Category Archives: IBD


#IBD Partner #AD

FinTwit is giddy with retail this morning with lots of breakouts across the board.   Here is a quick and handy MarketSmith scan for retail stocks to go through:


Sometimes it really is as easy as it looks and as traders we make it too complicated.  Case in point, LULU:   it held like a champ on that 20sma while market dumped, and now breaks out.   Exactly what you want to see — we should have been all over it (but aren’t) under 100.     When market changes from range bound to trend you have to start trusting it more … let’s see if we can get our close above 270 for Friday close.

LULU look at how that 20sma was constantly bought — wow. Gorgeous.  We got too cute and thought it would break and didn’t trust it — mistake of course not to have on watch-list.   Never stop learning.


Werk Werk: The two halves of trading

#IBD Partner #AD

In the most general terms there are only two parts to trading:  1) find potential stocks to trade 2) trade aforementioned stocks.      #2, the actual trading part we have honed down to some basic strategies, tweaked out through 20 years of being traders.  We don’t really have to work that hard anymore in figuring out how to trade, what strategies to use,  risk management, etc.   The #1, actually finding candidates,  is the part where effort  never stops. You always have to be out there hustling to get new candidates.

We’ve been tapping into MarketSmith lately to tweak out some scans — some of you old timers will know the previous version of MarketSmith (pre-2010) as Daily Graphs.     Daily Graphs, started back in 1972, was the original chart book developed by Bill O’Neil, delivered weekly to subscribers.  We started trading in the late 90s and didn’t have the pleasure to have weekly chart books delivered to our houses, but  are pretty sure it didn’t have the same tricks as its new MarketSmith iteration.

MarketSmith is excellent on desktop and mobile.   For desktop we often use the slide function  — we go to for example Growth 250, put the Slide function to 3 seconds and let it Play.   We always have Chart Pattern Recognition on and just need 3 seconds to figure out where we are interested in or not — if it does pique our interest we  pause play and jot down the name. Then hit play again.   You can go through 250 stocks in less than 20 minutes.


What we also like to use is the mobile version on the iPad — looks amazing on iPad Pro.  Here is what the IBD 50 on iPad looks as we scroll through names that interest us:

What we would have paid to have this type of software power when we started back in the late 90s!

And appropriate for this week as most of the big hitter earnings are now in the books, stocks that have already reported earnings with either gaps or no gaps filled filter (sorted via yes or no):

QQQ has broken the range, let’s see if SPY can follow with 270 as big Kahuna.  See you out there on StockTwits and Twitter!

If you want to try out a trial of MarketSmith click here.    


$AAPL is like Playoff Lebron

Range bound market continues but we think there’s a decent chance market finally breaks up out of the range. Why?  We’ll explain.

On Thursday things were looking quite dark.  Market was going full speed into the 50sma weekly tests, breadth was heavy, and it looked like a trend day down.   What was at stake?  Weekly 50smas of SPY DIA XLF and SMH.   All of them held on Thursday, closed off the lows, and all followed through up on Friday.  However, that’s still part of the range game –goes down with speed and you think it’s all over, then holds support and bounces and you think wow new highs coming.  Emotional trip up and down.   There was one difference though that caught our interest.   QQQ.

Thanks to world stock market leader AAPL the Nasdaq finally closed over 20sma weekly — the first time in 6 weeks.  It broke the range.  If it has enough power it can lead the other indices up — we won’t bet the farm on it but we are long into Monday.

Do you recall that smack down on 50sma daily resistance on the QQQ last Thursday after AAPL earnings?  We just re-mounted 50sma daily and closed over that smack down site.

SPY held the 50sma weekly but still has to deal with the 270 resistance which is 20sma weekly, horizontal resistance, top of BB,  and trend-line resistance.   Range bound hat stays on until that goes.

Note the lower Dev 2 BB bounce on Thursday, follow through on Friday.   Feels awesome, but it’s range-bound games until 270 falls on SPY.

DIA held 50sma weekly — you know the drill, has to get over 250 (20sma weekly) for us to stop talking about range-bound tactics.


Daily look– look how 200sma buyers won the day on Thursday with a close above it and followed through on Friday.    DIA has not closed under the 200sma daily since June 2016.

AAPL hit 50sma weekly pre earnings and it was game over for shorts– new highs on Friday.  AAPL is Playoff Lebron of the stock universe.

Glad to have it lead again — our trading universe and profits are in a happier place when AAPL leads (versus when for example utility stocks lead).

XLF we talked about in real time when it hit 50sma weekly on Thursday in regards to being a good risk/reward trade.   Good follow through on Friday — definitely not out of the woods but it could be worse.

BABA from Thursday newsletter we had on for potential long post Friday morning earnings — fantastic hold on 50sma weekly last week and follow through up this week.   As you know from our previous post, longs on good charts on good earnings can be golden trades.

Here is daily on BABA — note how it held support on the dip on Thursday and then took off on Friday post earnings.  Beautiful.  We’re long.

NFLX has been in our newsletter all week waiting for it to break this base as it held the 50sma daily (break of that and all bets were off).    Finally left the 50sma today — we’re long and looking for follow through next week.  Nice to be in IBD company as their Swing Trade service is also long NFLX.   #IBDPARTNER

NFLX chart on MarketSmith   and as you can see Fundies pass the test too:


We talked about SMH potential long last week on weekly 50sma — tested it again this week and again it held with decent follow through.  Bias is long until that fat blue line breaks.

