Double Trouble

Market bounced back after yesterdays carnage. The market will take some time to reveal its intended direction. In the meanwhile earnings based breakouts had a good day today. In most circumstances a good earnings always creates excitement. Those who understand the earnings game are quick to jump on such opportunities.

Market Monitor

Total 4% plus bullish breakouts=105
Total 4% plus bearish breakouts=56
65 day bullish/bearish ratio= 677/279
Stocks up 50% or more in a month=7
Stocks up 25% or more in a month=64
Number of stocks with 100% plus move =321
Number of stocks up 200% or more = 69
4% plus signals for 100plus universe=21
4% plus signals for 200plus universe=5


Select stocks which had 100% plus move in last 260 days from the low and which are up more than 4% on higher volume. Today's minimum volume is above 100000. To understand how to trade this see my earlier post "How to find a stock which makes 1500% move in a year"

AKS,Ak Steel Holding Corp (Google  Yahoo  Earnings  Chart) 
AMSF,Amerisafe Inc (Google  Yahoo  Earnings  Chart) 
ANGN,Angeion Corp (Google  Yahoo  Earnings  Chart) 
APAC,Apac Customer Services (Google  Yahoo  Earnings  Chart) 
CBLI,Cleveland BioLabs Inc (Google  Yahoo  Earnings  Chart) 
CLN,Celsion Corp (Google  Yahoo  Earnings  Chart) 
DECK,Deckers Outdoor Corp (Google  Yahoo  Earnings  Chart) 
GNLB,Genelabs Technologies (Google  Yahoo  Earnings  Chart) 
ICE,Intercontinental Exchange Inc (Google  Yahoo  Earnings  Chart) 
ICGN,Icagen (Google  Yahoo  Earnings  Chart) 
NETC,Net Servicos De Comunicado Ads (Google  Yahoo  Earnings  Chart) 
OFI,Overhill Farms Inc (Google  Yahoo  Earnings  Chart) 
PRKR,Parkervision Inc (Google  Yahoo  Earnings  Chart) 
PTT,Vcg Holding Copr (Google  Yahoo  Earnings  Chart) 
RBY,Rubicon Minerals Corporation (Google  Yahoo  Earnings  Chart) 
SGXP,SGX Pharmaceuticals (Google  Yahoo  Earnings  Chart) 
SUNH,Sun Healthcare Group Inc (Google  Yahoo  Earnings  Chart) 
SWIM,Investools Inc (Google  Yahoo  Earnings  Chart) 
VSNT,Versant Corporation (Google  Yahoo  Earnings  Chart) 
VTO,Vitro Sociedad Anonima (Google  Yahoo  Earnings  Chart) 
WHT,Westside Energy Corp (Google  Yahoo  Earnings  Chart) 


Stock in the Focus



Amerisafe Inc is a 2006 IPO. It has been up over 113% in last 260 days. The stock broke out few days after earnings in November. Stock has had 5 quarters of triple digit earnings growth. My research shows Episodic Pivots on young companies have high probability of success if backed by earnings.

How to find high probability shorts

If you want to find shorts with 5%-20 opportunities, there are many ways to do it. Those are normal pullbacks in most stocks. But if you want to find long duration plus more profitable 30% plus kind of shorts, the task is slightly more complicated.

The reasons are obvious. Unless you are genetically predisposed to bearish strategies a simple study of worldwide market tells you that there is a steady upward drift in the markets. That is why passive investment and Index based long strategies work so well. So structurally one must accept lower profit on short ideas. The other problem is you will find very few smooth waterfall moves down. While you will find many smooth multi year up moves on stocks.

So given all those constrains in my scheme of things short is a low priority trading opportunity. Unless there are no compelling longs I don't look at shorts. However I have spent significant time and effort developing some profitable short strategies. Because under certain circumstances they offer good opportunities.

The central concept behind most of my short ideas is based on the post I made some time ago - Earnings expectations and Cinderella Strategy. Essentially you must find a earning torpedo. If you find it on high growth stocks, which has been bid up a lot and is the darling of big funds, you get one smooth ride short. Such things are rare but highly profitable. Catalyst is extremely critical on short side, otherwise usual corrections are quickly bought. A mere miss on earnings may not be best short strategy. What works is if you have a sequence of earnings like say 30, 34, 45, 50, 44, 69, 40, 34. 69 , and then 7 or -20, then there is virtual scramble to get out. Because before the torpedo the stock was favorite of all growth funds

Now how does one find such stocks. One way is to follow the earnings. But there are other problems associated with shorting and that is availability. So after a considerable research and practical experience as a choice I have decided not to look at such stocks on below a certain float thresh hold. Stocks with low floats can make good shorts, but I seldom get a supply of them. So most of the time by choice I concentrate my shorting efforts on 100 million plus float stock.

Now regular readers of this blog know, I am always looking for some short cut to find such stocks. So I have found some pre existing lists which offer you good short candidates. So here are some concepts which will get you high probability shorts:

1. IBD Mutual Fund list: On Page A9 everyday IBD publishes two lists. Largest Positions of funds in Big Cap Index and Largest positions of funds in Value Index. This list changes very slowly. Essentially a fuck up on any one of the stock in the Growth Fund list is great short. Similarly any new addition/subtraction is worth paying attention to. There are only 20 stocks in the list daily. ( This list is also useful for long ideas)
   
2. Trouble after Double: This is all those stocks which have 100% or more growth in last 2 years and float above 100 million and during the move crossed price of 40. On this list I look for 4% down moves for entry. ( All stocks which during last 540 days period doubled from their 260 days low and have a float of 100 million and were priced 40 plus. Don't ask me how to do it in TC2000. You can not do it in that programme.)
3. Episodic Pivots: Here you are again primarily looking for earnings miss or regulatory trouble.
4. Now besides this earlier I have used another ready made list which uses a slightly more advanced concept of torpedo strategy and offers some very good opportunities- Earnings Torpedo Warning list. This list is maintained by Ross School of Business @ the University of Michigan.
   

As usual do your own research before trying any of these. The key is to understand the basic concept.

Next: How I make money reading a newspaper in microscopic detail
James Crammer says Watch TV get Rich. I have found a better way...........

Paternity fight over big crash

The big crash is not a bastard. There are several claiming that they predicted it. I went through my over 500 Google Readers feeds and the usual suspects plus every Tom Dick and Harry is claiming they predicted it.Some have been predicting this for their entire life. Some who were saying Greenspan call was contrary indicator to buy have quickly changed their tune to claim paternity of this crash.

The real issue is markets are not controllable. But your reaction to them is. Your trading methods are completely under your control. Market is what it is. How I react to it is important. For any given time period there is a pool of potential profit available to all market participants. Some have better method of grabbing part of that pool, some have no methods.


Now that the event has happened the big question is what is the game plan. If you think opportunities are on short side or on long side you still need a method to extract that money out of market.

As I have said before in my scheme of things conceptually I look at my trade factory having many conveyor belts. The conveyor belts bring opportunities to me, I inspect and put on trade based on risk and return parameters. Now in this trade factory there is one area for bullish conveyor belts and one for bearish. For several month the well oiled bearish conveyor belts were more or less not bringing much of opportunities. Yesterday the bearish trade factory got humming. So now bearish opportunities will present themselves.

As a speculator all I am interested in is where is the next big opportunity. If it is on bearish side I have well oiled strategies to capitalise from them. Like my long ideas all my short ideas are based on some fundamental structural concepts. Those ideas work best in bearish environment.

So there is no point in getting involved in to all the discusion of who called it right or wrong, what matters is how much you profit from the opportunity the market presents.

Double Trouble

All rallies come to an end. Sometime they end dramatically, like we saw today. From July the market was in rally mode with little pullbacks or correction , so a correction is not a bad thing. If you have made money in last 8 months, the trick is to not give up much of your profit.

Now the next game plan is more important. Again the question is what will maximise profit for a given time frame. To short also you need to find right stocks to short. The stocks likely to go down the most are best shorts. Finding them is much difficult task than finding longs. Because things do not work the same way on short side. Anyone who tells you to do reverse of what you do for long for short has no idea of what he or she is talking about.

So if this correction has legs on downside, you will have opportunities to find low risk high probability opportunities. First and fundamental thing is capital protection. For long term traders better opportunities will show up in few days.

Market Monitor

Total 4% plus bullish breakouts=24
Total 4% plus bearish breakouts=1404
65 day bullish/bearish ratio= 656/281
Stocks up 50% or more in a month=8
Stocks up 25% or more in a month=65
Number of stocks with 100% plus move =294
Number of stocks up 200% or more = 69
4% plus signals for 100plus universe=2
4% plus signals for 200plus universe=1


Select stocks which had 100% plus move in last 260 days from the low and which are up more than 4% on higher volume. Today's minimum volume is above 100000. To understand how to trade this see my earlier post "How to find a stock which makes 1500% move in a year"

SGN,Signalife Inc (Google  Yahoo  Earnings  Chart) 
TATTF,Tat Technol Ltd (Google  Yahoo  Earnings  Chart) 


Now in the midst of this carnage Radioshack managed to make a 12% move. What was the catalyst- earnings announcement. In January it had a high volume day after raising earnings guidance , since then it has gone up about 50%.



Keep a close watch on companies announcing earnings acceleration even during this sell off. That will convince you of the power of earnings as a catalyst.

Market Panics and Niederhoffer

It is easy to lose perspective on days like today. But panics are good for markets. The most important thing to look at is what happens after the panic. Like a rubber ball the markets bounces back.


Victor Niederhoffer often quotes Henry Clews when it comes to market panic:

Henry Clews wrote in Twenty-Eight Years in Wall Street (1887):

But few gain sufficient experience in Wall Street to command success until they reach that period of life in which they have one foot in the grave. When this time comes, these old veterans of the Street usually spend long intervals of repose at their comfortable homes, and in times of panic, which recur sometimes oftener than once a year, these old fellows will be seen in Wall Street, hobbling down on their canes to their brokers’ offices.

Then they always buy good stocks to the extent of their bank balances, which they have been permitted to accumulate for just such an emergency. The panic usually rages until enough of these cash purchases of stock is made to afford a big “rake in.” When the panic has spent its force, these old fellows, who have been resting judiciously on their oars in expectation of the inevitable event, which usually returns with the regularity of the seasons, quickly realize, deposit their profits with their bankers, or the overplus thereof, after purchasing more real estate that is on the up grade, for permanent investment, and retire for another season to the quietude of their splendid homes and the bosoms of their happy families.

Few more days like today and we will be at ideal bounce scenario. So keeping the powder dry is the key.

Readers Questions

In recent days and weeks there has been a flood of new visitors, thanks to the following folks, who have linked to various posts.
http://www.chrisperruna.com/
http://highchartpatterns.blogspot.com/
http://nysetrader.blogspot.com/
http://tradewhileworking.blogspot.com/
http://tyrotrader.blogspot.com/
http://valueblogreview.blogspot.com/
http://stockdaytrading.blogspot.com/
http://www.thekirkreport.com/
http://tradermike.net/
http://greenonthescreen.blogspot.com/

There are lots of mails I am going through currently and answered most of it. If your question is still not answered you should hear by the end of the day.
Here is a quick and dirty summary of most of the things I have said in the individual mails about various issues.


Long Strategies: All things I trade and write about revolves around three basic concepts. Earnings, momentum and neglect. Various strategies are just different versions of same ideas. It is like Coke, Classic Coke, Diet Coke, Vanilla Coke , XXX Coke, etc. versions of same basic strategies.
So if you want to trade them you need a good and deep understanding of those three concepts.
My trading time frames are medium to long durations with most trades lasting weeks to months.

Holy Grail: There is no holy grail. I am not selling any service, no software, no mentoring service and no black boxes. None of this is magical stuff. It will take at least 6 months for anyone to understand and duplicate the strategies.Lot depends on market circumstances, some things do not work under some circumstances. That does not mean the strategy is wrong.


Trading set up: I am surprised by number of questions on this. All I have is two old computers and one laptop. I use Worden brothers TC2000 for data. I also have Amibroker, which I rarely use. From TC2000 software I pull data in to my own data analysis and trading system development software and bulk of my systems operate on it.
I use Interactive Brokers.


Scans: All scans I have mentioned so far are in TC2000. When trying to use them in other programmes be careful of volume parameters because TC uses different volume parameters.


Returns: I do not disclose my returns, but I am profitable for last 6 years and have outperformed market by large margins. How much you will make out of these strategies depends on how you execute them, how much you understand them and above all what kind of risk management strategies you use. I get high returns because I classify my ideas as A, B, C, class ideas and risk different amounts on different ideas (A-10%, B-up to 5% and C1%). Also I vary my risk based on market phases. I also vary my risk based on how much I am up for a year. If early in the year I have high returns then I risk more on some ideas in subsequent months. That can make significant difference to your returns.

Lot of you have asked for recommended books. I will by the end of this week put together a list of 5 to 10 books or resources which might be helpful.

Weakness is good

Looks like we are gapping down. Now the action like what you see today is coming after a long and enduring rally. So it is not a bad thing. Now the usual perma bears will be dancing in the street saying we told you so. But if you want to make money, you should not be very worried. And also if you want to make money in a market with 100 years of updrift, you should any way never follow perma bears.

Most sell offs have an intense selling phase. This last few days or few weeks. The risk is highest during such periods on existing positions depending on where your entry was. The moment the intense phase gets over, slowly you will find the 100% list blossoming again. In fact you will find very good set ups after few days of weakness.

On an individual stock if there is a catalyst, barring the intense sell off phase, you would find it will still rally. The universe narrows and you might need larger stops but there are opportunities.

On the short side you will find good opportunities in the same 100% plus universe once the market turns. Later I will talk about how using the same concept of 100% plus moves in 260 days you can build a short system. It works best when market reverses after a long rally.

Later: How to find high probability shorts

Just buy the dips

The market character has undergone a change in last few days. It is a slow process and many new themes are emerging. Some old themes have for the time being run their course. In a rally of long duration, such correction zones are a bit tricky because if you remain on sideline the new emerging sector rallies you will miss out. If you short at this stage you will need good heart to hold through some nice volatility.

