Current positions and last 10 closed trade

This has been a good environment for trading. As of now market is overbought and late reversal today was not a good sign. But earnings related breakouts continue to work in this market.

The market did not get rattled by China drop

We are clearly at a extreme bullish breadth levels. Such high levels lead to corrections. Many such corrections can be sudden and vicious. But a overbought market can remain overbought fr long. In a long running bull market such overbought levels correct slowly and then the move resumes. At this stage we do not know how this move will play out. But you should be in a pullback/correction anticipation mood. Protecting profits made so far should be one of the prime objective. The market did not get rattled by China drop, which is a good sign.

• A series of 300 plus negative 4% days will be negative for market.
• The #of stocks up 25% in a quarter going below 200 would be bearish
• So far we have not seen these things.
• So breadth is showing you a good bull market currently.
• Which is getting reflected in our trading.

	Market Monitor Market monitor is market breadth based market timing tool		Current Readings Market in a rally mode. Earnings season currently on
Type	Indicator	Value	Comments
Daily	# of stocks up >4% on high volume	135	No heavy selling so far. But I have sold most vulnerable positions.
Daily	# of stocks down>4% on high volume	217
Primary	# of stocks up >25% in a quarter	2049
Primary	# of stocks down>25% in a quarter	355	Approaching 200 indicates extreme bullishness
Secondary	# of stocks up> 50% in a month	9	But this one is not in extreme zone.
Secondary	# of stocks down>50% in a month	3
Secondary	# of stocks up>25% in a month	191
Secondary	# of stocks down>25% in a month	14
Primary fast	# of stocks up>13% in 34 days	2574
Primary fast	# of stocks down>13% in 34 days	591
MMA+	% of stocks in confirmed uptrend	70	This is in bearish territory.
MMA-	% of stocks in confirmed downtrend	14
10 day cumulative breadth ratio	#of stocks up> 4% in last 10 days/ #of stocks down>4% in last 10 days	2.67

Current open positions

Symbol	Entry	Date
LCRD	6.20	7/28/09
KONG	11.92	7/28./09
UTA	11.80	7/28/09
CGA	8.87	7/24/09
GCI	4.48	7/16/09
HITK	12.53	7/14/09
OSK	18.32	7/2/09
LCC	2.30	7/2/09
STEC	24	7/1/09
STEC	13.52	5/13/09

What is market breadth telling us

We are clearly at a extreme bullish breadth levels. The T2108 is at 85.72. Such high levels lead to corrections. Many such corrections can be sudden and vicious. But a overbought market can remain overbought for long. In a long running bull market such overbought levels correct slowly and then the move resumes. At this stage we do not know how this move will play out. But you should be in a pullback/correction anticipation mood. Protecting profits made so far should be one of the prime objective.

• A series of 300 plus negative 4% days will be negative for market.
• The #of stocks up 25% in a quarter going below 200 would be bearish
• So far we have not seen these things.
• So breadth is showing you a good bull market currently.
• Which is getting reflected in our trading.

	Market Monitor Market monitor is market breadth based market timing tool		Current Readings Market in a rally mode. Earnings season currently on
Type	Indicator	Value	Comments
Daily	# of stocks up >4% on high volume	202
Daily	# of stocks down>4% on high volume	158
Primary	# of stocks up >25% in a quarter	2214
Primary	# of stocks down>25% in a quarter	314	Approaching 200 indicates extreme bullishness
Secondary	# of stocks up> 50% in a month	13	But this one is not in extreme zone.
Secondary	# of stocks down>50% in a month	3
Secondary	# of stocks up>25% in a month	193
Secondary	# of stocks down>25% in a month	19
Primary fast	# of stocks up>13% in 34 days	2717
Primary fast	# of stocks down>13% in 34 days	526
MMA+	% of stocks in confirmed uptrend	66
MMA-	% of stocks in confirmed downtrend	13
10 day cumulative breadth ratio		4.42

What is market breadth

Market breadth is one of the core concept you must understand if you want to succeeds in trading and investing in stock market . A comprehensive understanding of market breadth will help you trade confidently in any time frame. What should you know about market breadth.

