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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 IndicatorValueComments
Daily# of stocks up >4% on high volume135No 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 quarter2049
Primary# of stocks down>25% in a quarter355Approaching 200 indicates extreme bullishness
Secondary # of stocks up> 50% in a month9But this one is not in extreme zone.
Secondary # of stocks down>50% in a month3
Secondary # of stocks up>25% in a month191
Secondary # of stocks down>25% in a month14
Primary
fast
# of stocks up>13% in 34 days2574
Primary
fast
# of stocks down>13% in 34 days591
MMA+% of stocks in confirmed uptrend70This 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

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 IndicatorValueComments
Daily# of stocks up >4% on high volume202
Daily# of stocks down>4% on high volume 158
Primary# of stocks up >25% in a quarter2214
Primary# of stocks down>25% in a quarter314Approaching 200 indicates extreme bullishness
Secondary # of stocks up> 50% in a month13But this one is not in extreme zone.
Secondary # of stocks down>50% in a month3
Secondary # of stocks up>25% in a month193
Secondary # of stocks down>25% in a month19
Primary
fast
# of stocks up>13% in 34 days2717
Primary
fast
# of stocks down>13% in 34 days526
MMA+% of stocks in confirmed uptrend66
MMA-% of stocks in confirmed downtrend 13
10 day
cumulative
breadth
ratio

4.42

What is market breadth

Posted on 7/28/2009

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

Posted on 7/27/2009

Daily View

$NYAD (Daily)

Daily View

$NAAD (Daily)

Daily View

$AMAD (Daily)


Market Monitor
Market monitor is market breadth
based market timing tool

Current Readings
Market in a rally mode.
Earnings season currently on





Type IndicatorValue Comments




Daily# of stocks up >4% on high volume175
Daily# of stocks down>4% on high volume 67
Primary# of stocks up >25% in a quarter2293
Primary# of stocks down>25% in a quarter373Approaching 200 indicates extreme bullishness
Secondary # of stocks up> 50% in a month21This is bearish indicates likelihood of pullback.
Secondary # of stocks down>50% in a month3
Secondary # of stocks up>25% in a month224
Secondary # of stocks down>25% in a month16
Primary
fast
# of stocks up>13% in 34 days2742
Primary
fast
# of stocks down>13% in 34 days592
MMA+% of stocks in confirmed uptrend66
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

Posted on 7/24/2009

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.



Are you serious about your trading?

If you are serious about your trading and want to build an enduring edge the Stockbee Member site might help you. Members tell me they have tried lot of things before coming to my site and it has offered them the most extensive and detailed methods to swing and position trade.

It is only for those who want to develop their own self sufficient trading method. It is not a stock picking service. It is service for you to build your own scans and trading method to have your own daily pick based on your method.

Be warned it will take you time to learn to trade. Learning to trade is difficult art and unless you are willing to spend months or years to perfect your strategy and also develop your mental edge you are unlikely to succeed in this game. Unless you understand that no site, no service, and no mentoring is going to work.

Why traders come to stockbee?

The member site is one of the most recommended site for learning to trade by other traders and bloggers. You will see no advertising, no hard marketing, no promotions, no free offers, no affiliate marketing, no incentive to other bloggers to promote the site, no constant twits self promoting the site, no free trial  and no tall claims of making you instantly wealthy, and yet the site attracts new  members everyday. Members come from all walks of life and all kinds of trading size and trading styles.

You will see that many trading bloggers have been using my market timing methods, scans , stock ranking lists and chart templates. They have developed their own methods based on my methods. Many paid newsletter site recommend my site to their subscriber for learning about trading and market.

Over the years thousands of traders have been members and those who benefited from the learning talk about the site to others or talk about the methods used and that is how new members learn about the site.





What will I learn in the members site?

The members site will give you in depth understanding to develop your own trading method. The emphasis is on making you self sufficient and confident of your own trading method and style.

As a member you will learn the basics of swing trading, momentum investing, growth investing and risk management.

You will learn about Stockbee Trend Intensity Breakouts method that uses momentum based swing trading to find 3 to 5 day swing trades for 8 to 40% profit.

You will learn about Stockbee Episodic Pivots Breakout method which uses Post Earnings Announcement Drift (PEAD) to find stocks that had a game changing earnings and that are likely to rally for 3 months to 12 months.

You will learn about  Stockbee Dollar Breakout method that uses momentum, range expansion and swing trading approach to find 5 to 40 dollar moves in high priced stocks.

You will learn about  Stockbee Lemonade Strategy for 401k which uses market timing and momentum to invest in 401k. You will get weekly update on how I am using the strategy on our 401k to do allocation decision.

You will learn about Stockbee Market Monitor method for market timing using breadth. It allows you to avoid risky periods in market and allows you to identify market turns. It is used for 401k allocation decisions.