Some things are clearly visible. The large caps are no more the favorite. Some sectors like financials, brokers, airlines, etc. have entered correction zones after strong rallies. The small caps are back in action. More than that several new sectors are emerging as likely to take on leadership. The health care/biotech sector continues to find buy interest. But again the kind of companies leading in the sector are not the ones people are most familiar with. The Internet related sector is also attracting buying. Similarly some software companies are also in recent up trends. The commodity sector and alternative energy sector has seen the largest number of breakouts in recent 20 days. The most attractive sector currently is funeral services!!!!

CSV a funeral services company with episodic pivots

While the sector action is interesting, it is individual stocks where most of the action is for individual traders. Upside breakouts continue to exceed downside breakouts and for almost 10-15 days the breakouts above 4% have been 100 plus. So this still looks like sector rotation and churning.

In few weeks the markets attention will shift to next earnings and some stocks will start breaking out in anticipation. One thing to watch closely is analysts future earnings estimates revisions. The ratio is moving up currently for 2007.

Double Trouble

The Index weakness today was deceptive. For the first time in this rally the 100% plus universe has crossed 400 today. As I have said earlier, this number can go up to 1200 plus in healthy rally and the 200% plus number exceeds 300 by the end of rallies.
If you look at number of breakouts in the universe , it has increased sharply to 36 indicating buyers still at work. So far the market action looks like garden variety sector rotation and post earning season selling in some sectors.


Market Monitor

Total 4% plus bullish breakouts=109
Total 4% plus bearish breakouts= 66
65 day bullish/bearish ratio= 957/193
Stocks up 50% or more in a month=13
Stocks up 25% or more in a month=139
Number of stocks with 100% plus move =402
Number of stocks up 200% or more = 90
4% plus signals for 100plus universe=36
4% plus signals for 200plus universe=6

Select stocks which had 100% plus move in last 260 days from the low and which are up more than 4% on higher volume. Today's minimum volume is above 100000. To understand how to trade this see my earlier post "How to find a stock which makes 1500% move in a year"

Select breakouts from the list:

EVOL,Evolving Systems Inc (Google  Yahoo  Earnings  Chart) 
FTEK,Fuel Tech Inc (Google  Yahoo  Earnings  Chart) 
INCY,Incyte Corp (Google  Yahoo  Earnings  Chart) 
MFRI,Mfri Inc (Google  Yahoo  Earnings  Chart) 
OMRI,Omrix Biopharmaceuticals Inc (Google  Yahoo  Earnings  Chart) 
RIMM,Research In Motion Ltd (Google  Yahoo  Earnings  Chart) 
SONS,Sonus Networks Inc (Google  Yahoo  Earnings  Chart) 


OMRI almost trippled from its first episodic pivot. The second major episodic pivot on earnings annuncement was another good entry point.

Episodic pivots on INFY

A reader asked me my opinion on INFY. Now as regular readers know the hazards of commenting on any single stock. Many times those opinion do not matter because what is important is methodology. But I sent him the following chart of INFY with episodic pivots marked on it. My studies show , further away from the episodic pivots you buy, more risky it is. In fact one of the systems I am experimenting with is to use the price move from such episodic pivots to identify possible short candidates.

Episodic Pivots on stocks up 50% plus in a month- Part3

Episodic Pivots on stocks up 50% plus in a month- Part2

Episodic Pivots on stocks up 50% plus in a month- Part1

As of now there are 14 stocks in the Stocks up 50% or more in one month list. Two of them ADZA and PREM are related to mergers. So we have 12 stocks. What I did is put the markers where they appeared in episodic pivot scans. They are the green and blue spikes in last two panels.
Out of the 12 I have positions in or closed positions in 8. All of these stocks came through the Episodic Pivots scan.

ACY,Aerocentury Corp (Google  Yahoo  Earnings  Chart) 
ADZA,Adeza Biomedical (Google  Yahoo  Earnings  Chart) 
CBLI,Cleveland BioLabs Inc (Google  Yahoo  Earnings  Chart) 
FSLR,First Solar Inc (Google  Yahoo  Earnings  Chart) 
HDNG,Hardinge Inc (Google  Yahoo  Earnings  Chart) 
JADE,Lj Internat Inc (Google  Yahoo  Earnings  Chart) 
KRSL,Kreisler Manufacturing (Google  Yahoo  Earnings  Chart) 
NM,Navios Maritime Holdings Inc (Google  Yahoo  Earnings  Chart) 
ONXX,Onyx Pharmaceuticals Inc (Google  Yahoo  Earnings  Chart) 
PREM,Premier Community Bnkshrs (Google  Yahoo  Earnings  Chart) 
REFR,Research Frontiers Inc (Google  Yahoo  Earnings  Chart) 
TRT,Trio-Tech Internat (Google  Yahoo  Earnings  Chart) 
TSL,Trina Solar Ltd. (Google  Yahoo  Earnings  Chart) 
XIDE,Exide Tech (Google  Yahoo  Earnings  Chart) 








The remaining stocks in next post as blogger did not allow more pictures.

Episodic Pivots and "Idea Pickle"

Studying episodic pivots on daily basis can be profitable strategy. It is not a purely mechanical strategy. The starting point of the idea was my study to find what leads a stock to move rapidly in short time period. Or what triggers a 100% plus move in a stock in a year. Or 50% move in a month or 25% plus in a quarter.

Majority of the stock in the list had one day 10% or plus move within first 20 to 25% of their 100% or more growth in 260 days. So I framed the question as "Can a one day move signal something about future returns". Initially I tried to look at it as purely mechanical thing, but it was not very useful.There were too many stocks. So I abandoned it.

Most of the time when I abandon a concept, I put it in "Idea Pickle" jar. This is a long term practice I have used for several years, where I put half baked or promising ideas in a jar to pickle. Revisiting them after some days or months sometimes gives you a completely new idea. I have several of such "Idea Pickle" jars to ensure I never run out of ideas. Not all are related to trading , in fact most are related to new business ideas or other stuff.

Some months after I stopped working on the idea, I read a book:Swing Trading:Power Strategies to Cut Risk and Boost Profits by Jon D.Markman. There is not much useful information in that book except for one system. It describes a trading system used by George Fontanills. It is a system based on price and volume.

Now if you know Fontanills, he sells a 3000 dollar option course which basically tells you if you want to master these strategies then you need to buy another $5000 platinum course and so on. So when I read it at first I was very skeptical of it. But then I remmbered my "idea Pickle". So I investigated it further.

The system in short as per the book:

" Basically it comes down to finding stocks with greatest short term momentum that will turn in to long term momentum."
The Scans:
1 up or down 30% in a single day on at least 300000 shares traded or
2 up or down 20% in a single day on at least 1 million shares traded or
3 up or down 5$ in a single day on volume of at least one million shares and
4 still trading above $7 and
5 has options
6 has a long term catalyst like earnings or accounting fraud

He buys options on it after few days , typically such stocks after a pause tend to move up or down.

Now I played around it a bit but could not find good results. So I put the idea aside again in the "idea Pickle" jar. Last year I revisited this concept when I saw Mark Minervini site where he put up a list of his past trades. After close xamination I found that most of them were triggered by news pivots and the entries were post such high volume spikes. So that set off a bell in my head.

I revisited that Fontanills concept and my original price volume spike idea and converted it in to hybrid strategy of using a discretionary filter to eliminate some Episodic Moves.

The basic idea is to study large one day move to find stock likely to go up.

I changed the Fontanills scan a bit and added some more scans to it. So here are the scans in TC2000 for it
Bullish
1 ( 100 * (C - C1) / C1) >= 20 AND V > 10000 AND C >= 5
2 ( 100 * (C - C1) / C1) >= 30 AND V > 3000 AND C >= 5
3 (C - C1) >= 5 AND V > 10000 AND C >= 5
4 ( 100 * (C - C1) / C1) >= 10 AND V > 1000 AND C >= 5
5 C > C1 AND V > 5 * AVGV50.1 AND V > 3000 AND C > 5
These five seperate scans give the bulish pivot list
Bearish
1 ( 100 * (C - C1) / C1) <= ( - 20) AND V > 10000 AND C >= 5
2 ( 100 * (C - C1) / C1) <= ( - 30) AND V > 3000 AND C >= 5
3 (C - C1) <= ( - 5) AND V > 10000 AND C >= 5
4 ( 100 * (C - C1) / C1) <= ( - 10) AND V > 1000 AND C >= 5
These give bearish pivot candidates.

Together the scans give you less than 20 to 25 candidates to work with daily. After that I analyse each for why it is up or down to isolate the catalyst. Most of the time it is earnings, biotech news break, insider buying, major sector breakout or some news.

I enter the 1-2 with clear catalyst and where the move is just starting. Most of them I research during the day itself and enter,some next day.Many I enter later. I have also created same scans for stocks priced less than 5.

After a trial and error and building a database of such episodic pivots over some time now I have got a list of high probability events and low probability events. Earnings, new product, analyst earnings change, increased earnings guidance, sector moves etc have high probability to trigger multi month rallies.Like this I have around 12 Episodic Triggers which have high probability of starting off a 100% plus move. James Crammer, Barron's, WSJ, and other publication mentions, analyst upgrade etc. have a low probability of follow through.

After such experimentation the hybrid concept as of now has climbed to the best performing strategies amongst my pool of 20 odd strategies, beating even my earning lead breakouts strategy(which was the best strategy in my pool of strategies so far).Obviously most of the earnings lead breakouts also figure in the Episodic Pivot list.

Sometime revisiting an abandoned concept works and sometime a semi mechanical approach is better than purely mechanical approach.The Episodic Pivots approach gives you really really top quality ideas to focus on. But it is not purely mechanical.

Other Related Posts:
Episodic Pivots on stocks up 50% plus in a month- Part1
Episodic Pivots on stocks up 50% plus in a month- Part2
Episodic Pivots on stocks up 50% plus in a month- Part3
Up stocks and down stocks

Finding flat bases and cups with handle

The technical analysis believers like flat bases and cup with handle. In the CANSLIM approach also there is lot of stress on chart patterns like flat bases, cup and handle and double bottom at top of the range. All these pattern essentially indicate stalled price action on the charts. It is a different and visual interpretation of the concept that long term momentum is good but to time low risk entry you should find a weakness on smaller time frame. So essentially you want to find a swing point for entry from where stock is likely to make another major move in the direction of previous major move.

If you can identify such stocks in advance then you can anticipate an entry. Some people calculate complicated pivot points on such stocks down to few cents and put conditional orders at those points. If you see the Investors Business Daily weekly 85-85 list or IBD 100 list, they have such stocks with black border.

Similarly everyday Investor Business Daily in their NYSE Stocks in the News and NASDAQ stocks in the news page have 2 stocks which are first two in that list of stocks which usually have the ideal IBD patterns and also those stocks by IBD standards are ready to breakout.

Most of the time if you read carefully it will also have exact buy points mentioned. Every day I put those 4 stocks on watchlist and you will often find those stocks breakout within few days or in most cases on the day of their appearance. Similarly notice how many of the stocks which are black boxed in 85-85 or IBD 100 breakout on Monday.

Now one of the ways to use the base universe of 100 % plus movers to find flat bases and cup with handle is to just sort those stocks with 65 day price growth and take bottom 10%. If you go through that list of stocks you will find several flat bases and cup with handle in strongly up trending stocks.

So after doing the same on the 397 stocks up more than 100% from their low in 260 days, I got this list for next week of stocks to watch:

AKAM,Akamai Technologies Inc (Google  Yahoo  Earnings  Chart) 
AKH,Air France KLM (Google  Yahoo  Earnings  Chart) 
AMAG,Advanced Magnetics Inc (Google  Yahoo  Earnings  Chart) 
AMIE,Ambassadors Internat Inc (Google  Yahoo  Earnings  Chart) 
AXTI,Axt Inc (Google  Yahoo  Earnings  Chart) 
BRLC,Syntax-Brillian Corp (Google  Yahoo  Earnings  Chart) 
CBEY,CBeyond Communications Inc (Google  Yahoo  Earnings  Chart) 
FCGI,First Consulting Grp Inc (Google  Yahoo  Earnings  Chart) 
HHGP,Hudson Highland Grp Inc W/i (Google  Yahoo  Earnings  Chart) 
LBY,Libbey Inc (Google  Yahoo  Earnings  Chart) 
LNOP,Lanoptics Ltd (Google  Yahoo  Earnings  Chart) 
MAG,Magnetek Inc (Google  Yahoo  Earnings  Chart) 
MFB,Maidenform Inc (Google  Yahoo  Earnings  Chart) 
OVEN,TurboChef Technologies Inc (Google  Yahoo  Earnings  Chart) 
POZN,Pozen Incorporated (Google  Yahoo  Earnings  Chart) 
RBN,Robbins & Myers Inc (Google  Yahoo  Earnings  Chart) 
RIMM,Research In Motion Ltd (Google  Yahoo  Earnings  Chart) 
RVBD,Riverbed Technologies Inc (Google  Yahoo  Earnings  Chart) 
SOFO,Sonic Foundry Inc (Google  Yahoo  Earnings  Chart) 
TAR,Telefonica De Argentina (Google  Yahoo  Earnings  Chart) 
TRFC,Traffic.com (Google  Yahoo  Earnings  Chart) 
WRSP,WorldSpace Inc (Google  Yahoo  Earnings  Chart) 


Now if you go through the list it is full of stocks with flat bases and cups with handle. If you further narrow down the list by earnings or any other criteria you have 4-5 good candidates to anticipate entries on. So instead of buying a breakout after a stock has gone up 4% you can anticipate a breakout and enter with a pre defined buy stop. That way you can capture a part of the breakout move.