There you go– all the important things we see in the market in one post.  Enjoy your weekend.   HCPG

Grinding it out

We started trading in the late 90s as active CANSLIM type traders, trading the new IBD 50 adds and momentum stocks on the list.   Our guess is that most people who were actively trading at the time will feel a nostalgic shared moment  and nod their heads reading that piece of shared memory.

Trading was a national obsession back then and you couldn’t leave a cab or a Dr.’s office without talking stocks, it really was all we could think about all day long.   Fast forward 20 years and it’s still a passion, but a more muted one as the energy for the career also has to fit along with family and children and all those other things that come into play once you leave your 20s.  Our time-frames now are longer and we don’t have the same manic obsession to trade at all times and often are found content sitting in swings.   Coming full circle, but from the other side, we’re also quite happy to announce HCPG partnership with IBD and Marketsmith.   IBD we have known well for many years, but MarketSmith is a newer product for us and we’re having a lot of fun exploring it and making it work for us.  We’ll have future posts to show how we are integrating it into our research.

Market seems to be on hold waiting for a catalyst —  typical range bound tape.   SPY 255-270 has held now for over 20 sessions.

Weekly shows it best:  stuck between 50sma  on bottom and 20sma on top.    Dips are being bought and rallies are being sold — typical of a range bound market.  We bought some stocks on Thursday, sold most of our positions on Friday and are left with a few half positions coming into today.    Be nimble in this tape or any profits you have will likely evaporate.  Not fun, but definitely part of the business.

Two projects we have for today:  one take a look at selective stocks that have earnings this week.   Our absolute favorite trades are post earnings on stocks with strong patterns– especially in a tape like this with very little momentum.   This is your typical weak sauce tape where nothing can get going and indices often bob up and down every day.

So it was time to fire up the espresso machine, bring out the iPad, sit on the deck and go fishing for new ideas.  We were quite surprised at how much we liked the MarketSmith mobile app — looks fantastic on the iPad Pro.    Here is a page sample of stocks in  the “Near Pivot” list — you can either do Full Chart, or Multi Chart and look at several at the same time.  We like to go through this page fast, with a notebook writing down notes on stocks that potentially will interest us for further research.    After looking at literally hundreds of charts a day for 20 years you learn to see patterns fast, all we need is an initial 3 seconds.  If it passes that test, we jot down the name.

If you want to try it out (mobile and PC) click here  MarketSmith trial   

Couple points in general about this current market:

  1. We think it’s quite possible it’s going to be similar to 2015 — large consolidation zone, versus a new bear market.
  2. Shorting in the hole has not worked well — what has worked is buying dip (not sure if it would work again, we would not be buyers on another trip to 255 SPY. We would wait for confirmation/follow through next time meaning we have a lot less confidence in that support) and more than anything else, selling rallies.    As we have regularly told our readers in the past few months, STAY NIMBLE.    Sell that half partial right away into the next day gap up/rally.  We are not seeing follow through in this market.   Once that changes, adapt, but until then…  quick trades.
  3. There’s no momentum in this market up or down, typical of range bound tape.   One potential strategy that we have been doing is to go through the earnings schedule of the week and look for stocks that have solid patterns, and then look to trade them the next day.  Easier said that done, some gap down, some gap up too much, some gap up and fail, but there are some good risk/reward potential trades in this strategy.

We’re trying to tap into reserves of creative energy and bring back blogging (we used to blog regularly 2006-2012 — basically once we started Twitter/StockTwits we ran out of steam for blogging).   Key to writing now is to just start.  Just open up a draft, put down some words, and go from there.   What we’ve realized is that writing has often little to do  with the romantic scenario of being inspired — it’s like anything else in the long run, you just have to grind it out.

#promoted #IBD Partner




Chop, chop, what to do?

HCPG #IBD Partner

With the market smack in the SPY 255 – 270 range we’re not finding that many candidates for swing trades that we think will follow through as most of them (we tested a few last week) are just fluctuating up and down with the choppy tape. One strategy we like going forward for potential trades is to look for

a) stocks that fit our momentum criteria in terms of fundamentals and technical action

b) out of stocks that fit first criteria, those that have decent technical patterns

c) put on watch-list post earnings for potential trades.

Reality is that some will gap down, some will gap up too much, so actually in the end only a small portion will trigger.   But doing the homework for a bunch to find the one is  a reality of the grind part of this job.

So here it is step by step:

1. First we set up a screen on MarketSmith that we like for momentum (we called it momo) and it spit out over 67 candidates:

This screen combines momentum fundamentals (strong growth) and technicals:

2.  Out of the 67 stocks we look for recognizable patterns that we like (and if you want help with that you can choose to turn on Pattern Recognition.

3.  Out of the candidates that make that list we look at which ones have earnings on deck.

Here are three for your watchlists:

MA with earnings out May 02 — love the flat base here on the stock near 180.

WYNN with earnings out tomorrow with a nice flat base near 194:

CAT also with earnings out tomorrow and we like it on a breakout of 158:

When in trending markets it’s easy to find swing candidates.  When in range markets like this stocks often need earnings boosts to leave range.   This is an easy strategy to copy — either set up screens for your own criteria as we did above, or go through pre-determined lists such as the ones in IBD 50  which you know will already have solid fundamentals and price action.

Hope that helps and that you’re enjoying the blog.   If you want to try out MarketSmith for a trial click here.