All language subtitles for Lesson 3 - Stock Megatrades EN

Okay folks.

Welcome back to the July, 2017 90 10.

Mentorship, ICT mega trades for stocks.

This is less than three.

okay.

Before we get into it this way.

As a reminder, when we're looking
for mega trades, these are trades

that are significant in magnitude.

They're not little day
trades, not short term trades.

They're much more prolonged
in their duration.

And usually they can go about,
uh, six to nine months or more.

Uh, in the stock market, but as it relates
to stocks, uh, we're going to make a small

segue from, as I define quarterly shifts
in the Forex market and currencies, the

quarterly shifts that occur in stocks
are closely correlated to earnings.

So the impact of quarterly cycles and
earnings in the markets, we can't ever

overstate them as it relates to the
stock market because obviously every

company out there that trades publicly.

Their business is obviously intended,
you know, aiming at being profitable.

No one starts a business with
the intent of losing money.

So all of the stocks that are publicly
traded that we can invest in other

traders around the world can invest in
their goal is to make money, not so much

for their investors, but for themselves.

So great.

Is the number one driver for these
companies existence making money.

So their earnings that is reported on a
quarterly basis will have a great impact.

So every three months we can be on
earnings watch and anticipate the next big

movers based on their respective earnings.

Now overlapping of a trade conditions
and coupling this with the effect

of quarterly earnings is crucial to
finding the next explosive market moves.

seasonal tendencies.

Obviously I've mentioned this
throughout this mentorship, but when

we were focusing on stocks, as you
can see here, this is a generalized.

Seasonal tendency for the stock market.

It generally makes a low at
the beginning of the year.

Trades up into spring, goes into a
consolidation time period, usually

all the way into the fall and then
creates the best buying opportunity.

In my opinion, for stock investing around
September, October time, period, it can

be as late as November sometimes, but
the fall months, September, October,

In that three month quarterly shift
or earnings season, there could be

an enormous rally that takes place.

We're buying stocks.

There are times in a year when
throughout the spring and fall

months, the market will go higher.

Um, they're not always
going to lockstep to.

What the seasonal tendencies
are showing here in this graph.

But as I mentioned earlier in
this mentorship, when we're

looking at stocks, the best times
are the first half of the year.

And then the best overall for the entire
year is the latter portion of the year,

the fall months going into the end
of the year by coupling the quarterly

earnings and the seasonal tendency.

As I mentioned here, uh, if we look for.

Uh, March time period, the first quarters
expectation, earnings expectations, those

releases of earnings and the companies,
when they make those public will generate

a lot of movement in the price much
in the same way, the third quarter

earnings for stocks, which are reported
in around the fall time period as well.

They will be a huge generator of that.

Big end of the year rally now by
blending these two times of the year

with earnings seasonal tendency and
other facets will recover in this

teaching that make up a, make a trade.

You have a greater degree of odds stacked
in your favor, whether you're going to be

successful in selecting high flying stock.

the major market direction.

Now every significant mover in the stock
market is going to have its momentum

increased by the general market direction.

In other words are the three
general averages, the NASDAQ, the

S and P and the down gestural.

Are they moving?

Collectively or are they
moving lower collectively?

Obviously strong stocks can rally higher
without the assistance of major market

direction, but typically they accelerate
when the broad markets move higher.

Yeah.

Obviously it's been stated numerous times,
even when I was teaching on baby pips.

Uh, one of the easiest analogies is
if you're efficient in stream, you.

It's easier to swim with the current.

You don't want to be a salmon.

Okay.

Salmon swim against the stream.

And once they get to the top, the dead.

Okay.

They don't, they don't have
any existence beyond that.

Either a job.

That's it.

Well as traders, we want
to swim with the stream.

Okay.

We want to go with the current
and it's easier to find high

flyers in the marketplace.

When we understand the
direction of the marketplace.

Now, the mega trades are really
specifically aimed at looking for.

Because the market is
predisposed to go up.

The stock market is a Ponzi scheme.

It's meant to get people to buy into it.

So therefore they always have
to continuously create these

high flying opportunities.

The wonderful thing is, is the
institutions walk around barefoot and

then we can see them and see their
footprints wherever they'd gone.

They're easy to see it.

But problem is, is most traders are not
disciplined enough to wait for those

conditions or know what to look for.

We're going to teach that and this
teaching and in the August templates.

