I have done this Stock Market Blog for nearly five years and hope that those who fish in my pond have felt that over the years I have kept you on the right side of the market, helped you GROW your Portfolio and 401K with my ideas, and have given you the key warning signs to protect your Nest Egg in understanding Fear and Greed. In essence Ron and I cover High Growth Strategies be they for Growth, Value, and Dividend Investors, with a prime emphasis on which way the wind is blowing in the Market Indexes.
With that preamble in mind, I have also shown you the value of using two Software Products which I use and have recommended by example after example in these blog notes. This Blog Note shows you that we are again at a critical juncture in the Market, and how to use the tools to your best advantage right now, especially when the examples in recent blog notes are fresh in your minds:
Talking about “Fishing” I have shown you a tool to fish for up and coming “New America” companies that become the lifeblood for continuing the growth of this country, which have a balance between strong Fundamentals and yet are in the early stages of their growth. Those who use the HGS Investor software know it well as the Nine Box Matrix, and particularly those that meet the requirements for Strong Earnings Growth and Revenue of over 100% in the last two quarterly reports, known as Box 7 Stocks. Better yet, these are the very stocks that invariably will enrich your Portfolio.
You will recall that the week before Christmas I gave you a long list of Box 7 stocks to keep a Beady Eye on which might help to make your Portfolio Grow and here it is posted from the Dec. 22nd, 2011 Blog note.
You will note that the list used equal lots of 100 shares each for me to keep it simple. It would be different for Equal Dollar Weighted. So let’s see how this bunch has performed since then, recognizing of course that the Market has been kind to us during this period, but none-the-less delivering a respectable 15.61% in a matter of 7 weeks, and up 9+% since I posted the note…if you had the temerity to take them all! That’s more than many make in a year in their Portfolios. Now if you were good at Technical Analysis which I assume you are and know when to buy and sell, just look at the 25 stocks that made over 10% to 98%, you might well feel this process has VALUE as a Strategy in providing High Growth to your Portfolio.
Don’t forget to either click on the chart or change the % of the view at the bottom of your Internet Explorer to get a bigger picture. Now those who have seen me time and again use the High Jump Tool to assess “Greed and Meltups” when the market is getting “Peaky” will recall that just a week ago I gave you the “High” Targets, again a tool found only in HGSI:
This time I show you how to raise the bar as the Market rises, the Greed turns to Irrational Exuberance, and to assess the next level of Higher and/or Highest based on past expectations. This work of mine helps you to understand “Greed and MeltUps”:
This chart was done yesterday and with today’s explosive move we have not only had the Golden Cross I predicted as the High Road Scenario, but have already surpassed the targets for the first two conditions shown above for the “Highest” Targets from recent history over the past year or so. Not only do I give you the “How To” do it, but also provide the expected results on a silver platter.
Having shown you only a smidgeon of the Value of using HGS Investor as your Analysis Tool, now let’s turn our attention to the other one I use, EdgeRater, which as you well know works hand-in-glove with HGSI and has provided me with the breakthroughs I feel I have made in using John Bollinger’s Indicators of %B and Bandwidth with a Woodward Twist!
Those who take Ron and my Monthly Newsletter were privileged to see my latest work of blending %B x BW into what my associates have dubbed the “Woody” Indicator and those who have both products are already reaping the benefits that is immediately visible. Yes, I know that those who are good at “scraping” gems like this will immediately do so into their favorite programs, but over these past twenty years I have given generously of my research to help others help themselves. Of course Ron and I expect some return for all the work we do by attending our Seminars and buying our Newsletter and many of you have supported us faithfully over the years for which we thank you. However, in this day and age it is a fact of life that scraping is here to stay without nary even a Thank You!
So now by any stretch of imagination the Market is Overbought and the key at this stage is to understand Fear and MeltDowns which is easy to figure out with what you see on this next slide, where I have given you the whole nine yards:
I see a lot of jabber on the HGSI Yahoo bb today about the TVIX and its value in hedging one’s Portfolio at times like these and I hope that those who are into this high risk good stuff will sit up and take note of how and when to get the best of both worlds BEFORE the TVIX takes off into the sunset:
If the cap fits, I will remind those who had promised me their third million that I am still waiting and maybe this goodie might tip the scales!