If you want to go even further in to microscopic details, then you can find out the required volume and price action for a breakout and break it down by hours or minutes and if you see a stock meeting that condition in first one hour of trading then you buy. So that you can benefit from the 5 to 10 dollars move in a stock on day of breakout. This can further reduce your risk on entry by reducing the distance from breakout price. That is how the list on first page of Investors.com is generated under the heading Stocks On The Move. The list is calculated by using hourly equivalent of the the percentage up or down in trading volume of a stock compared to its average daily volume over the past 50 days.(The average 50 day figure is divided by number of trading hours and given a certain weight for first few hours and when the trading volume exceeds that level, the stock appears on that list).

Another very microscopic detail which can help you fine tune your entries.

Double Trouble

RTI and FFH were two stocks from the earnings breakout list. Now the earnings information was available early morning itself. The study of episodic pivots helps you in to getting such moves based on probability. Both were low risk trade from early morning. The earnings season has proved to be very good and more than 25 candidates showed up which offered 20% plus returns and some offered 5 to 10 points moves in few days.

Following the earning lead breakout can give you good insight in to markets reaction to earnings.Take RTI, it had a earning acceleration some 10 quarters back. Since then in 7 out of 10 quarters it has had triple digit earnings growth and in the process gone up from around 12 to 92. Now how many stocks have those kind of triple digit earnings growth for that period of time. It has an annualised EPS growth of 341%. Similar to tracking 100% plus movers, if you track stocks making triple digit earnings growth or more, you will find some very good long term winners. It might even lead to few triple digit years for your portfolio.

Market Monitor

Total 4% plus bullish breakouts=111
Total 4% plus bearish breakouts= 48
65 day bullish/bearish ratio= 964/187
Stocks up 50% or more in a month=19
Stocks up 25% or more in a month=154
Number of stocks with 100% plus move = 397
Number of stocks up 200% or more = 89
4% plus signals for 100plus universe=21
4% plus signals for 200plus universe=4

Stocks which had 100% move in last 260 days from the low and which are up more than 4% on higher volume. Today's minimum volume is above 100000. To understand how to trade this see my earlier post "How to find a stock which makes 1500% move in a year".
ASTI,Ascent Solar Technologies Inc (Google  Yahoo  Earnings  Chart) 
FFH,Fairfax Financial Holdings (Google  Yahoo  Earnings  Chart) 
GLBC,Global Crossing Ltd (Google  Yahoo  Earnings  Chart) 
HOTJ,House of Taylor Jewelry Inc (Google  Yahoo  Earnings  Chart) 
MSI,Movie Star Inc (Google  Yahoo  Earnings  Chart) 
RTI,Rti Internat Metal Inc (Google  Yahoo  Earnings  Chart) 
UCTT,Ultra Clean Holdings (Google  Yahoo  Earnings  Chart) 

Microscopic details

To build a successful strategy you need a structural concept. A concept rooted in the market structure or behaviour. It should be enduring concept. Most of these concepts are in public domain.

Value investing has been around for ages so is growth. Or say earnings drive prices is a concept. It is not a great secret. Or say momentum leads to momentum is a concept. Or buybacks are good for future returns is a concept. Similarly insider trading behaviour is an indicator of long term price growth is a concept. None of the structural concepts are big secrets. But making it work in real trading situation determines your success. Given the same concept some traders pull in millions from market, some struggle to make 10%.

The process of making a concept work involves getting in to microscopic details. Most of the time the failure to implement a strategy lies in not putting in sufficient effort in to the microscopic details.

Getting in to microscopic details of an idea is an ability plus involves some skills. Many people temperamentally lack that skills. Expertise or insights come from purposefully engaging in such activities.

Many years ago at the beginning of my corporate career I worked with a brilliant and award winning copywriter. It was a great learning experience. Given a new product he would spend days getting in to microscopic details about everything about the product, product manufacturing process, product history, competitors and the works. He would drive clients crazy with his questions.Ecasperated clients would say enough of questions, show me the advertising.

He would read everything on the product including fine prints, legal footnotes, chemistry and the works. By the end of the assignment he would know as much or more about the product as the client. At the end of the day his output might be just one line of copy or slogan, but what made that line unique was it was based on microscopic understanding of the product and its market. I have used that approach again and again for many years with great success.

Some years back I taught a course in marketing for MBA students. One of my first assignment was for them to read end to end every single word on a particular 800 pages book on marketing and summarise it. That almost lead to a mutiny.A parent lashed out at me in a public place for making the students do it. Now I get emails from them after 6-7 years saying that was their biggest learning experience and how they hated it that time.

The very idea of going in to microscopic details turns many people off. Most of the successful people I have studied have the twin ability, ability to think in conceptual terms and also to think in microscopic details.

For sometime I have been exchanging emails with some traders and some new traders. One of my suggestion to them is say if you believe that earnings based approach has merits then get in to microscopic details of it and you will be very profitable. Same is true of momentum based approach. Some understand it some want quick fix solution.

There are many takers for promises of riches , but few are ready to put in the effort required to get their.

MSI.- Movie Star Inc

A lingerie company in 'Double Trouble' universe that tripled in few months......



An earnings release and talk of strategic alternatives lead to a breakout on November 15. It was in the 100 plus watchlist soon. The white spikes in the bottom panel indicates 4% plus move days on high volume. They are possible buying point. Stock has almost tripled since then.

The earnings news which kicked off the move.

New York, New York (November 14, 2006)—Movie Star, Inc. (AMEX: MSI), today announced improved financial results for the 2007 fiscal first quarter ended September 30, 2006.

For the fiscal 2007 first quarter, net sales increased 37.1% to $18,690,000 from $13,637,000 in the same period last year. Gross margin, as a percentage of sales, was 31.2% for the fiscal 2007 first quarter compared with 27.2% in the fiscal 2006 first quarter. Selling, general and administrative expenses were $5,026,000 compared to $4,215,000 in the fiscal 2006 first quarter, an increase of $811,000. Net income for the fiscal 2007 first quarter was $366,000, or $0.02 per diluted share, compared to a net loss of $371,000, or a loss of $0.02 per share, for the first quarter of fiscal 2006.

Mel Knigin, President and Chief Executive Officer, stated: “We began fiscal 2007 more optimistic about the Company’s business outlook than we have been for some time and that optimism continues today. The hurdles we faced last year are behind us, allowing us to fully concentrate on improving our operations. Our gross margins increased significantly as a result of a better product mix and lower overall allowances and chargebacks. The increase in selling, general and administrative expenses was primarily the result of a $540,000 increase in professional fees. The increase was due to our continuing exploration of our strategic alternatives to maximize shareholder value, including discussions with a private apparel company with respect to a possible combination of the companies. TTG Apparel, LLC, which beneficially owns 22.4% of our outstanding common stock, is a majority stockholder of the private company. Consequently, we established a special committee of independent directors to consider this transaction and our strategic alternatives. The special committee has retained a financial advisor, Chanin Capital Partners, and legal counsel. We caution that no assurances can be made that the exploration of strategic alternatives, including the discussions with the private apparel company, will result in a transaction. We also do not intend to disclose developments with respect to these matters unless and until we enter into a specific transaction or the process is otherwise completed.”

One of the ways to find such sexy companies is to look at the catalyst behind the breakouts. Normally earnings lead breakouts have legs.

Episodic Pivots

A positive earnings report from Analog Devices (ADI) ignited the semiconductor sector which has been a laggard for a while. These are the kind of episodic pivots worth tracking for long term investor.

The earning report from ADI and forward guidance brought in new piece of information which was immediately acted upon by market participants. Number of stocks in the sector reacted to the news immediately. Similarly few weeks ago a news from one auto component maker triggered a group move. Same is true of solar stocks where a news in mid January triggered a rally in the group and Trina Solar TSL, doubled since then.

Many times a news from one stock in the industry kicks off a multi month or multi year rally in the industry group. Often the stock which makes the announcement may or may not be the best buy on such news but other stocks which reacts to the news if they are already in rally mode or have better earnings take on leadership.

Double Trouble

More stocks are breaking out and fresh sectors are joining the rally. At the same time some stocks which had a great run up so far are correcting. Those who overstay momentum stocks or buy very late in the move are left holding the bag. Many rookies have no idea as to how much a stock has moved in a year or from its last major episodic pivot and they invariable end up buying right at the top. While long term momentum is good, to time your entry in to a momentum stock it is less risky if it has a short term weakness.


Market Monitor

Total 4% plus bullish breakouts=166
Total 4% plus bearish breakouts= 39
65 day bullish/bearish ratio= 977/195
Stocks up 50% or more in a month=18
Stocks up 25% or more in a month=30
Number of stocks with 100% plus move = 391
Number of stocks up 200% or more = 92
4% plus signals for 100plus universe=28
4% plus signals for 200plus universe=8

Stocks which had 100% move in last 260 days from the low and which are up more than 4% on higher volume. Today's minimum volume is above 100000. To understand how to trade this see my earlier post "How to find a stock which makes 1500% move in a year".

AMIE,Ambassadors Internat Inc (Google  Yahoo  Earnings  Chart) 
BDSI,Biodelivery Sciences Intl Inc (Google  Yahoo  Earnings  Chart) 
BPA,Biosante Pharmaceuticals (Google  Yahoo  Earnings  Chart) 
BRKR,Bruker Biosciences Corp (Google  Yahoo  Earnings  Chart) 
BRLC,Syntax-Brillian Corp (Google  Yahoo  Earnings  Chart) 
BTJ,Bolt Technology Corp (Google  Yahoo  Earnings  Chart) 
GRIL,Grill Concepts Inc (Google  Yahoo  Earnings  Chart) 
GVP,Gse Systems Inc (Google  Yahoo  Earnings  Chart) 
PNTR,Pointer Telocation Ltd Ord (Google  Yahoo  Earnings  Chart) 
VCLK,Valueclick Inc (Google  Yahoo  Earnings  Chart) 

Fast Moving Stocks

At any given time there are handful of stocks which make a fast and furious move in a compressed time frame.You can look at the move in a day, week,month, quarter, six month, and a year. Now if you know 20 stocks were up more than 50% in month that is a very valuable information. Similarly if you know 96 stocks were up 200% or more in 260 days, it gives you a clear idea about the kind of potential possible in the market.

If you are a day trader potentially if you get in to the best moves in a day, the rewards can be astronomical. Similarly for a swing trader the advantage of finding such moves is low risk entry and best utilisation of the capital. Same concept applies to long term traders.

What triggers such moves. Can they be predicted in advance. Can you isolate some probable factors which lead to such moves. Is there a way to identify the move half way through the move. Can one identify low risk entry point in to such moves.

Most times in life the answer depends on the questions you ask. There are largely two types of people, one kind who looks at a information and strategy and accepts that as given fact or in other word looks out of a window of opportunity and say nice view and move on. But there are other kind of people in the world, when they encounter a window of opportunity, they jump out, explore the world behind that window and find more windows of opportunities. Innovators, leaders, successful people in life generally have a well developed ability to jump out of windows.

Now if you start with the questions related to fast moving stocks in a compressed time frame, you will find answers to some part of the puzzle. If you ask right kind of questions, you will find right kind of answers. Once you have a keen insight in to the alchemy of fast moving stocks in compressed time frame you can build a variety of strategies to exploit that learning. You can build day trading strategies around it, you can build long term strategies.


Here are 19 stocks which have made a 1100% to 200% move in a very compressed time frame. What can help you identify them at the beginning of move itself or half way through. If you can identify 25% of them in advance with reasonable degree of probability, is that a sufficient and large edge.

ACOR,Acorda Therapeutics Inc (Google  Yahoo  Earnings  Chart) 
ACY,Aerocentury Corp (Google  Yahoo  Earnings  Chart) 
ANGN,Angeion Corp (Google  Yahoo  Earnings  Chart) 
CF,CF Industries Holdings Inc (Google  Yahoo  Earnings  Chart) 
FRPT,Force Protection Inc (Google  Yahoo  Earnings  Chart) 
FTGX,FiberNet Telecom Group Inc (Google  Yahoo  Earnings  Chart) 
HTI,Halozyme Therapeutics Inc (Google  Yahoo  Earnings  Chart) 
IDP,Idera Pharmaceuticals Inc (Google  Yahoo  Earnings  Chart) 
JADE,Lj Internat Inc (Google  Yahoo  Earnings  Chart) 
MAMA,Mamma.com Inc (Google  Yahoo  Earnings  Chart) 
PNCL,Pinnacle Airlines (Google  Yahoo  Earnings  Chart) 
PTT,Vcg Holding Copr (Google  Yahoo  Earnings  Chart) 
REFR,Research Frontiers Inc (Google  Yahoo  Earnings  Chart) 
SLP,Simulations Plus Inc (Google  Yahoo  Earnings  Chart) 
SYX,Systemax Inc (Google  Yahoo  Earnings  Chart) 
TRA,Terra Industries Inc (Google  Yahoo  Earnings  Chart) 
TRCR,Transcend Services Inc (Google  Yahoo  Earnings  Chart) 
VII,Vicon Industries Inc (Google  Yahoo  Earnings  Chart) 
XIDE,Exide Tech (Google  Yahoo  Earnings  Chart) 

Double Trouble

The move on some stock is coming to an end. There were number of high flying stocks like TNH, MFW, ACY, VIP, CROX, etc. had reversals on high volume. More stocks will have similar moves in coming days as they run out of fresh buyers.
Now onwards whenever there are more than 10 breakouts in the 100 list. I will put up only select few stocks out of the list.So today there are 9 stocks out of total 33 in the scan.

Market Monitor

Total 4% plus bullish breakouts=155
Total 4% plus bearish breakouts= 45
65 day bullish/bearish ratio= 932/198
Stocks up 50% or more in a month=19
Stocks up 25% or more in a month= 156
Number of stocks with 100% plus move = 391
Number of stocks up 200% or more = 96
4% plus signals for 100plus universe=33
4% plus signals for 200plus universe=12

Stocks which had 100% move in last 260 days from the low and which are up more than 4% on higher volume. Today's minimum volume is above 100000. To understand how to trade this see my earlier post "How to find a stock which makes 1500% move in a year".

