the leading Growth Stock Index $QQQ? 

Schedule a  FREE  30 minutes of  "Discovery Call"   with us and let us mentor you to profit in the market.  We have just a couple of spots left for the month of October.  Secure your spot now to profit in the coming quarter.  We are heading into traditionally the best quarter of the year.  Don't procrastinate and miss the boat to making a difference in your portfolio.

Happy Trading!

Amin

+18%  Profit  within  17  Trading  days

Earnings report always poses a risk of eroding your profits in a stock.  $FIVE  trade that I had highlighted last week already was showing  + 12%  profit within 13 days of initiating the trade on August 15th.  Earnings was slated to be announced Sept 6th Thursday after the market close.  One of the best ways to mitigate the risk is to harvest partial profits prior to the earnings announcement.  It's always a good idea to lock in some gains by taking a partial position off the table.  There is never a guarantee that the stock will react positively from an earnings announcement. 

$FIVE  had gained  +25%  during the earnings announcement on June 7th.  This has been a leading retail stock ever since it surged  +25%  during the last earnings.  In order to mitigate the risk and lock in some gains, 1/2 of the position was closed out at $114.47 for a gain of  +10%.  The other 1/2 of the position was left to take advantage of the possibility of stock surging again.  After earnings announcement on Friday Sept 7th, the stock surged to  $130.89  for a gain of  +26%.  $FIVE  stock trade attained a cumulative gain of  +18%   for both 1/2 positions added togather. 

$RH  is a similar retail stock that exhibited the same characteristics as the  $FIVE.  It surged  +21%   after the earnings report on June 12th, triggering an  "8 week hold rule".  Unfortunately,  $RH  dropped by  -21%  within 4 days after the earnings announcement on Tuesday Sept 4th.  This is why it makes sense to lock in your gains and just leave a partial position to mitigate the risk of bad earnings surprise.   

Market  Outlook

Market is still in a  "Confirmed Uptrend"  according to IBD (Investors Business Daily).  We do have an elevated count of 10  "Distribution Days"  -  4 of which were just piled on last week.  There is a cause of concern heading into the second week in September.  August was a phenomenal month with  $QQQ  posting  +5.78%  gain.  This was unsustainable and we quickly gave away  -2.97%  of it just last week.  September is traditionally the worst performing month looking over the data for the past 50 years.  Its a good idea to raise some  CASH  now and adjust the trailing stops to lock in gains that you may have in your Growth Stock positions. 

Currently the Technology stocks are under pressure and there may be some profit taking going on.  $QQQ  was up  +20%  as of  end of August.  Health Care, Transportation and Retail related stocks are in the lime light right now.  Here are some of the stocks that I am monitoring this week.  They are extended right now just as the overall market is.  I have highlighted the resistance/support  line in parenthesis:  

1. $CSX   ...  (72.22)
2. $UAL    ...  (81.91)
3. $CNC   ...  (143.79)
4. $CTAS ...  (212.27)
5. $HCA   ...  (130.57)
6. $UNH   ...  (269.14)
7. $LOW   ...  (108.01)
8. $GWW  ...  (347.20)
9. $WSM   ...  (67.74)  
10. $ROST  ...  (95.57)  

Mentoring  Program

I am a devout follower of IBD (Investors Business Daily) style of investing/trading Growth Stocks.  The chief reason being is that Growth Stocks tend to perform 2 to 2 and 1/2 times better than the performance of the general market as measured by the performance of  $SPY.  As of end of August this year, $SPY had gained just  +9%  year while the leading growth Stock index  $QQQ  had gained  +20%.  Third quarter is the best performing quarter followed by a stellar performing January as well.

Is your portfolio lagging the leading Growth Stock index?

If it is than do yourself a favour and get on board with our mentoring Program.  I have identified over 35 growth stocks such as  $FIVE  that can enable us to Out Perform the leading index  $QQQ.  Let us help you with your trading  and investing with our individualized mentoring program.

Schedule a  FREE  30 minutes of  "Discovery Call"  with us and help you to profit in the following quarter.  Secure your spot now to profit in the coming quarter.