But when we were looking for mega
trades and stocks, it's going to

depend on the support of your trade
idea, seeing major market direction,

whether it's qualified, make a trade
candidate or not generally the stock

market moving up as a whole, all three
general averages, moving up as a whole.

That will support a strong
buying opportunity for stocks.

So while we understand that the strong
stocks that exist out there will move

sometimes ahead of the general market.

We want to be looking for
conditions when the general

market is poised to trade higher.

And if it's boys to trade higher and it's
a seasonal tendency or quarterly earnings

overlap, it is like one of those perfect
storms where everything comes through.

And then you have a really good chance.

It's not a be all end all panacea,
but you have really good chance of

seeing that stock appreciate and value

the fundamental screen.

Now, to some degree, there is a
fundamental impact to stock prices

and their respective movements.

I beat on this topic a lot because
I admittedly I'm not smarter than.

To go through all of the
fundamentals and digest that stuff.

And I believe that there are
folks out there that can spend

a great deal of time doing it.

And for whatever reason, you know, if
they look at certain things on the phone,

middle scale, uh, and come away with
some analysis and it makes them money.

Who am I going to?

Who am I to say that, that.

Valuable.

I just say from my personal standpoint,
over the last almost 24 years now,

I've very rarely looked at fundamentals
because of my limited capable.

As a, as a person, I don't
have the aptitude personally

to go through all that stuff.

So I've always looked for shortcuts to
give me the directional bias based on the

fundamentals by smarter folks than me.

Okay.

And the wonderful resource that's
available today is technology we have

in our smartphone, more information.

Insights available at our fingertips.

Then the president of the United
States had just 20 years ago.

It's phenomenal to know how
much, uh, resources that we have.

I mean, we have a library of limitless,
uh, capabilities in terms of understanding

where the information is right now,
and we can get it instantaneous.

So by having a systematic approach
to screening stocks fundamentally.

Okay.

It's going to be advantageous
to your bottom line.

The problem is, is where do you go
for these fundamental information,

information and insights?

There's a lot of different
books I've read over the years.

And while most of them, I don't
agree with them, or I felt that they

were over-complicating the process.

Um, it's really important that
we keep it, you know, Doable.

Okay.

Don't inundate ourselves with so many
tasks that we really won't come to the

conclusion of having a selection made,
because there's a lot of different

ways of doing fundamental scans.

Um, you know, looking at,
uh, earnings per share.

You're looking at, uh, quarterly,
uh, numbers, annual numbers, which

I do think those last two are.

Are important because as part of the
canceling approach that William J.

O'Neil uses and used to run his
company, investor's business daily,

which I wholeheartedly stand behind.

Um, not because I get anything
for it, but I am a customer.

So I've used it for years.

I've always referred to it.

And whenever I talk about stocks,
I think it's one of the best front

running instruments out there.

And it does have merit to follow.

Their breakdown over the sector in
industry groups, because they do

all that number crunching for you.

Now, there are folks out there that you
can go on YouTube and find, uh, various

ways where they go through individual
sectors and they go through individual

industry groups and yes, you can.

You do all, you can do all that work.

Okay.

And make you feel like you're a
scientist or a PhD level analyst.

I tried to do all that stuff in the
beginning and it just frustrated me.

So I've always looked for
some way to make it easier.

Okay.

For me to come to a decision,
because if I have no problem or

barrier to coming to a conclusion
about whether I want to be a buyer.

Once I knew what I want to do.

Okay.

I want to be a buyer.

Okay.

Then what do I want to be buying?

I have to have a very simple approach
to determining what it is I want to buy.

Cause once I know what that is, I'll have
no problem or fear going in and buying it.

Now I may not know
exactly when to get out.

It may go way farther than I
want to, you know, hold onto it

for, but I don't care about that.

You know, as long as I'm consistently
doing the right thing, The numbers

will take care of themselves.

The screening process though, it's best.

If you keep it short and simple to
avoid wasted time and energy and

use today's institutional tools,
because there are tools out there

that are relatively inexpensive.

Yes.

You had to spend some money sometimes,
but if you're going to be an investor,

you're going to be a trader and you're
want to be doing it on your own.

What's better.

You spending a little bit of
money once a year or a couple

of times throughout the year or
quarterly, or if you do it a monthly

subscription, it's not a lot of money.

If you turn all of your money
over to someone else to manage it,

believe me, they're not watching it.

Like you would be watching it.

They're not going to nurture it and
they're not going to cultivate it.

Okay.

And, and try to increase
its earnings potential.