ATI,Allegheny Technologies (Google  Yahoo  Earnings  Chart) 
BSM,BSD Medical Corp (Google  Yahoo  Earnings  Chart) 
BSQR,bSquare Corp (Google  Yahoo  Earnings  Chart) 
CECE,Ceco Environmental Corp (Google  Yahoo  Earnings  Chart) 
CTEL,City Telecom Hk Ltd Ads (Google  Yahoo  Earnings  Chart) 
GTXI,Gtx (Google  Yahoo  Earnings  Chart) 
PNSN,Penson Worldwide Inc (Google  Yahoo  Earnings  Chart) 
PSPT,Peoplesupport Inc (Google  Yahoo  Earnings  Chart) 
RCCC,Rural Cellular Corp (Google  Yahoo  Earnings  Chart) 

Up stocks and down stocks

Selected stocks up or down 10% or more or up or down 5 points or more. Primarily the list is for generating multi-day long short ideas. Not every stock on this list qualifies, in fact very few qualify as long term buy and sell.

Sometimes a major one day move kicks off a multi-month or multi-year rally.Most of such significant moves are precipitated by a new information about the company in terms of earnings, new products, new management, new industry dynamics, new discovery, new regulation, new news from sector,new overall market trend, new earning cycle, new pricing power, new merger/takeover industry dynamics, etc. New information creates price shocks.The new information in some case is so significant that it fundamentally alters market participants view of the stock or sector.

Episodic pivots can often offer major low risk buy or sell opportunities.


Down Stocks
BMRN,Biomarin Pharmaceuticals was down on news that its hypertension drug did not beat placebo in trials.

WLK,Westlake Chemical Corp earnings dive due to lower selling prices and unscheduled plant closing.

Up Stocks

ACY,Aerocentury Corp this is an earnings breakout from few weeks ago. It has a small float of 1.02 million. Now in a runaway mode.

ANSS,Ansys Inc earnings

BABY,Natus Medical beats street expectations.

CBLI,Cleveland BioLabs Inc up since January. Driven by new drug under discovery for protecting good cells during cancer radiation. It also had favorable mention in Barron's. Already in episodic portfolio list.

FOSL,Fossil Inc earnings

KBW,KBW Inc recent IPO breaking out on earnings. 15 million float. Earnings tripled in recent quarters. Episodic pivot portfolio .

KRSL,Kreisler Manufacturing stock has doubled in 4 days since its earning lead breakout. Now you know why I focus on earnings lead breakouts. 20-25 plays like this in a quarterly earnings season can be very good for making high returns. Float of 1.0 million.

LCRD,Lasercard Corporation identification technology company up on expectation of large orders after Italy mandated optical national ID. Keep in episodic list.

NYNY,Empire Resorts Inc cleared to build new casino.

POT,Potash Cp Saskatchewan this is a indirect play on corn and ethanol. All those farms need fertilisers.

ROAC,Rock Of Ages Corp death is good business. Funeral services related stocks have risen from multi year slump in recent months. ROAC operates quarries for granite blocks used in cemeteries. It is up on earnings news.

RRST,RRsat Glo Comm Network Ltd Ord recent IPO up on new machine installation news at customer location.

SA,Seabridge Gold Inc up on news of new gold/copper discovery.

SALM,Salem Communications Cla up on news of acquisition of Christian Music Planet.

SPIR,Spire Corp up on new order news

TSL,Trina Solar Ltd. is up after a pullback on earnings. Already in episodic pivot portfolio . Solar energy sector is currently red hot.

TXI,Texas Industries Inc sector move related to FRK acquisition.

UTHR,United Therapeutics Corp earnings lead breakout.

VDSI,Vasco Data Security Intl earnings lead breakout. Already in episodic portfolio. The online security for financial transactions is growth business currently.

VTAL,Vital Images Inc earnings breakout.


XMSR,Xm Satellite Radio Hldgs
merger with SIRI.

Double Trouble

The rally accelerated with 196 stocks in my universe making 4% plus move. Number of stocks are in runaway mode making 40 to 100% moves in few days. Earnings lead breakouts have been doing well in this earning season. The IBD kind growth stocks have also had good couple of weeks.
Because of large number of breakouts today, if you want to reduce the universe sort them by 65 day growth and take the one with lowest 65 day growth. Using that criteria the 5 stocks above 5 are TIE, GEF, CBEY, SPPI and SA.

Market Monitor

Total 4% plus bullish breakouts=196
Total 4% plus bearish breakouts= 46
65 day bullish/bearish ratio= 933/206
Stocks up 50% or more in a month=21
Stocks up 25% or more in a month= 156
Number of stocks with 100% plus move = 394
Number of stocks up 200% or more = 92
4% plus signals for 100plus universe=54
4% plus signals for 200plus universe=16

Stocks which had 100% move in last 260 days from the low and which are up more than 4% on higher volume. Today's minimum volume is above 100000. To understand how to trade this see my earlier post "How to find a stock which makes 1500% move in a year".
ACY,Aerocentury Corp (Google  Yahoo  Earnings  Chart) 
AIRN,Airspan Networks Inc (Google  Yahoo  Earnings  Chart) 
ANAD,Anadigics Inc (Google  Yahoo  Earnings  Chart) 
AOB,American Oriental Bioengineering Inc (Google  Yahoo  Earnings  Chart) 
ARTX,Arotech Corp (Google  Yahoo  Earnings  Chart) 
CALM,Cal-Maine Foods Inc (Google  Yahoo  Earnings  Chart) 
CBEY,CBeyond Communications Inc (Google  Yahoo  Earnings  Chart) 
CBLI,Cleveland BioLabs Inc (Google  Yahoo  Earnings  Chart) 
CF,CF Industries Holdings Inc (Google  Yahoo  Earnings  Chart) 
CMOS,Credence Systems Corp (Google  Yahoo  Earnings  Chart) 
CYTR,Cytrx Corporation (Google  Yahoo  Earnings  Chart) 
DRYS,Dryships (Google  Yahoo  Earnings  Chart) 
EDU,New Oriental Edu And Tech Corp (Google  Yahoo  Earnings  Chart) 
EGHT,8x8 Inc (Google  Yahoo  Earnings  Chart) 
EXM,Excel Maritime Carriers (Google  Yahoo  Earnings  Chart) 
FRG,Fronteer Development Group Inc (Google  Yahoo  Earnings  Chart) 
FRPT,Force Protection Inc (Google  Yahoo  Earnings  Chart) 
GEF,Greif Brothers Corp A (Google  Yahoo  Earnings  Chart) 
GIGM,Gigamedia Limited (Google  Yahoo  Earnings  Chart) 
GPK,Graphic Packaging Intl (Google  Yahoo  Earnings  Chart) 
HMIN,Home Inns and Hotels Management (Google  Yahoo  Earnings  Chart) 
HRT,Arrhythmia Research Tech (Google  Yahoo  Earnings  Chart) 
ICGN,Icagen (Google  Yahoo  Earnings  Chart) 
JADE,Lj Internat Inc (Google  Yahoo  Earnings  Chart) 
KRSL,Kreisler Manufacturing (Google  Yahoo  Earnings  Chart) 
LSCO,Lesco Inc (Google  Yahoo  Earnings  Chart) 
MDV,Medivation Inc (Google  Yahoo  Earnings  Chart) 
MOVI,Movie Gallery Inc (Google  Yahoo  Earnings  Chart) 
NRPH,New River Pharmaceuticals Inc (Google  Yahoo  Earnings  Chart) 
NYNY,Empire Resorts Inc (Google  Yahoo  Earnings  Chart) 
ONT,On2.Com Inc (Google  Yahoo  Earnings  Chart) 
PAE,Peace Arch Entmt Grp Inc (Google  Yahoo  Earnings  Chart) 
PRH,VitaCube Systems Holdings Inc (Google  Yahoo  Earnings  Chart) 
PTT,Vcg Holding Copr (Google  Yahoo  Earnings  Chart) 
REFR,Research Frontiers Inc (Google  Yahoo  Earnings  Chart) 
ROCM,Rochester Medical Corp (Google  Yahoo  Earnings  Chart) 
SA,Seabridge Gold Inc (Google  Yahoo  Earnings  Chart) 
SBGI,Sinclair Broadcast Gp A (Google  Yahoo  Earnings  Chart) 
SHS,Sauer-Danfoss Inc (Google  Yahoo  Earnings  Chart) 
SIGM,Sigma Designs Inc (Google  Yahoo  Earnings  Chart) 
SNCR,Synchronoss Technologies Inc (Google  Yahoo  Earnings  Chart) 
SPPI,Spectrum Pharm Inc (Google  Yahoo  Earnings  Chart) 
SWS,Sws Group Inc (Google  Yahoo  Earnings  Chart) 
SYX,Systemax Inc (Google  Yahoo  Earnings  Chart) 
TAG,Tag-It Pacific Inc (Google  Yahoo  Earnings  Chart) 
TBWC,Tb Woods Corp (Google  Yahoo  Earnings  Chart) 
THK,Think Partnership Inc (Google  Yahoo  Earnings  Chart) 
THLD,Threshold Pharmaceuticals (Google  Yahoo  Earnings  Chart) 
TIE,Titanium Metals Corp New (Google  Yahoo  Earnings  Chart) 
TNH,Terra Nitrogen Co L.P. (Google  Yahoo  Earnings  Chart) 
TTEC,Teletech Holdings Inc (Google  Yahoo  Earnings  Chart) 
TWW,Terremark Worldwide Inc (Google  Yahoo  Earnings  Chart) 
VDSI,Vasco Data Security Intl (Google  Yahoo  Earnings  Chart) 
VIP,Vimpel Communication Ads (Google  Yahoo  Earnings  Chart) 

Up stocks and down stocks

Selected stocks up or down 10% or more or up or down 5 points or more. Primarily the list is for generating multi-day long short ideas. Not every stock on this list qualifies, in fact very few qualify as long term buy and sell.

Sometimes a major one day move kicks off a multi-month or multi-year rally.Most of such significant moves are precipitated by a new information about the company in terms of earnings, new products, new management, new industry dynamics, new discovery, new regulation, new news from sector,new overall market trend, new earning cycle, new pricing power, new merger/takeover industry dynamics, etc. New information creates price shocks.The new information in some case is so significant that it fundamentally alters market participants view of the stock or sector.

Episodic pivots can often offer major low risk buy or sell opportunities.

Down Stocks

AMC,American Mtg Acceptance reduces guidance.

CAPA,Captaris Inc earnings/guidance. Sales slipped.

QDEL,Quidel Corp earnings/guidance

TCHC,21st Century Holdings revokes previous guidance.

Up Stocks

BMJ,Birks & Mayors Inc Class A Voting jewelry stores operator up on recent earnings.

CNTF,China Techfaith Wireless Communication Technology Limited a handset application software and handset solution provider based in China, is up on recent earnings news and broker upgrades.

DITC,Ditech Networks Inc the telecom-equipment maker, is up on beating the street estimates.

DTC,Domtar Inc move is related to offer to exchange common shares of Domtar Corporation for common shares of Weyerhaeuser Company.

EGLT,Eagle Test Systems Inc up on no apparent news.

GMET,GeoMet IncVirginia Supreme Court vacated a temporary injunction affecting completion of a pipeline interconnect between a key gas field and an interstate pipeline.


HITT,Hittite Microwave Corp
posted better-than-expected fourth-quarter results and offered an earnings guidance above Wall Street's forecast.File under episodic pivot buy list.

HURC,Hurco Companies Inc earnings/guidance

JRJC,China Finance Online Co Ltdwhich provides online data on securities that trade on mainland bourses has been volatile in last couple of weeks. Earnings are scheduled for 27 th Feb.

KRSL,Kreisler Manufacturing follow through from recent earnings lead breakout.

LTXX,Ltx Corp earnings/analyst upgrade

MCBF,Monarch Community Bancorp Inc going private.

MHK,Mohawk Industries Inc carpet and flooring company reported better-than-expected fourth-quarter earnings

ONXX,Onyx Pharmaceuticals Inc follow through from recent post earnings breakout.

PCR,Perini Corp fourth-quarter earnings were more than double Wall Street's expectation.

SLP,Simulations Plus Inc is up over 437% in last one year from low. The move was triggered by Roche order in December. Since then there has been more customer acquisitions. Already in episodic pivot list.

STMP,Stamps.com Inc beats expectations.

TONS,Novamerican Steel Inc up on no apparent news. There has been lot of merger related activity in steel sector, so this might be worth keeping an eye on. Float is just 3.19 million.

Double Trouble

The number of stocks up 50% plus in a month has steadily climbed to 15 within a short time span. Individual stocks is where the action is while the indexes churn. I have added all the things which I track on daily basis to the data block so that you can see how these things move over a period of time and how they can help you track the market to find profitable opportunities.

Market Monitor

Total 4% plus bullish breakouts=128
Total 4% plus bearish breakouts= 31
65 day bullish/bearish ratio= 904/214
Stocks up 50% or more in a month=15
Stocks up 25% or more in a month= 117
Number of stocks with 100% plus move = 373
Number of stocks up 200% or more = 86
4% plus signals for 100plus universe=30

Stocks which had 100% move in last 260 days from the low and which are up more than 4% on higher volume. Today's minimum volume is above 100000. To understand how to trade this see my earlier post "How to find a stock which makes 1500% move in a year".