1. What is market breadth
2. Why is market breadth called the grand daddy of all indicator
3. What information does market breadth tells you
4. How is market breadth calculated
5. What are the most commonly used market breadth indicators
6. How can you use market breadth for day trading
7. How can you use market breadth for swing trading
8. How can you use market breadth for long term investing
9. What are the famous market breadth "proprietary indicators" and how you can hack them
10. Which books explain market breadth the best

What is market breadth telling us

Daily View

Daily View

Daily View

	Market Monitor Market monitor is market breadth based market timing tool		Current Readings Market in a rally mode. Earnings season currently on
Type	Indicator	Value	Comments
Daily	# of stocks up >4% on high volume	175
Daily	# of stocks down>4% on high volume	67
Primary	# of stocks up >25% in a quarter	2293
Primary	# of stocks down>25% in a quarter	373	Approaching 200 indicates extreme bullishness
Secondary	# of stocks up> 50% in a month	21	This is bearish indicates likelihood of pullback.
Secondary	# of stocks down>50% in a month	3
Secondary	# of stocks up>25% in a month	224
Secondary	# of stocks down>25% in a month	16
Primary fast	# of stocks up>13% in 34 days	2742
Primary fast	# of stocks down>13% in 34 days	592
MMA+	% of stocks in confirmed uptrend	66
MMA-	% of stocks in confirmed downtrend	15
10 day cumulative breadth ratio	#of stocks up> 4% in last 10 days/ #of stocks down>4% in last 10 days	5.36

Why I am not worried about high frequency trading

It is the hot new thing on Wall Street, a way for a handful of traders to master the stock market, peek at investors’ orders and, critics say, even subtly manipulate share prices.

It is called high-frequency trading — and it is suddenly one of the most talked-about and mysterious forces in the markets.

Everyone is getting hyper about this article in NYT today. But what is the solution:. trade a idea with big edge. Don't trade 25 cents edges. Before HFT, there was quarter spread, there were SOES bandits, there were market makers and before that there were pools and market corners.

These things have been around since market started. If you trade a 20% or 50% edge strategy, you should not spend too much time worying about such things.

They can use all the HFT strategy they want to use, but if you trade a strategy like Episodic Pivots and find stocks STEC, OSK, HITK, or GCI at the beginning of their big move , those stocks are going to go up.

My philosophy is control things which you can control. Do not worry about uncontrollable forces. Your Trading Mix is under your own control.

How to find stocks using IBD 100 and IBD 200

On the IBD 100 and 200 list use the scan:

( 100 * (C - C1) / C1) >= 4 AND V >= 1000 AND V > V1 AND ((100 * (C1 - C22) / C22) <= 10 AND (100 * (C1 - C11) / C11) <= 10)

Ths scan output is then further narrowed down.

Method	Scan output	Possible Buy	Verdict
IBD 100	ffiv vprt ttek din cern cri abvt	din cern cri abvt abvt is best out of the four	abvt open position
IBD 200	ffiv vprt mv cri abvt	mv cri abvt abvt is the best	abvt open position

IBD 100/200 and DT and MDT checklist

This checklist helps you narrow the scan output to the best options out of the stocks meeting scan conditions.