Funds by far and large are just
turning everyone else's money.

They get fees and such.

If it happens to make money, then great,
then you're going to talk about how great

they are and you'll bring other people in,
but really they're not in a position to

guarantee your positive outcome, that the
industry is sold that way, but we're not

owed anything by these investors or these.

So it's better for you to spend a little
bit of money, invest in your insights

and trust your own decisions, because
that way you're minding the store.

No, one's going to mind the
store or mind your own business.

Okay.

Bev, you as an investor, as a trader,
that's the best advice you can give

yourself and your children is you
have to mind your own business.

You have to do the things yourself,
someone else managing your money.

Isn't going to appreciate the
things that you know are coming up.

Children are getting ready to go.

And then going into college,
do you have money for that?

Okay.

The guys that run these funds and
gals that run the fund, they don't

know what your family needs are.

They don't know what
the time horizons are.

They may ask you in a generalized survey
at the beginning when you open up the

account or maybe in passing and talking,
if you even get talked to anybody at

all, but generally they don't care.

So you want to be doing this informational
scan, fundamentally all on your

own, and you want to keep it simple,
short, and don't overcomplicate it.

And obviously your relative
strength analysis is important.

So when we look at the stock market,
the stock market sectors, okay.

Which are just broad
areas of the stock, mark.

Inside those sectors, there are industry
groups that are more specific about what

type of companies are in those larger
group of sectors, the market sectors.

So you have these big lists
which make up a sector.

Then you have a sub categories, okay.

Or industry groups that make
up those respective sectors.

It's a kitchen, an enormous amount of work
to literally go through all that stuff.

Okay.

And number crunch, and look for
leadership and all that stuff.

And over the last decade
or so, uh, there's been

advancements in technology and.

Trading tools.

And some of them have been
an inform of like heat maps.

Um, I played around with them
earlier on when they first came up.

Um, but at this found that it's much
better just to trust the resource

tool like investor's business daily.

Uh, they do a wonderful job in
my opinion of sorting through.

Um, sectors and filtering out
leadership, uh, industry groups.

That way you can really focus in on the
stocks that make up the leadership in

those respective industry groups, because
for relative strength analysis, really

what you're doing is in a bullish market.

You're looking for bullish sectors in
the marketplace and inside those sectors,

you want to find the strongest industry
groups that are going up and inside

these respective industry groups that are
going up, you want to find the strongest

outperforming stocks in those industries.

So, what you're having
is, is a bullish market.

Your timing, you're looking at the
market, that's predisposed to go higher.

Then you're looking at a sector that
already has evidence that it's going

higher because it's moving up already.

Okay.

So it's outperforming all the
other sectors in the stock market.

And then inside that as respective
sectors, you're focusing on the

industry groups that make up
the leadership industry groups

that make that sector go up.

So you're focusing on the strong.

Of the strongest of the strongest
during a bullish market, you

cannot get better than that.

That's what everybody wants to do,
but no one understands how to do it.

We all want to invest, you know,
we're told to invest for the

future, but we don't know what
it is that we're supposed to do.

And they should teach these things in
grade school, but they don't because

they want everybody to be slaves.

They want to be, uh, you
know, borrow, go into debt.

Okay.

No, you be the bank.

You be the loan officer.

You, you help other people
by giving your money.

Yeah.

If you have the mindset that you're going
to increase your net worth by investing

you, do you bet on a horse race where.

The horse has got, you know, previous
injuries and it just made its way into

the, you know, the contest and who knows
how it's going to perform, you know,

or are you going to back the one that
has proven itself and previous races.

Okay.

And, you know, for instance, you know,
a triple crown, you know, those, those

types of horses, they are proven horses.

They've proven themselves in other races.

So if we're looking at stock, It's better
to have our focus on areas that Ari

had predisposed movement to go higher.

They're already showing relative
strength across the sectors.

It's own relative strength across
the industry groups and inside

those respective industry groups.

You're looking for the stocks to
outperform or going up stronger than all

the other ones in that industry group.

So whether you're searching for index
stocks, as I've already taught before in

the stock selection, uh, templates and.

Modules that have done a free and in
the mentorship here or growth stocks,

which is what really the mega trade
candidates are really all about.

It's crucial for your stocks to be leaders
of their respective industry groups.

Now, if you couple this with the SMT, uh,
diversions that seen in the indices, okay.

Between NASDAQ, the S and P and the.

You got gold.

It's amazing.

The responsiveness you see in
the marketplace, because really

what you're doing is you're fine.