Happy Trading!

Amin

+12%  Profit  within  13  Trading days utilizing  8  week  hold  rule

Last week I had shared a trade on  $CTRL  that gained  +16.35%  profit within 6 days.  This week I will share a similar trade on  $FIVE  that  gained  +12%  profit within 13 trading days to date.  Both these trades had one thing in common.  They both surged over  +20%  within 3 weeks from its buy point, triggering an  "8 week Hold Rule".  Mr. William J. O'Neil (Founder of Investors Business Daily) came up with this rule which states:

"If your stock gains +20% or more within 1 to 3 weeks of a proper breakout, hold it for atleast 8 weeks"

Stocks with such a powerful move in volume that is sometimes 5 to 8 times the normal average trading volume often become the biggest winners.  This sort of powerful surge is a sign that institutions are really interested in grabbing every share of the stock they can lay their hands on.  Stocks will often consolidate soon after such a powerful move for several weeks.  Institutions usually will start accumulating shares again within this 8 week time frame or possibly soon after that.  This was an observation made by Mr. William J. O'Neil and he came up with this 8 week hold rule.

Trade  Plan  For  $FIVE

June 7th was the earnings report for the 1st quarter.  Institutions reacted positively and the stock surged over  +20%  within a week.  Trading volume was 12 times the normal average trading volume that day.  This was a foot print left by the institutions indicating their interest in acquiring some more shares of this winning stock.  Stock began consolidating tightly and smoothly and never breached the 34 day ema (exponential moving average).  Stock began hovering tightly around  $104.09  buy point for 4 days of Tuesday August 7th thru Friday August 10th.  Trade was initiated first thing the following Monday August 13th.  Here are the details of the trade plan:

Entry: $103.99 (got filled on Wednesday Aug 15th)

Exit: For initial profit target  $116.47 for a  +12% gain

Exit: For loss target  $98.79 for a  -5% loss

Stock met its profit target precisely at  $116.47  on Friday August 31st.  Stock is once again trading tightly and orderly for the past 6 trading days as it approaches its earnings announcement on Thursday September 6th.  Stock had surged more than  +10%  within 3 days prior to earnings in June and went on to gain an additional  +20%  within a week after the earnings announcement.  Currently I plan to hold onto the position until wednesday before considering harvesting profits.  Stock is currently trading above the 8 day ema for the last 4 weeks in a very orderly fashion.  Follow along with me on this trade and I will share with you how I mitigate the risk of earnings day on Thursday  September  6th with this stock. 

Mentoring  Program

"Don't be afraid to take a big step when one is indicated. You can't cross a chasm in two small jumps"

By David Lloyd George (British statesman) 

Leading Growth Stock index  $QQQ  is  + 19.83%  year to date.  August month delivered a whopping  +5.78%.  Best trading months are from October through January.  Is your portfolio lagging the leading Growth Stock index?  If it is than take that big leaping jump and get on board with our mentoring program.  Currently my students and I have identified  35  such leading growth stocks that are meeting our 8 week hold rule.  Let us help you with your trading and investing with our individualized  mentoring program.

Schedule a  FREE  30 minutes of  "Discovery Call"   with us and let us help you to profit in the market.  We only have a very limited number of spots left for the fall.  Secure your spot now to take advantage of the best months ahead in the market.

Happy Trading!

Amin

+16.35%  Profit within 6 Trading days utilizing 8 week hold rule

Mr. William J. O'Neil (Founder of Investors Business Daily) has a rule which states:

"If your stock gains +20% or more within 1 to 3 weeks of a proper breakout, hold it for atleast 8 weeks".

Stocks with such a power often become the biggest winners.  A true leading stock that make such powerful gains is a sign that the institutions have an interest in acquiring more of these shares.  Institutions do not want to spook the market and show their true intentions and as such, there will usually be a period of consolidations before the stock makes another similar move when the institutions come back to acquire more of these shares.