For the selected stock ABVT the checklist was:

Criteria		Where to get information	ABVT
Relative linearity		Telechart	good for previous move
Closeness to 6 month high %		Telechart	at high
Volume surge 50%+		Telechart	yes
Prior day narrow or negative		Telechart	yes
+4 b/o in prior 5 to 10 days		Telechart	no 4% b/o0
-4% b/o in prior 5 to 10 days		Telechart	no -ve4% b/o
Float in million		Telechart	8 million
IBD EPS ratings 95 plus		IBD	80
Recent EPS acceleration		IBD	no
Sector Top 25		IBD	7
Recent catalyst		Moneycentral or Finviz	nyse euronext service provider
Earnings due		IBD	7/28/09
Recent IPO		Telechart	shifted from BB recently
EPS growth 40 plus		IBD	693%
Sales growth 25% plus		IBD	20%
Margin		IBD	15.8%
ROE		IBD	16.7%
Verdict			Thinly traded.
			open position

Like ABVT all the stocks undetgo a cheklist to narrow to nly few oportunities. ABVT was identified as a buy intraday and was entered in afternoon.

Key posts explaining these methods

1	IBD 100 and 200
2	Momentum Trading
3	Double Trouble and Modified Double trouble
4	Exits
5	How to find good trades in IBD 100 and 200
6	Trading Tools I use
7	Stops
8	How much to risk per trade
9	Modified Double Trouble Scans
10	IBD 100 and 200 Scans
11	IBD 100 and 200 Chart Settings

The running of the bulls

	Market Monitor		Market resumes its rally after a pullback. Earnings season currently on. Focus is on Episodic Pivots
Type	Indicator	Value	Comments
Daily	# of Stocks Up >4% on high volume	895	Characteristic of bull market are that they are difficult to ride. This market is like that. Just 10 days ago the bears were salivating at the prospect of H&S. That was a trap. Since then market have gone up straight. If you dithered or listened to bears, you never had a opportunity to get in at low risk. This reminds me of 2003 all over again. In the short run we have unsustainable momentum so extremely high probability of dip in next 1 to 5 days. But remember overbought markets can remain overbought long time. And tops take long to form.
Daily	# of stocks down >4% on high volume	58	You should get worried if we see 2 or 3 days of 500 plus readings on this.
Primary	# of stocks up >25% in a quarter	2250	You should not become completely bearish on market till the primary ratio becomes negative. It never became negative during the correction in June. So we benefited by buying b/o during that period and selling those positions today Buy dips in bull market till they stop working.
Primary	# of stocks down >25% in a quarter	389
Secondary	#of stocks up >50% in a month	30	Over 20 indicating overbought level. A correction of 1-3 duration most probable course in next one week.
Secondary	#of stocks down >50% in a month	4
Secondary	#of stocks up >25% in a month	296	This number is not really high. So I think the pullback is a buy opportunity
Secondary	#of stocks down >25% in a month	16
Primary fast	MM 34/13 +	2666	Good breadth on this.
Primary Fast	MM 34/13 -	646

Top ten stock by Dollar Volume up 4% plus on high volume	f amzn pot rimm medx isrg ebay ems celg mon large stocks are being bought. Money is flowing in to the market.
Top ten stocks by Dollar Volume down 4% plus on high volume	mcd pnc sndk swy gr dhr bms esi hban flir

• Coming in to today I was 170% invested, the mantra today was to sell in to the strength.
• By afternoon I was 50% invested only.
• Current focus is Episodic Pivots (EP) and that too earnings EP only.
• Within that I am interested in 100% plus eps kind EP.
• I am not taking many of the turnaround kind EP.
• Because in next phase of bull market growth stock should dominate.
• I am not in hit and run mentality.
• I am trying to take larger positions and hold for 40 % plus kind of gains.

Shortage of growth stocks

Only 102 stocks meet the 40/25 eps/growth and 100k average volume parameter currently. (40% plus eps growth and 25% plus sales growth and average 50 day volume greater than 100k)

Diamonds are rare so they are in demand.

If diamonds were available abundantly, they would sell in dollar stores for 99 cents.

Only 23 stocks in top 40 sectors have 40/25 growth story. Out of those 23 the best ones I have positions in currently.