Now then…here’s a new teaser for you to ponder over when a market like this can take off into the sunset ala March 2003 and 2009, so don’t be asleep at the switch…more fun to come:
As I mentioned in my last Blog, we are holding a series of “Drip Fed” Videos that you can view at your leisure and we thank you for your enthusiastic response to our advertisement to help you help yourself. I’m sure you enjoyed the one that Ron did a few days ago and also the introduction by Chris White to what I will do next Tuesday, so look out for that, or if you haven’t, you can still Register:
Please take a moment to register for the EdgeRater / HGSI mini-course below:
…And last but not least, if you like all you see, why not sign up for the Seminar on March 24 to 26 where you will get the whole nine yards:
Register for the seminar:
Best Regards, Ian
I see the tom-toms are beating and you are wondering what’s next, so building on my latest work here in a nutshell is the essence of the Three Road Scenario for the Stock Market based on the recent action and the anticipated announcement for a Facebook IPO, which has put the market into “Marking Time” or the Middle Road Scenario:
Those who get the newsletter and were at our usual Monthly Meeting know that I have struck oil with using %B x Bandwidth as what has now been dubbed the Woody Indicator by my associates. But first let’s review the High Road Scenario with two slides that you are accustomed to seeing the status in a nutshell. The first one needs no explanation and shows that although the Major Market Indexes are still mostly in their tramlines, there has been a slight pull back the last three days:
I anticipated a month ahead that the High Road Scenario would happen in Mid-February and we have two weeks to go, so let’s see if we make it:
For the Low Road Scenario, the VIX had broken below 19 as I showed in my recent blog, and as being awfully quiet, but since it dipped below the lower Bollinger Band, it is no surprise that it has begun to stir. Better yet, for those who just want to know what to look for I have narrowed it down to a quick answer on the next two charts:
However, don’t count your chickens before they are hatched as it seems fairly obvious that the action of the last few days has been dampened by the anticipated annnouncement of the Facebook IPO, so although the VIX has begun to come alive, it looks like we have to wait for that event before we see any major push to the downside. However, here is what to look for whenever the VIX takes off:
Now if you are wondering how to apply the Keep It Simple Strategy (KISS) approach to all of this, The HGSI and Edgerater team have put together a series of “drip fed” videos for you to digest at your leisure. The series started on January 27, but over the course of the next couple of weeks you should find a plethora of information that you can view at your leisure so that you don’t have to be tied to watching the series every other day. Here is a Sneak Peak that shows you that the latest Indicator I have conjured up of %B x BW will give you a Jail Free Card BEFORE the VIX gets hic-cups!
…Judge for yourself the lightening speed of %B x BW as it spies big movements in the VIX to give the red alert when the Market is caving in:
Please take a moment to register below:
Best Regards, Ian
My faithful followers on this blog have been patiently waiting for me to put up a fresh blog note, and now that the Newsletter followers have had first insight into Ron’s and my thinking, it is now time to bring us all up to date. I felt I should use the same picture as Newsletter Readers will immediately relate to the High and Low Road Scenarios.
I hypothesized that we either head on up for a Golden Cross of the Nasdaq (50-dma coming up through the 200-dma) a month from now or we trot down again for the Low Road to test support at the 200-dma or lower, the 50-dma. My good friend Manu reminds me that we already have a Golden Cross with the DJIA, but all the other Market Indexes have still to achieve that significant event.
But first let’s look at the significant TIGHT moves all the Market Indexes have made not only this past week but in the last 20 days, which the picture below presents. It all started with a bang coming out of the shute on the very first day of the New Year Rally on 01/03/2012.
The High Road Scenario: I have overlaid a month’s worth of looking forward to depict how the Golden Cross comes to fruition in about a month from now, provided the move essentially continues as we have seen for the past month. I say that we will need to see some more Kahunas, but given that %B is already in the 90′s that is unlikely, but if we have a small pull back then we could see that extra adrenalin to push %B above the Upper Bollinger Band, i.e., >1.0.
The Low Road Scenario: This Rally runs out of steam and we head down for some form of correction. Fortunately, at this stage we are sufficiently above the 200-dma, which up to now was the strong resistance, that we have a decent cushion to give the Bulls an opportunity to find support at that line. All of this pre-supposes that we don’t get a Major Negative Surprise on the Global Economy front that has plagued this market the last eight months with a 17% correction in such a short timeframe of a matter of a week when most of the damage was done.
Having laid out the two scenarios simply in two charts, the next several charts show you the underlying pieces of the jigsaw and what to look for when a Rally gets a trifle “Peaky”. Let’s start with two old favorites, the S&P 1500 Pie chart showing %B Buckets and then the %B for where the S&P 1500 %B for the Index sits and the disparity between them.
Note in this next chart where it seemed the Rally had run out of steam with the eight consecutive days stuck between 0.8 and 0.9, it got a second wind and %B for the S&P 1500 is now sitting up a notch higher with a Bucket skip to now reach 0.99 and 0.95 in the last two days.