$CTRL  was such a stock that appeared on my weekend stock research that I religiously follow.  On August 3rd, the stock broke out from its proper breakout point of  $26.59  in volume that was 6 times the normal average daily volume of shares changing hands.  The next day it closed at  $33.12 (+ 24.56 gain within 2 days) triggering the 8 week hold rule.  There was a clear foot print left by the institutions and their intentions of acquiring more of these shares.  Stock began consolidating the following week to digest these gains before the institutions would make another attempt to acquire more share.

Trade Plan for $CTRL:

Entry:  $31.20 (got filled at $31.18 on Wed Aug 15th).

Exit:  for initial profit target  $34.32  for a  +10% gain.

Exit : for loss target  $29.64  for a  -5% loss.

The following Tuesday and Wednesday (Aug 21st and Aug 22nd), the institutions came back and began accumulating shares again. There was 2.5 to 5 times the daily average volume of shares traded these 2 days and the position was closed out at market open the following day on Thursday Aug 23rd at  $36.30  for a quick   +16.35%  profit within 6 trading sessions.  Stock has already made a parabolic move of +38.62%  since breaking out of its proper buy point of  $26.59  3 weeks ago.  It is likely to consolidate for several days again or possibly retrace to its 50 day sma(Simple moving average).  Such powerful stocks quite often retrace to its 50 day sma where the institutions often choose to support these stocks.  

Mentoring  Program

"You are unique. You have different talents and abilities. You don't have to always follow in the footsteps of others. And most important, you should always remind yourself that you don't have to do what everyone else is doing and have a responsibilty to develop the talents you have been given"

Roy T. Bennett, The Light in the Heart

Leading Index  $QQQ  is  + 17.15%  year to date.  October through January are the best performing months in the stock market.  You should always measure your portfolio against the leading index  $QQQ.  Is your portfolio lagging the leading index year to date?   If it is than you ought to seek help and let us help you out perform the market with our one on one individualized mentoring.  

Schedule a  FREE  30 minutes of  "Discovery Call"  with us and let us help you to profit in the market.  Let us show you how to identify Growth Stocks that are fundamentally sound and technically set up to help you Out Perform the Market.

Happy Trading!

Amin

Market  Conditions

We are continuing to be the best performing market in the world.  $NASDAQ  is  +13.2%  YTD(year to date)  while the next 3 largets economies in the world - China, Germany and South Korea - are in negative double digits.  Japan is down almost  -5%  YTD.  US economy is firing on all cylinders with the unemployment less that 3.9%.  Inflation is held at bay and the GDP(Gross domestic product) is  +4%  for the last quarter.  80%  of the  $SPY have shown accelerated earnings and sales for the last quarter.  We are at the tail end of the earnings season with  90%  of the  $SPY  already having faced the earnings confessional booth.  

Distribution count between the  $SPY  and the  $NASDAQ  has been getting elevated every week by a count of 2 for the last 3 weeks in a row.  Currently we have 8 distribution days according to IBD(Investors Business Daily).  Its prudent to have trailing stops on any stock position you currently have.  Last week of August tends to get volatile and the indexes have been known to slice right down past the 50 day simple moving average(sma) in the last week of August.  It happened last year but we quickly had a   'Follow Thru'   day right around the labour day holidays.  Lot of traders missed out - including the professional money managers - for the bullish run we had for the next 5 months after that. 

Currently, the 3 major indexes are showing the following performance for the last 13 trading sessions of August.

• $DJI       ... + 1.00%
• $SPY     ... + 1.33%
• $QQQ    ... + 1.93% (Leading Index) 

Traditionally, the month of August shows a meager  + 0.10%  performance on an average, looking over the data for the past 50 years.  This year has been a good month of August so far.  Protect your profits in the trade with an appropriate trailing stop.

Stock  to  Monitor

We have mid term elections coming up in the last week of August.  During the presidential elections in 2016, we had a  'Follow Thru'  day right after the elections results were announced.  Market just took off without looking back until January 26th of 2018 when we had a  - 10%  pull back.  We have to prepare for such a possibilty during our mid term primaries in late August.  Here are just some stocks that I shall be monitoring for the next week.  I have indicated the resistance lines for each of those stocks in parenthesis.