ACOR,Acorda Therapeutics Inc (Google  Yahoo  Earnings  Chart) 
ACY,Aerocentury Corp (Google  Yahoo  Earnings  Chart) 
ANAD,Anadigics Inc (Google  Yahoo  Earnings  Chart) 
BDR,Blonder Tongue Labs (Google  Yahoo  Earnings  Chart) 
BSQR,bSquare Corp (Google  Yahoo  Earnings  Chart) 
CBLI,Cleveland BioLabs Inc (Google  Yahoo  Earnings  Chart) 
CRAY,Cray Incorporated (Google  Yahoo  Earnings  Chart) 
CROX,Crocs Inc (Google  Yahoo  Earnings  Chart) 
FRG,Fronteer Development Group Inc (Google  Yahoo  Earnings  Chart) 
FRPT,Force Protection Inc (Google  Yahoo  Earnings  Chart) 
GRA,W.R. Grace & Co (Google  Yahoo  Earnings  Chart) 
HURC,Hurco Companies Inc (Google  Yahoo  Earnings  Chart) 
IMMU,Immunomedics Inc (Google  Yahoo  Earnings  Chart) 
KRSL,Kreisler Manufacturing (Google  Yahoo  Earnings  Chart) 
LNUX,Va Software Corp (Google  Yahoo  Earnings  Chart) 
LTS,Ladenburg Thalmann Finl (Google  Yahoo  Earnings  Chart) 
MVIS,Microvision Inc (Google  Yahoo  Earnings  Chart) 
NEXM,Nexmed Inc (Google  Yahoo  Earnings  Chart) 
NRPH,New River Pharmaceuticals Inc (Google  Yahoo  Earnings  Chart) 
NYMX,Nymox Pharmaceutical Corp (Google  Yahoo  Earnings  Chart) 
OFI,Overhill Farms Inc (Google  Yahoo  Earnings  Chart) 
ONT,On2.Com Inc (Google  Yahoo  Earnings  Chart) 
ONXX,Onyx Pharmaceuticals Inc (Google  Yahoo  Earnings  Chart) 
RVBD,Riverbed Technologies Inc (Google  Yahoo  Earnings  Chart) 
SLP,Simulations Plus Inc (Google  Yahoo  Earnings  Chart) 
SRSL,Srs Labs Inc (Google  Yahoo  Earnings  Chart) 
URZ,Uranerz Energy Corp (Google  Yahoo  Earnings  Chart) 
VC,Visteon Corporation (Google  Yahoo  Earnings  Chart) 
WBD,Wimm Bill Dann Foods Ojsc (Google  Yahoo  Earnings  Chart) 

The search for profitable ideas

Recently a trader shared a day trading system based on event tracking, which had some success and in the course of our email exchange I said may be one needs to look at the market totally differently to build a suite of day trading automated system. Now this got me thinking. My primary focus has so far been on long term trading and so bulk of my understanding about market and research and efforts are focused on that.

To look at a day trading system is something unique and a creatively challenging process. So I decided to approach the problem on several level and will probably offer him a set of 5-8 ideas next week. It has been a very interesting exercises for me because it involved learning about an entirely different area of market and coming up with possible solutions.

To successfully trade the market and find enduring trading ideas requires creativity. Most of the trading systems which work are creative interpretation of market structures or creative workable interpretation of the market anomalies.

There are so many constrains when you are looking at high frequency short term automated system. The challenge is to find a solution which is enduring with a long term structural edge. The edge should withstand the markets ever changing cycles, plus it should exploit the available opportunity for the day to maximum possible extent. In the sense say if the possible opportunity for a given set of stock on a given day is say 1 million, one must extract the maximum possible out of it while managing risk.

Now in most peoples mind trading system development is mostly about data crunching or back testing. But much of the work is really concept development, the physical aspect of putting a system together if you have a profitable ideas is simple it involves entry, exit, and risk management.

I am approaching the problem differently and creatively. Lot of time we fail to find new ideas because we do not think creatively. Now I have some serious background in creative thinking because I spent over 6 years working in an intensely creative environment in the advertising business. In the advertising business your product is completely intangible. There is a constant pressure to come up with new ideas under strictly defined constrains. Plus most of good advertising ideas has to have enduring value to them. The automated day trading system is similar problem.

In my next post I will talk about the kind of crazy and whacky things I did to find possible solutions to this problem.

Why the name Double Trouble

An inquisitive reader has asked why the name "double Trouble " for the 100% plus concept. Most names have some meaning in them. In this case the meaning is clear a high probability to double or get in to trouble.Stocks in the list have probability to go up but if they don't , they quickly reverse.

You can use the same set of concept to look for short ideas. However most short systems will have significantly less profitability.

Down Stocks

Selected stocks down 10% or more or down 5 points or more. Primarily the list is for generating multiday long short ideas. Not every stock on this list qualifies, in fact very few qualify as long term buy and sell.

Sometimes a major one day move kicks off a multi month or multi year rally.Most of such significant moves are precipitated by a new information about the company in terms of earnings, new products, new management, new industry dynamics, new discovery, new regulation, new news from sector,new overall market trend, new earning cycle, new pricing power, new merger/takeover industry dynamics, etc. New information creates price shocks.The new information in some case is so significant that it fundamentally alters market participants view of the stock or sector.
BHI,Baker Hughes Inc Earnings disappointment

BIDU,Baidu.com Inc earnings/guidance. Already in Episodic Pivot file.

ESLR,Evergreen Solar Incearnings

GVA,Granite Construction Inc- Forecast sharply lower revenue in one of its units in 2007

LUFK,Lufkin Industries Inc- earnings

RNWK,Realnetworks Inc earnings/guidance

TELN,Telenor Asa earnings

TWLL,Techwell Inc earnings/guidance

Double Trouble

The market strength is getting reflected in the number of breakouts today. There were 30 stocks up 4%. Lot of fresh breakouts worth researching more. While the individual stock level action looks interesting, the overall 100% plus number is stock around 360. When market jumps out of range the number should jump on either side. When markets make really strong moves the number climbs dramatically.

Around April 2006 there were around 1300 stocks up 100% from the 260 day low. More than 300 stocks were up 200% plus. The number peaked at that level and by July 2007 there were only around 120 stocks up 100% on more and then the market reversed. Compared to other rallies, this 7-8 month rally has lacked the vigor and has been more dominated by sector rotations and small moves.

Stocks which had 100% move in last 260 days from the low and which are up more than 4% on higher volume. Today's minimum volume is above 100000. To understand how to trade this see my earlier post "How to find a stock which makes 1500% move in a year".

Total Number of stocks with 100% plus move = 361
Total number of stocks up 200% or more = 85
Total 4% plus signals for today=30

AKS,Ak Steel Holding Corp (Google  Yahoo  Earnings  Chart) 
AVCI,Avici Systems (Google  Yahoo  Earnings  Chart) 
CAPA,Captaris Inc (Google  Yahoo  Earnings  Chart) 
CLRT,Clarient Inc (Google  Yahoo  Earnings  Chart) 
CRAY,Cray Incorporated (Google  Yahoo  Earnings  Chart) 
CVNS,Covansys Corp (Google  Yahoo  Earnings  Chart) 
CYTR,Cytrx Corporation (Google  Yahoo  Earnings  Chart) 
FORG,Forgent Networks (Google  Yahoo  Earnings  Chart) 
GES,Guess? Incorporated (Google  Yahoo  Earnings  Chart) 
ICGN,Icagen (Google  Yahoo  Earnings  Chart) 
JADE,Lj Internat Inc (Google  Yahoo  Earnings  Chart) 
LTS,Ladenburg Thalmann Finl (Google  Yahoo  Earnings  Chart) 
MFW,M&F Worldwide Corp (Google  Yahoo  Earnings  Chart) 
MOVI,Movie Gallery Inc (Google  Yahoo  Earnings  Chart) 
NAVI,Navisite Incorporated (Google  Yahoo  Earnings  Chart) 
NEXC,Nexcen Brands Inc (Google  Yahoo  Earnings  Chart) 
PRGX,Prg-schultz Intl Inc (Google  Yahoo  Earnings  Chart) 
SHS,Sauer-Danfoss Inc (Google  Yahoo  Earnings  Chart) 
SOFO,Sonic Foundry Inc (Google  Yahoo  Earnings  Chart) 
SPAR,Spartan Motors Inc (Google  Yahoo  Earnings  Chart) 
TAG,Tag-It Pacific Inc (Google  Yahoo  Earnings  Chart) 
TALX,Talx Corporation (Google  Yahoo  Earnings  Chart) 
TTG,Tutogen Medical Inc (Google  Yahoo  Earnings  Chart) 
TVL,Lin Tv Corp (Google  Yahoo  Earnings  Chart) 
TWW,Terremark Worldwide Inc (Google  Yahoo  Earnings  Chart) 
URZ,Uranerz Energy Corp (Google  Yahoo  Earnings  Chart) 
VCLK,Valueclick Inc (Google  Yahoo  Earnings  Chart) 
VII,Vicon Industries Inc (Google  Yahoo  Earnings  Chart) 
XING,Qiao Xing Univ Telephone (Google  Yahoo  Earnings  Chart) 
XOMA,Xoma Ltd (Google  Yahoo  Earnings  Chart) 

Float and IBD's Top Supply/ Demand Companies

Every Thursday Investors Business Daily prints a IBDs Top Supply/ Demand Companies list in the B section.It has 10 stocks in it every week. It is essentially a comparison of trading volume to the stocks float. Now some of these stocks have been on this list for many weeks and have gone up many fold. If you regularly follow that list you will find many profitable ideas in it.

If you read the fine print, IBD says it is a gauge of institutional supply and demand. Higher rating on Supply/ Demand rating indicates heavy demand from mutual funds and institutional investors. It is one of the factor they have found to be essential in their model of stock market's biggest winners over the years.

The Supply/Demand Rating gauges investor demand in a stock by comparing its volume to its float. Stocks trading heavy volume with low floats tend to carry higher Supply/Demand ratings. Use the Supply Demand Rating within the context of other IBD Ratings as well as a stock's chart. A stock that has peaked and is heading lower could still maintain a high Supply/Demand Rating.

Now this rating is very similar to Norman Fosback's Volume Turover Ratio. Norman Fosbackin his classic book Stock Market Logic provides a Volume Turnover Ratio to select stocks in portfolio.
Volume Turover Ratio is calculated by dividing total trading volume in a stock over last six months by the total number of shares outstanding. The result is multiplied by 2 to convert it to yearly. Norman Fosback book offers number of detailed studies on effect of stocks floats and supply in general on stock returns.

In the First few editions of How to Make Money in Stocks William O'Neil specified stocks with less than 25 million float as ideal CANSLIM candidates. Subsequently the post dot com era editions have dropped that requirements.
"If you desire clear cut factual evidence, the 40 year study of the greatest stock market winners indicated more than 95% of the companies had fewer than 25 million shares in their capitalisation when they had their greatest period of earnings improvements and stock market performance. "
How to Make Money in Stocks

Dan Zanger the super trader who has consistently made triple digit returns for some years now has been focuses on importance of float consistently in all his writings or in interviews . If you study his method in detail his winning formula was small float and 100% plus EPS growth. Now that he is trading a significantly bigger account he is looking at larger float stocks. In his recent interviews he has indicated less than 100 million float as ideal.

Small float is not the Holy Gail in trading , large float stocks do make triple digit moves in a year if they have very good earnings but given a choice of many stocks with superior earnings or breakouts in a day selecting low float candidates can increase the probability of higher profits.

Up stocks and down stocks

Selected stocks up or down 10% or more or up or down 5 points or more. Primarily the list is for generating multiday long short ideas. Not every stock on this list qualifies, in fact very few qualify as long term buy and sell.

Sometimes a major one day move kicks off a multi month or multi year rally.Most of such significant moves are precipitated by a new information about the company in terms of earnings, new products, new management, new industry dynamics, new discovery, new regulation, new news from sector,new overall market trend, new earning cycle, new pricing power, new merger/takeover industry dynamics, etc. New information creates price shocks.The new information in some case is so significant that it fundamentally alters market participants view of the stock or sector.

Most stocks which make 100% plus moves in a year have such "episodic pivots" at the beginning of their major moves.Analysing "episodic pivots" can get you in to a stock with low risk at the beginning of a major move. Most stocks or sectors over their entire life span have very few "episodic pivots".


Down moves

CRI,Carter Holdings Inc Earnings/guidance

DAKT,Daktronics Inc Irregular earnings. This has happened once before couple of quarters ago. Last time it gapped down more than 10%, stabilised a bit and headed higher and gapped up on earnings but never followed through post that. From predictable earnings to irregular earnings makes this volatile stock.


FRD,Friedman Industries Inc- earnings break

GIFI,Gulf Island Fabrication Delayed earning release. Reason not yet very clear but if related to irregularities or regulatory trouble, then this might have more downside. When in doubt best action is to sell. File under episodic pivot. Regulatory trouble is generally extremely good short side catalyst.

REFR,Research Frontiers Inc- After a flurry of press releases and the stock going up 100% plus in few days, how can you pass on an opportunity for secondary offerings.

WTS,Watts Industries Inc A- earnings miss

Up move

BITS,Bitstream Inc follow through from yesterday's 100% plus breakout.

BSC,Bear Stearns Companies- analyst upgrade

BSM,BSD Medical Corp Follow through from new product news couple of weeks ago

CMI,Cummins Inc- up 6 dollars on no major news.

DCX,Daimlerchrysler Ag Job cuts and restructuring news.

DE,Deere & Co Earnings. Example of large float company making a big move on good earning. DE is up 63% from 260 days low so far on earnings strength. Earning is the most important thing which drives stocks even with high float higher. The number one factor in stock selection for short or long term rapid appreciation potential for most stocks is earnings growth or hint of future earning growth or earning acceleration.

DTG,Dollar Thrifty Auto Grp- merger related news.

ECMV,E Com Ventures Inc- Extremely small float of 1.8 million. It has trippled in less than six month post an earnings breakout in Sept. The kind of stocks I like to focus on most of the time.The "episodic pivot" in September was good buy point.

EIG,Employers Holdings Inc- new IPO

FSLR,First Solar Inc Earnings breakout

HTI,Halozyme Therapeutics Inc Expansion of agreement with Baxter. It has gone up a lot since its major breakout on deal with Roche. It has significant insider buying. Bought last time on breakout in December, got stopped out post 50% move on pullback. This is already in my "Episodic Pivot" list for fresh entry.

IVGN,Invitrogen Corporation- earnings

KRSL,Kreisler Manufacturing earnings plus extremely small float of 1.02 million.