In a bull market I like to buy only 100/25 stories but in this market I am willing to buy 40/25 story

This is a list of stocks meeting 40 eps growth and 25 sales growth criteria using Momneycentral scanner as of yesterday.

Bold faced stocks are current open positions.

CHLN

ENI

DVR

CBST

RRC

HITK

TSRA

PCX

LINC

ZAGG

THOR

CRTX

RST

PDA

GLDD

MYGN

ARST

NRG

GXP

ALXN

ALLI

HTS

SQM

MIR

DLR

PCL

EQIX

FLY

RGR

ADY

FSLR

FEED

CHDX

LIHR

BBEP

HMPR

ASEI

PEGA

CINF

AAV

OFC

UTL

TCL

CML

SJM

AGO

LINE

ODSY

CAST

CGA

SXCI

LOPE

TNDM

UTA

EZCH

CYOU

GMCR

AFAM

EOC

CELG

SOHU

SYNA

CRXL

ISIS

HMIN

LHCG

BBBB

DCP

IPCM

DGW

MAXY

MIG

LFT

CSKI

RAH

MED

HMSY

CHU

BEAT

ILMN

NOVN

STEC

ANEN

ERII

AMED

HRBN

PETD

EBS

BMR

APEI

NMM

ORN

FUQI

MTZ

EDU

YZC

RSG

GCA

GMR

ORA

HDB

APOL

SSL

LRN

CPTS

EZPW

Building strategy around core concepts

Lot of time is spent by new traders in tactical details of the methods like scan or indicator without understanding the core concept. Understanding the core concept is the key to trading any method.

Once you understand the logic behind core concept you would be able to do your own scans and trade some of the methods discussed here profitably with conviction.

Core Concept	Application
Market Breadth can help you determine market direction	Market Monitor
Equity selection is "the key" to profitability	Using Momentum+growth+Event catalyst
Price Momentum from a yearly low Because trends start from a low point	Double Trouble
Price Momentum six month	Modified Double Trouble
Historic precedent analysis	Growth stock+IBD 100 and 200
Momentum Anomaly	IBD 100 + IBD 200
Post Earnings Announcement Drift PEADS The most robust anomaly found to date	Earnings Episodic Pivots
Post news announcement drift	Other Episodic Pivots
Momentum and mean reversion	Entry on weakness for swing trading in a momentum stock
Risk Management	Initial stop placement
Risk Management	Position Sizing Calculator
Risk Management	Fast exit on trades that do not work
Risk Management	Partial exits
Risk management	Exit in to euphoria
Risk management	Higher risk on conviction trades

If you feel these ideas can work for "you" and want to develop "expertise" at trading these ideas, you need to understand the core concepts in detail.

The more you become knowledgeable at the core concept you will find it easier to trade methods based on that. You will be able to improve on them.

These are not the only core concept which work. Most of the things that work in he market are well researched and are in public domain. If you base your methods on core concepts you have a structural edge.

Focusing on core concept that work in market is key to building a profitable strategy.

Earnings remain in focus

	Market Monitor		Market resumes its rally after a pullback. Earnings season currently on. Focus is on Episodic Pivots
Type	Indicator	Value	Comments
Daily	# of Stocks Up >4% on high volume	150	Some sort of pullback after muti day gains was expected.
Daily	# of stocks down >4% on high volume	157	You should get worried if we see 2 or 3 days of 500 plus readings on this.
Primary	# of stocks up >25% in a quarter	2023
Primary	# of stocks down >25% in a quarter	484
Secondary	#of stocks up >50% in a month	17	Approaching 20 indicating overbought level.
Secondary	#of stocks down >50% in a month	3
Secondary	#of stocks up >25% in a month	202
Secondary	#of stocks down >25% in a month	16
Primary fast	MM 34/13 +	2181
Primary Fast	MM 34/13 -	892

Top ten stock by Dollar Volume up 4% plus on high volume	cat mon mrk fslr ntap jci nrg ip wfr stp
Top ten stocks by Dollar Volume down 4% plus on high volume	lmt aa btu mco rf aks sti lxk shw cno

• Current focus is EP and that too earnings EP only.