You will learn about Stockbee Double Trouble method to find stock with confirmed upside momentum using anchored momentum and that are likely to continue their up move.

You will learn about Stockbee Night Time is Right Time method to find news catalyst based trade ideas for short term day trade and swing trade.

You will learn about Investor's Business Daily’s IBD 200 list and how it can be used to find swing trading candidates for explosive moves.

You will learn about Telechart 2000 and how to use it effectively to scan for swing and position trade ideas and to set up your 401k strategy.

You will learn about Jesse Livermore Range Breakout, Darvas Box setup, and many other member shared methods.

You will learn how to set up your own scans, select right kind of stocks, how to set up stops, when to enter , when to exit, how much to risk, how to track your trades and all other details about trading. You will learn about developing your own methods and not relying on others for trade ideas.

The site has hundreds of videos and trading methods and variation of methods. Members help each other in developing the methods and share actively their research and finding. A collaborative spirit allows you to get input from others on your trading ideas or problems.

The site gives you opportunity to interact with some of the most successful traders and learn from them about their trading methods. It is a vibrant community with members from different background and experience willing to help each other. The emphasis is on continuous learning and up gradation of market knowledge and setup knowledge. The members range from hedge fund employees, financial advisers, active swing traders, investors and new traders.

If you are looking to develop your own trading strategy the membership site might be for you. You have to be willing to put in the effort to build your own method. There are no silver bullets offered on members site. Every method, every scan, every nuance is detailed and all possible help is offered to design your own method.

Do you have a trial?

If you are just looking for trial you are better off trying thousands of other trading sites that offer free trial or one month trial and offer you promise of riches.

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The free blog has all the details about the methods I trade and if you go through the posts highlighted in the sidebar you will learn about them.



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To sign up go to www.stockbee.biz and follow the sign up process. The site uses Paypal for payment processing.

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.

MethodScan outputPossible BuyVerdict
IBD 100ffiv vprt ttek din cern cri abvt
din cern cri abvt
abvt is best out of the four
abvt open position
IBD 200ffiv 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 informationABVT
Relative linearity Telechartgood for previous move
Closeness to 6 month high % Telechartat high
Volume surge 50%+ Telechartyes
Prior day narrow or negative Telechartyes
+4 b/o in prior 5 to 10 days Telechartno 4% b/o0
-4% b/o in prior 5 to 10 days Telechartno -ve4% b/o
Float in million Telechart8 million
IBD EPS ratings 95 plus IBD80
Recent EPS acceleration IBDno
Sector Top 25 IBD7
Recent catalyst Moneycentral or Finviznyse euronext service
provider
Earnings due IBD7/28/09
Recent IPO Telechartshifted from BB recently
EPS growth 40 plus IBD693%
Sales growth 25% plus IBD20%
Margin IBD15.8%
ROE IBD16.7%
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

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



The running of the bulls

Posted on 7/23/2009

Market Monitor

Market resumes its rally
after a pullback.
Earnings season currently on.
Focus is on Episodic Pivots






TypeIndicatorValueComments
Daily# of Stocks Up >4% on high volume895Characteristic 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 58You should get worried if we see
2 or 3 days of 500 plus
readings on this.
Primary# of stocks up >25% in a quarter2250 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 quarter389
Secondary#of stocks up >50% in a month30Over 20 indicating
overbought level.
A correction of 1-3
duration most probable
course in next one week.
Secondary#of stocks down >50% in a month4
Secondary#of stocks up >25% in a month296This number is not really high.
So I think the pullback is a buy opportunity
Secondary#of stocks down >25% in a month16
Primary fast MM 34/13 + 2666Good breadth on this.
Primary Fast MM 34/13 - 646

Top ten stock by Dollar Volume up 4% plus on high volumef 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

Posted on 7/22/2009

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 ConceptApplication
Market Breadth can help you determine
market direction
Market Monitor
Equity selection is "the key" to profitabilityUsing 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 analysisGrowth 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 driftOther Episodic Pivots
Momentum and mean reversionEntry on weakness for swing trading in a momentum stock
Risk ManagementInitial stop placement
Risk ManagementPosition Sizing Calculator
Risk ManagementFast exit on trades that do not work
Risk ManagementPartial exits
Risk managementExit in to euphoria
Risk managementHigher 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






TypeIndicatorValueComments
Daily# of Stocks Up >4% on high volume150Some sort of pullback after muti day gains
was expected.
Daily# of stocks down >4% on high volume 157You should get worried if we see
2 or 3 days of 500 plus
readings on this.
Primary# of stocks up >25% in a quarter2023

Primary# of stocks down >25% in a quarter484
Secondary#of stocks up >50% in a month17Approaching 20 indicating
overbought level.
Secondary#of stocks down >50% in a month3
Secondary#of stocks up >25% in a month202
Secondary#of stocks down >25% in a month16
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.