MICC,Millicom Intl Cellular Sa Earnings breakout

MRTN,Marten Transport Ltd- analyst upgrade

SGXP,SGX Pharmaceuticals- up 25% on no apparent news

SNCR,Synchronoss Technologies Inc up 10% on follow through from recent investor conference.

SPSS,Spss Inc- earnings

TRT,Trio-Tech Internat- Another one of those low float (2.2 million) earnings play. Already in "Episodic Pivot" list. I had highlighted this stock in September on earnings breakout and it made 40% plus move in few days

Double Trouble

The market strength is getting reflected in the number of breakouts today. There were 31 stocks up 4%.

Stocks which had 100% move in last 260 days from the low and which are up more than 4% on higher volume. Today's minimum volume is above 100000. To understand how to trade this see my earlier post "How to find a stock which makes 1500% move in a year".

Total Number of stocks with 100% plus move = 367
Total number of stocks up 200% or more = 85
Total 4% plus signals for today=31
ANO,Anooraq Resources Corp (Google  Yahoo  Earnings  Chart) 
AOI,Alliance One International Inc (Google  Yahoo  Earnings  Chart) 
AUXL,Auxilium Pharmaceuticals Inc (Google  Yahoo  Earnings  Chart) 
AVCI,Avici Systems (Google  Yahoo  Earnings  Chart) 
BITS,Bitstream Inc (Google  Yahoo  Earnings  Chart) 
CBLI,Cleveland BioLabs Inc (Google  Yahoo  Earnings  Chart) 
CLG,Cumberland Resources Ltd (Google  Yahoo  Earnings  Chart) 
CPA,Copa Holdings S.A. (Google  Yahoo  Earnings  Chart) 
CUTR,Cutera Inc (Google  Yahoo  Earnings  Chart) 
CYTR,Cytrx Corporation (Google  Yahoo  Earnings  Chart) 
ECMV,E Com Ventures Inc (Google  Yahoo  Earnings  Chart) 
GPK,Graphic Packaging Intl (Google  Yahoo  Earnings  Chart) 
HTI,Halozyme Therapeutics Inc (Google  Yahoo  Earnings  Chart) 
ICAD,Icad Inc (Google  Yahoo  Earnings  Chart) 
IMMU,Immunomedics Inc (Google  Yahoo  Earnings  Chart) 
ION,Ion Media Networks Inc (Google  Yahoo  Earnings  Chart) 
LNUX,Va Software Corp (Google  Yahoo  Earnings  Chart) 
LOOK,Looksmart Ltd (Google  Yahoo  Earnings  Chart) 
MICC,Millicom Intl Cellular Sa (Google  Yahoo  Earnings  Chart) 
MNG,Miramar Mining Corp (Google  Yahoo  Earnings  Chart) 
MWP,Markwest Hydrocarbon Inc (Google  Yahoo  Earnings  Chart) 
NAVI,Navisite Incorporated (Google  Yahoo  Earnings  Chart) 
PRFT,Perficient Inc (Google  Yahoo  Earnings  Chart) 
PRW,Pro-pharmaceuticals Inc (Google  Yahoo  Earnings  Chart) 
SGXP,SGX Pharmaceuticals (Google  Yahoo  Earnings  Chart) 
SNCR,Synchronoss Technologies Inc (Google  Yahoo  Earnings  Chart) 
SYNT,Syntel Inc (Google  Yahoo  Earnings  Chart) 
TELN,Telenor Asa (Google  Yahoo  Earnings  Chart) 
TRT,Trio-Tech Internat (Google  Yahoo  Earnings  Chart) 
TSL,Trina Solar Ltd. (Google  Yahoo  Earnings  Chart) 
TTWO,Take-Two Intera Software (Google  Yahoo  Earnings  Chart) 

Stock float

Why I look at float for every stock

For the new traders confused by the float discussion this post might answer some questions.

Float is the number of shares actually available for trading in the open market. To understand float you need to understand authorised shares, treasury shares, outstanding shares and restricted shares.

Authorized shares are total number of shares authorized by shareholders. Companies do not issue all authorized shares and retain some in treasury. Which are called treasury shares. The issued shares constitutes outstanding shares. The shares issued to insiders, favored parties, employees are typical the restricted shares, which have certain restriction in terms of ownership and when and how they can be sold. Float is the number of shares after restricted shares are removed from the outstanding shares.

e.g
Let up take a hypothetical company Trader Mike Inc. which derives its income from trading, advertising, sponsorships and strategic investments in start ups.
Authorized shares= 25 million
Treasury shares= 5 million
Outstanding shares= 20 million
Restricted shares= 10 million
Float= 10 million

Why is float important, because it impacts supply and demand. As a general rule low float companies are more volatile and make extreme moves in either direction on good or bad news.

If you want to gun for high returns, looking at low float companies with excellent earnings is one way. As more institutional players want to own them, a small float makes them difficult to accumulate. This is what leads to them making significant moves. e.g. GROW which was one of the best performer stock last year has a float of only 6 million. That also after a 2:1 split in beginning of year.AXR another stock which made 500% plus move last year has a float of 1.8 million. MWRK which was another 400% plus mover had 5.6 million float.

Similarly if you study stocks which have made major moves, you will typically find stocks with low float dominating the list. Now there was an aberration during the dot com boom where new IPO's came out with higher floats and sometime went up many fold, but as we all know that was irrational exuberance.

Lets look at some recent data from my trading universe and scans:
Out of 80 Stocks up 200% plus from low in 260 days there is only 1 stock which has 100 million plus float, CHTR, Charter Communications Inc.
Out of 338 stocks up 100% plus in 260 days from low there are only 16 stocks with 100 million plus float.
Out of 81 stocks up 25% plus in a month there are only 3 stocks with 100 million plus float.
Only 73 stocks out of 862 stocks up 25% or more in this quarter has 100 million plus float.
Now I have this data for number of years and has studied it in great details. My findings are no different from anyone else who has studied the data, in most periods low float stocks significantly outperform high float stocks if they have a catalyst like earnings. Now that is another advantage for average speculators against the big speculators who by virtue of their size cannot focus on low float stocks.

Obviously if you are very short term trader all that matters to you is liquidity and range. So for day traders stocks with high float and large range like GOOG are very good and you can make lots of money just trading day in and day out that one stock. But as a general rule if you are long or intermediate term trader and if you want to improve your returns significantly , pay close attention to float.

Up stocks and down stocks

Got stuck in snow storm early morning so today's update is late and abbreviated.
Selected stocks up or down 10% or more or up or down 5 points or more. Primarily the list is for generating multiday long short ideas. Not every stock on this list qualifies, in fact very few qualify as long term buy and sell.

Down Stocks

EFD,Efunds Corporation- MasterCard cancels contract.

HANS,Hansen Natural Corp- broker downgrade

ININ,Interactive Intelligence- Earnings/guidance

IRBT,iRobot Corp- earnings/ guidance

KNOT,The Knot Inc- earnings/guidance. This one might have lot more downside ahead post a bounce. File under episodic pivots.

LQDT,Liquidity Services- secondary offering

NDAQ,Nasdaq Stock Market Inc- earnings/ guidance

OSIR,Osiris Therapeutics Inc- drug trial miss

RADN,Radyne Comstream-earnings/guidance

RGF,R & G Financial Corp Cl B- delisting by NYSE

Up stocks

APPB,Applebee's International- exploring strategic options
BWTR,Basin Water Inc- no news

CYNO,Cynosure Inc- earnings

DFZ,R.G. Barry Corp- earnings. This was typical low float good earnings play yesterday morning.File under episodic pivots.

FADV,First Advantage Corp Cl A- earnings/guidance

FALC,Falconstor Software Inc- earnings/guidance.

HIMX,Himax Technologies Inc- earnings/guidance

MAMA,Mamma.com Inc- extension of deal with Yahoo. Float

PCLN,Priceline.com Inc- earnings/guidance

PCTI,Pc-Tel Incorporated- New product introduction during 2007 3GSM World Congress in Barcelona. You will find many pops like this when major industry conferences or investors conferences are held.

RICK,Rick's Caberet Intl- guidance. This was earnings breakout few weeks ago and moved up since earnings

VSNT,Versant Corporation- We know the reason for this.

Double Trouble

Stocks which had 100% move in last 260 days from the low and which are up more than 4% on higher volume. Today's minimum volume is above 100000. To understand how to trade this see my earlier post "How to find a stock which makes 1500% move in a year".

Total Number of stocks with 100% plus move = 338
Total number of stocks up 200% or more = 80
Total 4% plus signals for today=14

ADST,Adstar Inc (Google  Yahoo  Earnings  Chart) 
ANAD,Anadigics Inc (Google  Yahoo  Earnings  Chart) 
BAP,Credicorp Ltd (Google  Yahoo  Earnings  Chart) 
BITS,Bitstream Inc (Google  Yahoo  Earnings  Chart) 
ECGI,Envoy Communications Grp (Google  Yahoo  Earnings  Chart) 
FRG,Fronteer Development Group Inc (Google  Yahoo  Earnings  Chart) 
HURN,Huron Consulting Group Inc (Google  Yahoo  Earnings  Chart) 
IMMU,Immunomedics Inc (Google  Yahoo  Earnings  Chart) 
OSTE,Osteotech Inc (Google  Yahoo  Earnings  Chart) 
PCLN,Priceline.com Inc (Google  Yahoo  Earnings  Chart) 
RICK,Rick's Caberet Intl (Google  Yahoo  Earnings  Chart) 
SGEN,Seattle Genetic (Google  Yahoo  Earnings  Chart) 
SQNM,Sequenom Inc (Google  Yahoo  Earnings  Chart) 
VSNT,Versant Corporation (Google  Yahoo  Earnings  Chart) 

Up stocks and down stocks

Selected stocks up or down 10% or more or up or down 5 points or more. Primarily the list is for generating multiday long short ideas. Not every stock on this list qualifies, in fact very few qualify as long term buy and sell.

Sometimes a major one day move kicks off a multi month or multi year rally.Most of such significant moves are precipitated by a new information about the company in terms of earnings, new products, new management, new industry dynamics, new discovery, new regulation, new news from sector,new overall market trend, new earning cycle, new pricing power, new merger/takeover industry dynamics, etc. New information creates price shocks.The new information in some case is so significant that it fundamentally alters market participants view of the stock or sector.

Most stocks which make 100% plus moves in a year have such "episodic pivots" at the beginning of their major moves.Analysing "episodic pivots" can get you in to a stock with low risk at the beginning of a major move. Most stocks or sectors over their entire life span have very few "episodic pivots".

Now that is something to think about!!!! I will say no more on this :-)

Up stocks
APOG,Apogee Enterprises Inc (Google  Yahoo  Earnings  Chart) 
ASFI,Asta Funding Inc (Google  Yahoo  Earnings  Chart) 
BW,Brush Engineered (Google  Yahoo  Earnings  Chart) 
CYTX,Cytori Therapeutics Inc (Google  Yahoo  Earnings  Chart) 
DMGI,Digital Music Group (Google  Yahoo  Earnings  Chart) 
LCAV,Lca-vision New (Google  Yahoo  Earnings  Chart) 
MED,Medifast Inc (Google  Yahoo  Earnings  Chart) 
MMA,Municipal Mtg & Equity (Google  Yahoo  Earnings  Chart) 
MSON,Misonix Inc (Google  Yahoo  Earnings  Chart) 
ONXX,Onyx Pharmaceuticals Inc (Google  Yahoo  Earnings  Chart) 
VSNT,Versant Corporation (Google  Yahoo  Earnings  Chart) 
ZOLT,Zoltek Companies Inc (Google  Yahoo  Earnings  Chart) 


APOG,Apogee Enterprises Inc up more than 10% on news that raised its fiscal 2007 earnings forecast Monday.

ASFI,Asta Funding Inc up more than 10% on earnings release. Debt collector Asta Funding Inc. said Friday its fiscal first-quarter profit rose 22 percent on a jump in revenue.

BW,Brush Engineered Was up 33% on earning release and good forward guidance. Brush Engineered Materials Inc., which supplies beryllium metal to the medical and electronics industries, issued an outlook for full-year 2007 profit above Wall Street's expectations.

CYTX,Cytori Therapeutics Inc is currently loss making company which was up on news of intention to commercialize its Celution(TM) System in Europe in early 2008 for use in reconstructive surgery in breast cancer patients following a partial mastectomy (lumpectomy), in advance of the original anticipated timeline.


DMGI,Digital Music Group was up 34 on news of revenue-sharing content deal with YouTube.

LCAV,Lca-vision New was up more than 7 dollars on earnings and guided 2007 earnings above Wall Street estimates.

MED,Medifast Inc was up 19% on sharply higher revenue forecast for full-year 2006.

MMA,Municipal Mtg & Equity stocks rebounded on news that it does not engage in subprime or any other single family mortgage lending activities.

MSON,Misonix Inc was up 12 post earnings.

ONXX,Onyx Pharmaceuticals Incup sharply on the news that Nexavar trial met its primary endpoint

VSNT,Versant Corporation was up 14% on no news.

ZOLT,Zoltek Companies Inc was up 10% on earning release.

Down Stocks
ASF,Administaff Inc (Google  Yahoo  Earnings  Chart) 
CHDX,Chindex International Inc (Google  Yahoo  Earnings  Chart) 
CTRP,Ctrip.com International (Google  Yahoo  Earnings  Chart) 
DO,Diamond Offshre Drilling (Google  Yahoo  Earnings  Chart) 
GSOL,Global Sources Ltd. (Google  Yahoo  Earnings  Chart) 
ICE,Intercontinental Exchange Inc (Google  Yahoo  Earnings  Chart) 
TWLL,Techwell Inc (Google  Yahoo  Earnings  Chart) 


ASF,Administaff Inc down more than 9 dollar after cutting its growth forecast.

CHDX,Chindex International Inc a China health care provider dropped 8% post earnings.

CTRP,Ctrip.com International the Chinese online travel company was down more than 7 dollars after it reported higher fourth-quarter profit, but warned that operating margins may decline in 2007.

