Market Gems Stock Selection: is not HOW MANY stocks, just carefully chosen stocks that are fundamentally and technically poised to break out. Here is what I usually have for a typical trading day:
1)I have about 2-3 Market Gems Daily Watch Lists open. That's it. I seldom need more. These are stocks that are technically poised for a breakout.
2) In addition I know the newsletter selections for the Weekly Earnings Plays inside and out. These are fundamentally in a position to beat the street or at least beat the 'revised downward' estimate. They also go down but they never did trigger buys so you just disregard them. I haven't had a 'tanker' in 8 months.
This is probably where I differ from most traders. Studying the stocks, and recognizing their historical price patterns, fundamental position, recent news on the stocks, new products in the offing, percent of market share etc.
3) It takes me about 10-12 hours to do one newsletter so I essentially 'learn' the stocks. So now you have two kinds of watch lists for any one day.
The earnings plays are 'best in show' and in a pivotal position to break out because they are the result of BOTH stringent Fundamental (100% weighted) and Technical (60-80 weighted) Analysis.
I don't recommend holding earnings plays through earnings (PFE would have been a casuality You can if its a fairly safe stock. I held HDI, SDTI, USWB through earnings just this week.
Now add the MOMENTUM of an impending earnings report to a stock. It moves them like an electric shock. Remember how AAPL,SLR,CMVT,HDI,CLX,YHOO, DELL,ELNK responded before their earnings report.
AND the last thing is....
4) The newest addition to the daily watch list are about 5-8 severely beaten down stocks priced from $2-$18. Everyone is instructed to take these out every day and put them in one database. I have about 40-50 of them.
I've only started using these since August 19 and they work out great. They have good volume and can give anywhere from 5 to 25% on a good trade. In fact they usually have 15-20 or more big blocks going through which makes them a favorite of institutions. (example: when CBTSY,WAC, EFII, VRTS move after they tanked, they are accompanied by large blocks, more so than when they were ordinary 'healthy' stocks)
You can watch less if you choose. They seldom gap up and make for good trading opportunities.
I set up my buy points every evening in those daily watch list that I post to the Market Gems Web Site. Everything gets put into my telescan autoscan to scan in the morning with my chosen indicators in real time. So in essence I'm following about 15 'fresh' watch list picks, about 20 earnings plays and the 40-50 'severely beaten down' stocks. That's less than most traders.
Now if the market is looking to be really down.... I just begin to watch the sectors/stocks that look to have the most chance of tanking. It's usually the S&P 100 and/or the Internets/large cap techs etc.
So I'll get some puts (using my triple screens) and watch the 5 minute charts.. But advising what to do in a down market is more than a post..and there is always more to learn. It's a booklet and makes for rigorous tick watching. But honestly you make good money on puts in down markets so its worth every effort. |