Tuning your attention to
what all the institutions.

Now I have not been
formally trained for stocks.

Okay.

I've not had anybody as a
market maker or a big firm.

Anybody sit down and telling me,
this is what the big boys do.

I had just fully convinced myself
of it because I've seen enough

of it over the 20 plus years.

That it's pretty easy to
find these things each year.

The problem is.

I want to be in one asset class
because my intention is limited.

So I'm uncomfortable for X for some
of you, again for X brought you to

me, but it may not be your asset
class of choice five years from now.

You may not ever trade four X.

You may never trade currencies, never
traded in commodities or bonds, but

you may end up saying, you know what?

I like stocks.

I'm not trying to convince you of it.

I'm just saying it could be.

So, if you feel that tug of war inside
internally, don't resist it, go along

with it and see where it takes you.

But here we have an example
of Facebook and Facebook is

plotted here as a bar chart.

And then I have the, the
Dow plotted as an overlay.

Okay.

So this is seen on bar chart.com
and you can do a simple comparison

chart and put in dollar sign.

D O w I again, it's dollar sign D O w I.

That's your comparison.

And when you do a Facebook,
which is symbol FB, you end

up with this chart here.

And all it did was highlight
the April time period where

Facebook had a high-level.

While the Dow made a lower low.

Now here, it's just
showing relative strength.

But at the same time in April, we
saw the Dow make a lower low, the

S and P make a lower low, but the
NASDAQ failed to make a lower low.

It had a higher, low,
and that's an index SMT.

During that time, we would
expect higher prices and stocks.

If you go back in the mentorship, you'll
actually hear me talk about how I felt

that, that we were going to see stocks
go higher and we've seen that happen.

Right now we're seasoning
going into a time period where

it should correct and go.

We'll see if it happens, but nonetheless,
relatively speaking, Facebook was

stronger than a general market.

It was unwilling to make a
lower low at the same time.

And as a result, Facebook had a
nice run up from one 40 to 1 65.

So about $24, $25 a share
in terms of movement.

That is nice folks.

That's a big, big move for
stocks and define those types of.

Okay.

In such a short span of time,
that's what a mega trade is.

You want to find something like that
that really puts out a lot of energy

covers a lot of ground and it moves.

Now this isn't the best.

Okay.

I just give you as an example here for
relative strength analysis and the effects

of a quarterly earnings overlap, quarterly
shift bark, a bull market already in

the stock market, and then applying
the index SMT and then finding a stock

that has a fundamental strong basis.

Fundamentally Facebook has been
proven to be fundamentally strong and

institutions are pour money into it.

And therefore we see this extrapolation
on the upside for its share price.

Okay.

So let's simplify a little bit more.

Okay.

So for seeking mega trades in stocks,
the process in simple terms begins with,

we anticipate new earnings leaders.

Next we plan seasonal tendency overlaps
for annual movements is every year we

anticipate when the bullishness comes in
beginning of the year and towards the fall

months where it makes it seasonal well
and rallies towards the end of the year.

So we're looking for those two
types of times of the year to have

a seasonal tendency and to overlap
with those respective quarterly or.

And then we're going to
refer to the direction of the

major stock in this season.

What's what's what's the market direction.

Is the market trading higher or is it
poised to trade higher at the beginning of

the year or during the fall mark months?

Because that's paramount because you need
that for the mega trade on unfold and

then you perform fundamental screening.

Now, again, I'm relying on
a investors business daily

as I'll show you after this.

But you have to do some measure
of fundamental screening to

pick out stocks that are poised
fundamentally to go higher.

If they're not making money, chances
are they're not going to go higher.

Right?

So the high flying stocks that go up
are the ones that make tons and tons of.

Okay, highly profitable stocks, not
just debt surprised and made money

yet for the first time, they want to
see an increase of sales over each

quarter, previous years, quarter to
quarter really, uh, uh, relationships.

Are they increasing annually,
annual sales, increasing.

Um, is there new products coming
out, all those ideas that we

mentioned and canceling those
things that lead well to overall

profitability for the, for the company.

Then I'm going to perform a
relative strength analysis to

filter out leadership stocks based
on sector and industry groups.

And again, I rely on investors business
daily to do that for me, it literally

takes minutes as I'll show you.

And then obviously once you have
identified the stocks that you

like, you would go into the options
chain and look at the Greeks to

determine which option and what
strike place you would look to treat.

For an opportunity.