DO,Diamond Offshre Drilling move related to special dividend of $4/share.

GSOL,Global Sources Ltd. the Chinese solar panel company down 3% in sympathy with general drop in Chinese stocks

ICE,Intercontinental Exchange Inc was down more than 5 dollars along with other exchange stocks. ICE has been up 212% from its 260 day low and recently had good earnings.

TWLL,Techwell Inc declined 10% in sympathy with other chip plays.

Is this a garden variety pullback

Like many previous sell offs, this one fizzled out on second day. Even though there was no immediate bounce, there was also no major pressure on the downside. There were 106 stocks down 4% or more on high volume. But there were 87 stocks up. In serious corrections the number of down movers is in range of 250 plus for first 2-3 days of selling. So market might attempt a bounce back in next couple of days.

Your views about the market are largely formed by your trading time frame , your structural understanding of market , and the kind of things which you monitor on day to day basis. The technical analysts view is largely formed on their structural paradigm of support and resistance. In the Investor Business Daily CANSLIM approach, the market direction is determined by number of accumulation or distribution days in last defined period.

My view of the market is determined by my understanding of momentum stocks, earnings, the number of signals generated on various scans, and number of profitable trades in a defined period. Prior to the correction in last 6 weeks I had disproportionally more number of profitable trades. Which itself indicates at some stage there is going to be exhaustion of the move for at least some period. Momentum is cyclical.

Stocks which are beneficiaries of momentum are also victims of it once the mood shifts. Momentum cuts both ways and once it turns the downside can pick up steam quite quickly. Playing momentum requires a thorough understanding of the different phases in momentum. If you don't exit a momentum stock quickly at first sign of danger after making a significant move, you soon discover that the downside momentum in such stocks feeds on itself. I see lot of people trying to buy pullbacks or corrections in momentum names, probability of those moves working is low. Once a momentum stock finish its momentum phase, the stock may bounce but is primed to trade lower from there.

Some sector moves for variety of reason are over and they will continue to be in correction mode till a fresh catalyst can drive those sector higher. Casinos, technology,alternative energy some China and India play are in all such phase.The energy sector is a good example of how when the momentum party gets over, it is very difficult to get it going again. The energy stocks have struggled and have been unable to put together any decent size rally in spite of so many misguided bulls on energy, ethanol and alternative energy.

At least for me, I know from personal experience that high returns are possible by avoiding the correction or pullback phases. The kind of stocks which I buy have higher beta, so when market is in ideal momentum phase they do significantly better, same thing applies on downside. It is not very difficult for me to put capital back to work if I see market again moving in to profitable momentum phase. I have well oiled machinery which churns out opportunities on daily basis. The conveyor belts infrastructure still keeps humming. The scans and methods still remain valid, so getting back in to market is no big deal. Earnings still continues to drive stock behaviour and there are everyday earnings based breakouts. The earnings season is still going on.

Flexibility is tremendous advantage for small speculators. Institutional Investors have a structural disadvantage due to their large size. They manage gigantic sums of money, and as a result, cannot move quickly in and out of their positions. That is the reason for the constant mind altering advise and marketing from the mutual funds to not time the market. So the mental modeling script is to drum in to investors head that you must sit tight and ride things out, do not time the markets.It is smart marketing from their perspective. You can listen to that message or raise cash and move to the sidelines at a moment’s notice and wait for the next opportunity.

Double Trouble

Stocks which had 100% move in last 260 days from the low and which are up more than 4% on higher volume. Today's minimum volume is above 100000. To understand how to trade this see my earlier post "How to find a stock which makes 1500% move in a year".
Only fresh signals are valid. Fresh signal is a stock which today has 4% signal but no 4% signal in last 5 days.

Total Number of stocks with 100% plus move = 348
Total number of stocks up 200% or more = 84
Total 4% plus signals for today=24

Breakouts with no break in last 20 days
MSI,Movie Star Inc (Google  Yahoo  Earnings  Chart) 
TVL,Lin Tv Corp (Google  Yahoo  Earnings  Chart) 
VSNT,Versant Corporation (Google  Yahoo  Earnings  Chart) 
WITS,Witness Systems Inc (Google  Yahoo  Earnings  Chart) 
ZOLT,Zoltek Companies Inc (Google  Yahoo  Earnings  Chart) 


Other Breakouts
ACOR,Acorda Therapeutics Inc (Google  Yahoo  Earnings  Chart) 
ACY,Aerocentury Corp (Google  Yahoo  Earnings  Chart) 
ATA,Apogee Tech Inc (Google  Yahoo  Earnings  Chart) 
BGC,General Cable Corp (Google  Yahoo  Earnings  Chart) 
BRLC,Syntax-Brillian Corp (Google  Yahoo  Earnings  Chart) 
BW,Brush Engineered (Google  Yahoo  Earnings  Chart) 
CALM,Cal-Maine Foods Inc (Google  Yahoo  Earnings  Chart) 
DAKT,Daktronics Inc (Google  Yahoo  Earnings  Chart) 
NVL,Novelis Inc (Google  Yahoo  Earnings  Chart) 
NXST,Nexstar Broadcasting Group (Google  Yahoo  Earnings  Chart) 
ONXX,Onyx Pharmaceuticals Inc (Google  Yahoo  Earnings  Chart) 
RICK,Rick's Caberet Intl (Google  Yahoo  Earnings  Chart) 
SIGA,Siga Pharmaceuticals Inc (Google  Yahoo  Earnings  Chart) 
SYX,Systemax Inc (Google  Yahoo  Earnings  Chart) 
TRMM,Trm Corporation (Google  Yahoo  Earnings  Chart) 
TSL,Trina Solar Ltd. (Google  Yahoo  Earnings  Chart) 
UCTT,Ultra Clean Holdings (Google  Yahoo  Earnings  Chart) 
URZ,Uranerz Energy Corp (Google  Yahoo  Earnings  Chart) 
VII,Vicon Industries Inc (Google  Yahoo  Earnings  Chart) 

Down Stocks

Stocks down 10% or more or down 5 dollars or more.
ACHN,Achillion Pharm Inc (Google  Yahoo  Earnings  Chart) 
CTS,Cts Corp (Google  Yahoo  Earnings  Chart) 
ELY,Callaway Golf Co (Google  Yahoo  Earnings  Chart) 
ENER,Energy Conversn Devices (Google  Yahoo  Earnings  Chart) 
ENPT,En Pointe Technologies (Google  Yahoo  Earnings  Chart) 
GOOG,Google (Google  Yahoo  Earnings  Chart) 
LVS,Las Vegas Sands (Google  Yahoo  Earnings  Chart) 
MA,MasterCard Inc (Google  Yahoo  Earnings  Chart) 
MNTA,Momenta Pharma (Google  Yahoo  Earnings  Chart) 
NFI,Novastar Financial Inc (Google  Yahoo  Earnings  Chart) 
NYX,NYSE Group Inc (Google  Yahoo  Earnings  Chart) 
OMTR,Omniture Inc (Google  Yahoo  Earnings  Chart) 
SIMG,Silicon Image Inc (Google  Yahoo  Earnings  Chart) 
SPC,Spectrum Brands Inc (Google  Yahoo  Earnings  Chart) 
WYNN,Wynn Resorts Ltd (Google  Yahoo  Earnings  Chart) 


ACHN,Achillion Pharm Inc, was down more than 50% on the news that the company and its partner Gilead Sciences Inc. decided to abandon their hepatitis C drug.

CTS,Cts Corp, was down more than 10% on the news that it lowered its 2006 adjusted earnings forecast on lower margins at one business and due the effect of incorrect accounting entries.

ELY,Callaway Golf Co, was down more than 10% after its earning release and a downgrade by A.G. Edwards analyst

ENER,Energy Conversion Devices, the rechargeable battery maker said second-quarter results missed Street estimates and will not be profitable by the end of fiscal 2007, stock stubled more than 10% on news.

ENPT,En Pointe Technologies,En Pointe Technologies, Inc. provides the information technology marketplace, including mid-market and enterprise accounts, government agencies, and educational institutions nationwide, with computer hardware, software, information security, and managed and professional services. Stock was down more than 10% on no news.

GOOG,Google Google has been struggling since its earnings release and on Friday continued its slide down with 9 dollar down move.

LVS,Las Vegas Sands, Las Vegas Sands the China gambling play has reversed since its latest earnings, which indicated the company acknowledged that much of the fourth-quarter benefit came from the table games for high rollers at The Venetian hotel-casino in Las Vegas.

MA,MasterCard Inc was down more than 11 dollar after its fourth-quarter profit topped Wall Street expectations, but it warned that margin growth may slow this year.

MNTA,Momenta Pharma the generic drug maker reversed direction Friday after surging in premarket trading on news that Sanofi-Aventis lost a patent case over its top selling blood-thinning drug Lovenox.

NFI,Novastar Financial Inc the sub prime lender stumbled and dropped to a new 52-week low as the problems in subprime mortgage lending got front page treatment.

NYX,NYSE Group Inc, has struggled since its earning and the stock was down 5 dollars after Goldman Sachs analyst Joshua R. Carter removed NYSE Group Inc., operator of the New York Stock Exchange, from his "Americas Buy List" on Friday on concerns related to its hybrid system, sending shares down in afternoon trading.


OMTR,Omniture Inc, a provider of online business software, fell more than 3 dollar on Friday's trading after the company posted a fourth-quarter loss on Thursday, and warned that full-year and first-quarter earnings could fall short of analysts' expectations.

SIMG,Silicon Image Inc shares dropped 24% in Friday trading after the chip maker posted a twofold increase in fourth-quarter income but forecast first-quarter sales below Wall Street estimates.

SPC,Spectrum Brands Inc, has struggled since earnings announcement and slid more than 10% second day Friday amid an analyst downgrade and a credit rating cut due to the battery and personal product maker's disappointing fiscal first-quarter performance.

WYNN,Wynn Resorts Ltd recorded the largest percentage loss on the Nasdaq 100 Friday.The stock slipped $7.10, or 6 percent, to end at $104.19.

Momentum Stocks Suffer

Friday was a bad day for momentum stocks. 114 stocks in my stock universe were down 4% or more on higher volume. First time after a long time this number exceeded number of stocks up.
The heavy selling started in the morning and the dip buyers never showed up. The selling pressure sent major indices and momentum favorites stocks down sharply. Momentum stocks and leading stocks like GOOG, NYX, LVS, WYNN, MA, OMTR, etc. suffered and had high volume reversals.
So far the rally from the July low has been characterised by 3-4 such sharp sell offs which failed to follow through on downside. So it might be too early to press down side bets. But this sell off is coming at the end of the earning season and their is likely to be high probability of it following through.
For momentum based strategies and other strategies which I personally use, I generally avoid 3-6 days after such sell offs to initiate major new positions. Stocks which breakout during such period often do not immediately follow through and offer better low risk entries later. Such interface where bullish move correct,from my past experience have proven to lead to me giving up large % of previously built profits. So I avoid and try and anticipate such zones.
Once the down move becomes clear the sectors to avoid and stocks to avoid becomes clear. In few days the other sectors and stocks which are not part of the down move start breaking out and those are the kind of opportunities which show up on my system after few days.
If you are looking for a Telechart 2007 scan to find short candidates try this:
( 100 * (C - C1) / C1) <= ( - 4) AND V >= 1000 AND V > V1
It will give you 114 candidates. As a general rule while looking at short candidates I avoid low float stocks and stocks with high dividend. Sometime later I will have more on how I built a short strategy using the "Significant Moves" concept.

Interest rates are headed higher

Money is cheap. And some experts say it could stay that way for years. That's creating opportunity—and brand new risks

Higher interest rates may not be good for the markets.When everyone gets it and all sorts of explanations are offered for why interest rates are low and they will remain low, the probability of them going high is very high. The magazine cover indicator at work.

Double Trouble

Stocks which had 100% move in last 260 days from the low and which are up more than 4% on higher volume. Today's minimum volume is above 100000. To understand how to trade this see my earlier post "How to find a stock which makes 1500% move in a year".
Only fresh signals are valid. Fresh signal is a stock which today has 4% signal but no 4% signal in last 5 days.

Total Number of stocks with 100% plus move = 354
Total number of stocks up 200% or more = 87
Total 4% plus signals for today=14
Number of fresh signals (stocks with no signal in past 5 days)=11

Breakouts with no break in last 20 days
APLX,Applix Inc (Google Yahoo Earnings Chart)
BCSI,Blue Coat Systems Inc (Google Yahoo Earnings Chart)
MEMY,Memory Pharmaceuticals (Google Yahoo Earnings Chart)
THLD,Threshold Pharmaceuticals (Google Yahoo Earnings Chart)
TRT,Trio-Tech Internat (Google Yahoo Earnings Chart)
TTG,Tutogen Medical Inc (Google Yahoo Earnings Chart)
VC,Visteon Corporation (Google Yahoo Earnings Chart)


Other Breakouts
BMTI,BioMimetic Therapeutics Inc (Google Yahoo Earnings Chart)
GOAM,Goamerica Inc (Google Yahoo Earnings Chart)
LQDT,Liquidity Services (Google Yahoo Earnings Chart)
PTT,Vcg Holding Copr (Google Yahoo Earnings Chart)
REFR,Research Frontiers Inc (Google Yahoo Earnings Chart)
TRA,Terra Industries Inc (Google Yahoo Earnings Chart)
TTWO,Take-Two Intera Software (Google Yahoo Earnings Chart)

Corrections are sudden and vicious

So as anticipated correction is finally here. All moves at some stage correct. The trick is to capitalise as much as possible from the move higher and then anticipate correction zone and be vigilant and act quickly. As I said in the morning corrections are sudden and vicious especially after a long up move.
Nothing matters to market as long as they are rallying. When traders get comfortable making 4-5 dollar profit on day move and dips get repeatedly bought, a false sense of confidence can develop. The kind of vicious move developing today must have caught some rookies by surprise.
The interface where markets turn from bullish mode to correction mode are the most dangerous. There is no fun in building up your account 50% plus in a bull move and then giving up 20 to 30% of it in few days. That is one of the reason I pay close attention to the 65 day bull /bear indicator.