We haven’t looked at this next chart in quite a while mainly because there has not been this kind of momentum for it to give us clues as to the potential strength of the move. As you see on the right hand side with the two ringed numbers we are having healthy hits of over 300 stocks in Bucket >1.0…the overbought leaders! That’s healthy, but as you can see on the one hand we need to see this number rise to >500, it also signifies on the other hand that once reached there is invariably a pause to refresh before moving up again or it is the signal of a Climax Run with a decent correction to follow:
As you would expect, the VIX has gone mighty quiet in the last three days, whereas there was a one day attempt that gave a spike up of about 2.5 points as shown by the white ring, which then immediately fizzled to the lowly 18.28 level which hasn’t been seen since last July. As we well know this VIX Indicator is the “Go To” one especially as it just hit the lower BB, and so a rebound of some sort is near. Readers of the Newsletter now know that I have come up with an even better gem in %B x BW which together will give us the early warning signs that the ballgame is changing. Suffice it to say that any 1-Day change in the VIX which catapults it 3+ points will be a day to sit up and truly heed the shot across the bow.
Then again, another favorite Go To Chart is what is Chaikin’s Money Flow doing in three different timeframes. You can view this in HGSI, but understand that 34 period portion has yet to prove of value as it has been just 20 days in this fresh portion of the Rally. Note the major rush of Money Flow for the 13-Period and 21-Period which are at Record Levels.
…And now, last but not least, my favorite at tricky times like these, use the jolly old High Jump Tool only found in the HGSI software. I have taught you several times of how to use it and if you don’t know, come to our next seminar on March 24 to 26. I have done the homework for you and have given you that PROVIDED the Rally continues higher we have 50 to 75 points more to go based on past history before this Rally is really long in the tooth:
In summary, I have given you four different items to watch and those who have EdgeRater now have a fifth with %B x BW for the VIX as introduced by my good friend Chris White just a few days ago which I discussed in the Newsletter. Just let the Market tell you which Road it is on, but these approaches to seeing which way the wind is blowing will help you protect your hard earned Nest Egg well ahead of the big shoe dropping if that is to be our fate. Give us feedback.
Best Regards, Ian.
I note my faithful followers are wondering where I have been with the increasing hits on the blog. I have been busy writing the HGS Investor Newsletter which Ron and I publish every 15th. of the month. Here is the synopsis of what our contributors will get tomorrow of a 20 page document:
Overview:
The Stock Market is waddling along upwards since the last newsletter. It goes without saying that the skittishness is the concern of the Global Debt Crisis compounded now by the latest news of Credit Rating downgrades of some nine European Countries, with France being one of them. There is no full blown commitment by the Establishment, but one cannot ignore the fact that the Market Indexes have eked their way into new high ground territory relative to the shambles we ended up with for a Santa Claus Rally. I will define the High & Low Road Scenarios for a Golden Cross or a fall back into the doldrums one more time.
My report this month shows how the list of 36 Box 7 stocks I gave you hot off the press last month have done since then with an average gain of 8.55% (Blog Readers can see the list which I posted on the December 22 note); a review of watching Heat Maps for %B and Bandwidth; and my latest find which will give us the earliest possible warning of the next downdraught %B x BW with the VIX…the Volatility Index, which I feel is a new Gem!
This month, Ron continues his theme from the previous month of Buying Wolfpacks with strong internals showing you how to use screens that are supplied to you in the Woodward and Brown Reference files that are also explained in the video which goes with this Newsletter.
We look forward to seeing our faithful supporters in three months at the HGS Investor Seminar. I will put out the usual details for the Hotel later this month on the Yahoo BB.
Good Luck and good hunting. Ian.
Well, at least we had a good start to the New Year, even though the Grinch Stole the Santa Claus Rally last year.
This is a strong breakout and the biggest gap up was in the laggards, the Nasdaq and the NDX:
However, the challenge is right now to get through the 200-dma and the 405 Freeway…Down-trend-line (DTL):
This next snapshot says it all in a wink which shows the strength of the move today:
…And this chart shows how close we came to another collapse, but survived to fight today:
Here is a new Chart for you to chew on…it shows in chart form the current status of %B x BW. If you watch this carefully in the days ahead you will know if the Rally has achieved the goal of getting from 0.056 to above 0.1 to confirm the strength and that there is some conviction in the rally with strong volume :
This next chart shows that the drive has resumed and we are knocking on the door to getting %B >0.5 above 0.9:
%B above 0.5 is currently at 81% and has made a one bucket skip today as shown on the last line, above:
To start the New Year off, let me express my personal thanks for all the support and encouragement you have given to both Ron and myself over the 12 years that we have been associated with the HGSI Team. We like to hear from you:
Best Regards, Ian.