1. $RH       ... (152.48)
2. $HCA     ... (124.51)
3. $CTAS   ... (210.38)
4. $CNC    ... (143.79) 

Mentoring  Program

"You are unique. You have different talents and abilities. You don't have to always follow in the footsteps of others. And most important, you should always remind yourself that you don't have to do what everyone else is doing and have a responsibilty to develop the talents you have been given"

Roy T. Bennett, The Light in the Heart

Our schedule for mentoring new students is full for August/September.  I am however opening up 3 slots on a first come first serve basis for the month of September.  $QQQ - the leading index has performed  + 15.47%  YTD.  Is your portfolio performing better than the leading  $QQQ  index?  If it is not than you are falling behind. 

October through January are the best performing months in the stock market.  Don't procrastinate and get educated about the stock market.  We have individualized program to help you get up and running so you can start profiting in the stock market. 

Schedule a  FREE   30 minutes of  'Discovery Call'   with us and let us help you to profit in the market.  Let us show you how to identify Growth Stocks that are fundamentally sound and technically set up to help you Out Perform the Market.

Happy Trading!

Amin

How  I  Traded  $TWLO  For  +23.50%  in  5  Weeks

I had identified  $TWLO  on June 17th blog post as one of the 15 leading Growth Stock.  Market was correcting at that time and it was not the ideal time to take a position in the stock.  Market went into a  'Confirmed Uptrend'  as of July 6th and that was the signal to initiate a position on the stock.  That is how I  TIME  the market.  One must always buy something on a  'Follow Thru'  day according to Mr. William J O'Neal (Founder of Investors Business Daily).  Here are the details of the how  $TWLO  stock was handled for 5 weeks to attain a profit of  +23.50%. 

1. $TWLO position was taken at the market open on July 6th   'Follow Thru'  day at  $56.87.
2. Trade Plan was for a  +10%  profit target at  $62.56
3. Loss target was for - 4%  loss at  $54.60
4. Profit target was met on July 17th (8 trading days) and 1/2 the position was closed out to mitigate the risk.
5. Earnings was on August 7th.  Held the 1/2 position to benefit from earnings spike.  The last 2 earnings on Feb 14th and May 8th, the stock had gained more than  +20%  within days of earnings release.
6. Trade plan for the rest of the 1/2 position was to close out at +20%  from the high on July 17th when the first 1/2 position was harvested for a  +10% gain.
7. August 9th - 2 days after the earnings release, the entire position was closed for  +20%  gain at $78.00
8. Total cumulative profit in the trade was  +23.50%  in 5 weeks.
9. For comparative purposes, the leading index  $QQQ  did  + 4.96%  in the same time frame.
10. $TWLO  Out Performed the leading index  $QQQ  by  4.7  times.

 $TWLO has attained a performance of  +166%  since the  'Follow Thru'  day on Feb 14th.  Stock has gone up from $29.09  on Feb 14th to  $77.49  on August 10th (6 months).

Growth stocks have the momentum because institutions are the ones that drive the price of the stock higher. 

Mentoring  Program

If you would like to learn:

How to Identify Winning Stocks Consistently and How to Trade them to Outperform the Market

Enroll in our  "Mentoring Program"   There are just 3 spots left for the August/September classes.   Reserve your spot now.  It will be on a first come basis.  Last quarter is traditionally the best quarter in the market.   If your portfolio isn't  + 13.6%  year to date than seek help and don't let the uptrending market get away from you.  Don't procrastinate and take control of your financial future.   Your financial advisor or the hedge funds and mutual funds are not doing you any favours.  They charge you a fee without any guarantee that your investment will out perform the leading index.  You can do much better than the professional money mangers.  Follow me and learn from me 

How to Trade and  Invest wisely.

Schedule a  FREE  30 minutes of  "Discovery Call"   with us.  Contact us at:

investorspotlight@gmail.com 

to schedule your appointment with us to see if you qualify for our program.

Happy Trading!

Amin