This is the checklist that I go through everyday when deciding whether or not to initiate any new long positions. They are in no particular order and I only buy when all of them are checked off.
- Is the $SPXEW (The S&P500 Equal Weighted Index) above its 20DSMA? : Yes
- Is the slope of the $SPXEW ‘s 20DSMA positively sloped? : Yes 0.19%
- In my universe of stocks which is comprised of stocks that have an average daily volume of at least 100k shares, trade above $5, and have positive sales growth versus the year ago quarter, is the ratio of new 52w highs to the sum of new highs + new lows 80% or greater? : No 79.59%
- Of the S&P500 stocks is the ratio of new 52w highs to the sum of new highs + new lows, known as the $RHSPX, 80% or greater? : No 66.67%
- Have you read at the last 10 press releases that the company you are looking at has issued?
- Does the company you are looking at have a CQGR of 3.75% or higher in their Sales, roughly equating to a 15% or higher yearly growth rate?
- Does the company you are looking at have a CQGR of 3.75% or higher in their Earnings, roughly equating to a 15% or higher yearly growth rate? (However, I am not dogmatic on this one, as sometimes stocks with negative earnings can still rip higher on the expectations of future profits)
- Have you listened to the company’s latest earnings conference call? Do you know what was/is their guidance for the next quarter?
- Do you know when the company you are looking at will report their next quarterly earnings?
- Can you name at least one, but preferably 2, of the company’s peers? For example Nike, Under Armor, Lululemon. Do you know when your company’s peers report earnings?
- Have you checked if this company history of beating analyst’s estimates? You can check here by typing in the ticker you want.
- Do you know what the short interest is on this stock? Both the number of days to cover and the percentage of the float.
- Do you know how many analysts cover the stock? How many are a buy, sell, or hold? Are there enough negative analysts to have future upgrades serve as positive catalysts?
Ok so today we fell below the 80% mark on the high/(high+low) ratio for both my universe of stocks and the stocks in the S&P500. Overall the market still looks relatively healthy but because the market is not technically in an uptrend anymore, per my rules, I will not initiate any new longs tomorrow and as always I am constantly monitoring the news flow and price action of my current holdings.
Apparently, the news that Italy is having debt problems is coming as a huge surprise many traders & investors, even though the word PIIGS has been thrown around for more than 12 months now. Did these college educated morons forget that the word PIIGS is an acronym for: Portugal, Ireland, Italy, Greece, and Spain? I am so sick and tired of hearing about this shit. Default already and STFU or get a bailout and then STFU. I pray to god every day that we can go 1 day with out talking about this stupid PIIGS bullshit. Who the hell cares? If you own American bank stocks, you’re an idiot, if you own European bank stocks, you’re a moron. These imbeciles deserve to lose money. AAARRGG!!!!!