Leaders breaking out

	Market Monitor		Market resumes its rally after a pullback. Earnings season currently on. Focus is on Episodic Pivots
Type	Indicator	Value	Comments
Daily	# of Stocks Up >4% on high volume	409	A breadth thrust catches some off guard.
Daily	# of stocks down >4% on high volume	51	After multi day gains in index a pullback might be logical.
Primary	# of stocks up >25% in a quarter	2061	Stocks have held up well during correction. So many first phase leaders have started second leg of the move.
Primary	# of stocks down >25% in a quarter	570
Secondary	#of stocks up >50% in a month	10
Secondary	#of stocks down >50% in a month	4
Secondary	#of stocks up >25% in a month	96
Secondary	#of stocks down >25% in a month	21
Primary fast	MM 34/13 +	2226
Primary Fast	MM 34/13 -	1896

Top ten stock by Dollar Volume up 4% plus on high volume	hgsi bidu cat x lvs vale v tck hal etn
Top ten stocks by Dollar Volume down 4% plus on high volume	wft har tsn asbc safm infn asca orb ddss

• Current focus is Episodic Pivots EP and that too earnings EP only.
• Currently there are so many opportunities for 20% plus kind of swing trades.

Explosive moves for Monday

Symbol	sector rank	EPS %	Sales %	Float	Kirk p/s	Episodic Pivots	Comment
HGSI						Lupus drug trial better than anticipated.	no action
BIDU						Pre earnings rally	no action
CIT						AVOIDS BANKRUPTCY	no action
ETN						beats estimate. cost cuts
RTP						no catalyst
RHT						Will replace CIT in S&P	no action
ISRG	110	-36	0	37	93	analyst upgrade	no action
OREX						obesity drug mets trial goal	no action
CLWR	55	25	0	157	99	4G launch	no action
AFFX	110	-34	-54	69	57	analyst upgrade	no action
MHLD	184	19	205	51	48	no news	no action
VIT	28	25	47	11	91	China. Analyst upgrade. IBD highlight.	no action
PCBC						no news	no action
ZGEN						HGSI sympathy move
GMCR	4	120	60	27	85	pre earnings rally Top 20 sector catalyst	pre existing position
PWRD	32	53	44	23	95	China sector catalyst. Analyst upgrade. New product news.
FUQI	9	45	41	9	55	China sector catalyst
CHLN	161	500	192	25	91	China sector.	pre existing position
CISG	190	36	62	18	92	China sector
RINO	175	150	87	24	69	China . Extended.
						BELOW 5 MILLION USD VOLUME SELECTIVELY ANALYSED
XIN						China housing rally	no action
HNBC							na
TSTR							na
IMMU						HGSI sympathy move	na
IDIX							na
DRL							na
GRNB							na
IFON							na
SHZ							na
WPTE							na
CAMP							na
						IPO WITH LESS THAN 100 DAY TRADING HISTORY
CYOU	32	98	50	1	96	China	pre existing position
UTA	8	75	72	9	65	China	pre existing position

Recent posts explaining Episodic Pivots method

1	Episodic Pivots Trading Guide
2	If I have to trade only one method........
3	Episodic Pivots what to look for Part1
4	Episodic Pivots what to look for part2
5	Episodic Pivots what to look for part3
6	Explosive earnings lead to explosive moves
7	What is float and why it is important
8	10 most common Episodic Pivots
9	How to find stocks with last one month Episodic Pivots
10	Episodic Pivots Q&A
11	Episodic Pivot Daily Analysis Telechart Setup
12	How I do my Episodic Pivots Analysis part1
13	How I do my Episodic Pivots Analysis part2
14	The cockroach effect
15	One of the source of Earnings information
16	How to trade biotech EP