Less followed stocks make 100% plus moves

Widely followed stocks seldom make dramatic moves. Most of the time the widely held stocks are large companies. They might be market leaders in their respective markets but most of the time in stock market returns term they are laggards. Their best returns were when they were young growth companies.

Sometimes some of the widely followed stocks land in to major trouble and then they get driven down in price substantially and when they recover from those levels they make it to the 100% plus list.

Out of the 368 stocks in the 100% plus list only 7 are member of S&P 500, Nasdaq100 and Dow30.
AKAM,Akamai Technologies Inc (Google  Yahoo  Earnings  Chart) 
ATI,Allegheny Technologies (Google  Yahoo  Earnings  Chart) 
BIG,Big Lots Inc (Google  Yahoo  Earnings  Chart) 
GT,Goodyear Tire&Rubber Co (Google  Yahoo  Earnings  Chart) 
MICC,Millicom Intl Cellular Sa (Google  Yahoo  Earnings  Chart) 
NAV,Navistar Internat Corp (Google  Yahoo  Earnings  Chart) 
RIMM,Research In Motion Ltd (Google  Yahoo  Earnings  Chart) 

So if you want to under perform the market you know where to look.

Reducing the 'Double Trouble' universe

There were 19 breakouts yesterday in the 'Double Trouble' universe. Now once I posted the list I got couple of emails asking me can you suggest 2-3 out of it. A variation of the same emails I get everyday since I started posting the list couple of days ago.
As I have said in the beginning, to illustrate the point of simple systematic approach I deliberately simplified many things in the original "How to find a stock which makes 1500% move in a year". post. You have to use your own method of reducing the signals to few manageable signals. In doing so you must again use a criteria which picks the one with high probability. You can use number of criteria to reduce the list like recent quarter earning growth, or recent analyst earnings estimate raise, or insider buying, or any other fundamental anomalies, or use simple price and time based rules.
Here is a simple way to reduce the universe from 19 to 5. Take only stocks which did not have a breakout in last 20 days.

ABPI,Accentia BioPharmaceuticals Inc (Google  Yahoo  Earnings  Chart) 
BGC,General Cable Corp (Google  Yahoo  Earnings  Chart) 
GNLB,Genelabs Technologies (Google  Yahoo  Earnings  Chart) 
TTEC,Teletech Holdings Inc (Google  Yahoo  Earnings  Chart) 
USEY,U.S. Energy Systems Inc (Google  Yahoo  Earnings  Chart) 

If you understand the concept you can change many parameters in it like the 260 days or the threshold of 100% plus to get better or worse results.

Correction is likely to be sudden and vicious

A persistent rally has taken hold and for several days now there are 100 plus breakouts in my scan universe. The 65 day bullish.bearish ratio is hovering in the high correction probability zone for few days now. The 50% plus in a month indicator has deteriorated and has only 7 stocks as of today.
The strength is market and on individual stocks has been relentless. However few stocks are making blowout 50% plus move in a month. Last time when the market topped the 50% plus indicator had dramatic expansion and the number of stocks hit 25 plus level and then collapsed.
So any correction here will be sudden and vicious. The biggest risk for most traders who have capitalised from the rally is to protect profits. So duel priorities need to be balanced. There are fresh opportunities a galore at the same time in last 5 weeks of this year alone the returns are extremely good. A vicious and sudden correction can knock out lot of that profitability.

Double Trouble

Stocks which had 100% move in last 260 days from the low and which are up more than 4% on higher volume. Today's minimum volume is above 100000. To understand how to trade this see my earlier post "How to find a stock which makes 1500% move in a year".
Only fresh signals are valid. Fresh signal is a stock which today has 4% signal but no 4% signal in last 5 days.

Total Number of stocks with 100% plus move = 368
Total number of stocks up 200% or more = 85
Total 4% plus signals for today=23
Number of fresh signals (stocks with no signal in past 5 days)=16
ABPI,Accentia BioPharmaceuticals Inc (Google  Yahoo  Earnings  Chart) 
ACOR,Acorda Therapeutics Inc (Google  Yahoo  Earnings  Chart) 
AOI,Alliance One International Inc (Google  Yahoo  Earnings  Chart) 
BGC,General Cable Corp (Google  Yahoo  Earnings  Chart) 
BONT,Bon-Ton Stores Inc (Google  Yahoo  Earnings  Chart) 
CLEC,Us Lec Corp Cl A (Google  Yahoo  Earnings  Chart) 
CYTR,Cytrx Corporation (Google  Yahoo  Earnings  Chart) 
EGHT,8x8 Inc (Google  Yahoo  Earnings  Chart) 
GEO,Geo Group (The) (Google  Yahoo  Earnings  Chart) 
GNLB,Genelabs Technologies (Google  Yahoo  Earnings  Chart) 
HMIN,Home Inns and Hotels Management (Google  Yahoo  Earnings  Chart) 
ICAD,Icad Inc (Google  Yahoo  Earnings  Chart) 
ICGN,Icagen (Google  Yahoo  Earnings  Chart) 
IMKTA,Ingles Markets Inc Cl A (Google  Yahoo  Earnings  Chart) 
JADE,Lj Internat Inc (Google  Yahoo  Earnings  Chart) 
LDSH,Ladish Co Inc (Google  Yahoo  Earnings  Chart) 
LQDT,Liquidity Services (Google  Yahoo  Earnings  Chart) 
TSTC,Telestone Technologies Corp (Google  Yahoo  Earnings  Chart) 
TTEC,Teletech Holdings Inc (Google  Yahoo  Earnings  Chart) 
USEY,U.S. Energy Systems Inc (Google  Yahoo  Earnings  Chart) 
XIDE,Exide Tech (Google  Yahoo  Earnings  Chart) 
ZICA,Zi Corp (Google  Yahoo  Earnings  Chart) 
ZIXI,Zix Corporation (Google  Yahoo  Earnings  Chart) 


CLEC, US Lec Corp. is up 464% from its low in 260 days. Along the way it offered 2-3 good entries resulting in very good returns.

XIDE, Exide Tech. is a stock which I own from this scan. I bought it at 4.35 in few weeks it has doubled. Primarily buying breakout after a few days of weakness or breakout after 20 or more days previous breakout gives better results.

Vehicle Selection is the key

There are ten important things if you want to increase your profits dramatically.
Equity selection
Equity selection
Equity selection
Equity selection
Equity selection
Equity selection
Equity selection
Equity selection
Equity selection
Equity selection

If you chose a Bugatti Veyron as your vehicle as against say a Ford Mustang in a race, no matter how bad a driver you are your probability of winning race is high.

The Veyron's numbers are staggering. It can hit 60mph in 2.5 seconds
thanks to four-wheel-drive traction, shoots to 125mph in 7.3 seconds
and reaches 200mph in less than 20. The Veyron 16.4 is the most
powerful, most expensive, and fastest street-legal production car in
the world , with a proven top speed of over 400 km/h.There can be no
commercial logic behind such a crazy machine, even with the Veyron's
price tag of one million euros (at the current exchange rate, that's
$1.2 million).

The basic concept behind most of the stuff I am talking about be it IBD200 or Double trouble or Episodic Pivot or Virgins is Vehicle Selection. In a market where you have choice of 8000 plus stock vehicles, your vehicle selection determines your returns.

All the system I talk about have one central idea behind them, find stock with high probability of going up. 95% of the effort is in finding stock likely to go up a lot. The IBD 200 uses earnings and relative strength plus some other fundamentals to narrow the universe to 200 high probability vehicles. The 'Double Trouble' uses absolute price growth to identify vehicles likely to go up. All the other 22 systems basically are variations of vehicle selection theme.

If you chose a company with high probability of going up no matter what your entry criteria, your chance of success will be high. Rest all is tactics.

So what is your vehicle selection strategy?

The bears are never wrong

CXO Advisory Group has the best take on what is a bear's perspective on a bull market. The cartoon accompanying the post is even better.

When the market trend challenges their beliefs, what do we hear from market "experts"?

I am not wrong; most people are just too stupid to understand what's going on.

My arguments are really good. It's only a matter of time until I'm right. (I am not wrong, just early.)

I never guaranteed that what I predicted would happen. I just said it probably would based on history.

If the Plunge Protection Team (or hedge funds or big brokers) hadn't manipulated the market, I would have been right.

I may be wrong on a lot of little things, but I'm right on the big ones.

I was wrong (thank goodness), but following my advice didn't cost that much. If I'd been right, and you didn't follow my advice, you'd be wiped out.

What I said in public may have looked wrong, but what I privately told clients was dead-on.

How could I be wrong if I'm so rich and famous?

How to beat the market for $1.25 per week

Today is Thursday. Time to revisit the "How to beat the market for $1.25 per week" strategy. Those following that list must be enjoying their profits. In last few weeks if you had followed the IBD 200 strategy as outlined your returns should have been very good. If you had taken every signal and followed every rule and got stopped out (ideal situation and assumes no capital constrains, no use of leverage), your return would have been many times the market returns.

Stock selection is the key idea behind IBD200. If you select stocks with high probability of going up and use simple entry and exit rules you can make lots of money.It is my second most profitable strategy after the earnings lead breakout strategy. If you are willing to put in the time and effort to make this strategy work, the profit is just an outcome. If you trade a bunch of high probability systems, you never run out of ideas.

Stocks from IBD 200 list up 30% or more in few weeks:
AOB,American Oriental Bioengineering Inc (Google  Yahoo  Earnings  Chart) 
ATRS,Altiris Inc (Google  Yahoo  Earnings  Chart) 
AXR,Amrep Corp (Google  Yahoo  Earnings  Chart) 
CHINA,CDC Corp Class A (Google  Yahoo  Earnings  Chart) 
CNS,Cohen & Steers Inc (Google  Yahoo  Earnings  Chart) 
GLDN,Golden Telecom Inc (Google  Yahoo  Earnings  Chart) 
HMIN,Home Inns and Hotels Management (Google  Yahoo  Earnings  Chart) 
HRT,Arrhythmia Research Tech (Google  Yahoo  Earnings  Chart) 
HXM,Homex Development Corp (Google  Yahoo  Earnings  Chart) 
ICE,Intercontinental Exchange Inc (Google  Yahoo  Earnings  Chart) 
IGLD,Internet Gold-Golden (Google  Yahoo  Earnings  Chart) 
IMKTA,Ingles Markets Inc Cl A (Google  Yahoo  Earnings  Chart) 
JST,Jinpan Internat Ltd (Google  Yahoo  Earnings  Chart) 
LFL,Lan Chile Sa (Google  Yahoo  Earnings  Chart) 
MFW,M&F Worldwide Corp (Google  Yahoo  Earnings  Chart) 
PCCC,Pc Connection Inc (Google  Yahoo  Earnings  Chart) 
PTT,Vcg Holding Copr (Google  Yahoo  Earnings  Chart) 
ROCM,Rochester Medical Corp (Google  Yahoo  Earnings  Chart) 
SVNT,Savient Pharmaceuticals Inc (Google  Yahoo  Earnings  Chart) 
SWS,Sws Group Inc (Google  Yahoo  Earnings  Chart) 
SYX,Systemax Inc (Google  Yahoo  Earnings  Chart) 
TRCR,Transcend Services Inc (Google  Yahoo  Earnings  Chart) 
VIP,Vimpel Communication Ads (Google  Yahoo  Earnings  Chart) 
WFR,Memc Electronic Material (Google  Yahoo  Earnings  Chart) 



The biggest problem with most mechanical approaches is second guessing by traders. The signals which you do not take invariable perform the best.

Earlier posts in this series:
How to beat the market for $1.25 per week- Part3
How to beat the market for $1.25 per week- Part2
How to beat the market for $1.25 per week

Double Trouble

Stocks which had 100% move in last 260 days from the low and which are up more than 4% on higher volume. Today's minimum volume is above 100000. To understand how to trade this see my earlier post "How to find a stock which makes 1500% move in a year".
Only fresh signals are valid. Fresh signal is a stock which today has 4% signal but no 4% signal in last 5 days.

Total Number of stocks with 100% plus move = 362
Total number of stocks up 200% or more = 82
Total 4% plus signals for today=31
Number of fresh signals (stocks with no signal in past 5 days)=19

ACOR,Acorda Therapeutics Inc (Google  Yahoo  Earnings  Chart) 
ALTH,Allos Therapeutics Inc. (Google  Yahoo  Earnings  Chart) 
AMIE,Ambassadors Internat Inc (Google  Yahoo  Earnings  Chart) 
AMKR,Amkor Technology Inc (Google  Yahoo  Earnings  Chart) 
ARTX,Arotech Corp (Google  Yahoo  Earnings  Chart) 
BAB,British Airways Plc Adr (Google  Yahoo  Earnings  Chart) 
BMTI,BioMimetic Therapeutics Inc (Google  Yahoo  Earnings  Chart) 
CBEY,CBeyond Communications Inc (Google  Yahoo  Earnings  Chart) 
CCOI,Cogent Communications Group Inc (Google  Yahoo  Earnings  Chart) 
CLEC,Us Lec Corp Cl A (Google  Yahoo  Earnings  Chart) 
CRY,Cryolife Inc (Google  Yahoo  Earnings  Chart) 
ENPT,En Pointe Technologies (Google  Yahoo  Earnings  Chart) 
FRPT,Force Protection Inc (Google  Yahoo  Earnings  Chart) 
GIGM,Gigamedia Limited (Google  Yahoo  Earnings  Chart) 
GMTN,Gander Mountain Co (Google  Yahoo  Earnings  Chart) 
GSOL,Global Sources Ltd. (Google  Yahoo  Earnings  Chart) 
HTI,Halozyme Therapeutics Inc (Google  Yahoo  Earnings  Chart) 
LQDT,Liquidity Services (Google  Yahoo  Earnings  Chart) 
LTS,Ladenburg Thalmann Finl (Google