And yes, during the month of August,
I will talk about the options and

the Greeks teaching you the gamma,
theta Delta, and all that business.

So we know what we're doing in terms
of, uh, stock trading with options.

Now, obviously this is an overview and
it's going to be fully re uh, refined

and defined in the PDFs that you get
for stock top-down analysis in August.

But I want you to think of.

The process of how we would go into it
every year, the same way every quarter,

the same way, looking for these influences
now between the spring and fall months.

Again, that's usually a consolidation
time generally, but there are times when

we can use the SMT divergence in a major
averages to time buying opportunities.

If there's a higher, low, and one of
the averages, when the other two make a

lower, low that's implying that there is.

Small short term bullishness
in the marketplace.

You can short-term trade these types of
stocks using investor's business daily

fundamental sort and scan and timing
with relative strength analysis and when

general market's supposed to go higher.

So by having those ingredients,
if you will, you end up getting

really amazing big pops in the stock
market in these respective stocks.

So let me take you over to
investors, business daily

and show you how easy it is.

Customer of using that resource.

I think it's one of the
best things out there.

If you're going to be investing in stocks,
if you're not going to be in investing

in stocks, then obviously you can just
watch this for entertainment purposes

and I guess be bored pipe, but as long as
short is, this is one way you can find it.

Amazing stock moving.

Each year.

Okay.

Folks, uh, running the investor's
business daily website.

And we're going to assume that, you
know, we've arrived at a time when

the stock market is poised to go home.

Um, we're at a quarterly, uh,
impasse where we expect some

shakeup in, uh, earnings.

We expect the new leadership to
step in, uh, for this, this quarter.

And we're looking for fundamental basis
to determine what stocks we want to be

looking through and finding that technical
relative strength divergence with.

In my opinion is like
the magic, uh, signal.

Okay.

That's the silver bullets pattern for,
for trading stocks, you know, it's, to me,

it's the absolute best thing out there.

Uh, everything else pales in
comparison because it just shows

real institutional sponsorship and
you, you can see it in price when

a stock fails to make a lower, low.

Uh, and it's an industry group
that's already stronger and it's in

a leading sector in the stock market.

When the stock market's
supposed to go higher.

Wow.

You just can't get any better than that.

Um, the only thing that's next is,
you know, finding another value, uh,

call option, and just get in there and
take it, taking you to take it out.

We're going to go to the
area called leaderboard.

Okay.

And you click on that, and this is
all that takes to do a fundamental

sort with investor's business daily.

It used to be, uh, I would go
through with all of the tables

and find all the, um, relative
strength, uh, ranks of 90 or better.

Um, the, uh, you know, all the bells
and whistles that would be offered.

The investor's business daily concept,
you know, our S uh, relative strengths

and earnings per share, um, you know,
their institutional POS institutional

sponsorship, um, rating all of those
little tabs, which I'll show you

in a second here, but, uh, they've
really streamlined it now today.

It's a lot easier.

So you go to the leaderboard,
you can go to IBD top 50.

And when you click on that, it
gives you a complete list of the

top 50 sorted by way of their
fundamental ranking system canceling.

Okay.

And you can look at all of the
research tools over here, and I'll

just take a look at, uh, T a L K T a L.

We'll go over to bar chart.com.

And we'll put that in T a L and
leave it sorted against the Dow.

Okay.

And right away at that same time, when
we can see the dowel making that lower,

low right here, what was happening in
this stock, it was not making a lower.

Okay.

It was during a consolidation when
smart money steps in and buys.

And from about about a hundred
dollars a share all the way

up to $150 a share folks.

Listen, that is a phenomenal,
phenomenal price move.

That's huge.

That's enormous in terms of how much.

Um, potential is there is in these types
of movements and most stock traders,

dream of seeing these types of moves.

Now, green, we are in a kind of a
fast market and market just keeps

going higher and, and higher, but
every single year, this method works.

Now you can do it the hard way and go
through all the sorting of looking for.

The IBD ranking systems and
do each individual thing.

And why you would do that now it's would
be silly, but that's how I used to do it.

And it would literally take me a
couple hours on a weekend when I

was getting close to these times
of the year, especially fall.

And once I had my sort list,
my watch list is he will, okay.

I would just go through every day and I
would look for these divergences okay.

To occur at the time of the year, when.

And if I have the industry group, please.

I have the sector that
are on fire right now.

That's going up and I can filter
out the ones that are strongest in

their respective industry group.

Oh man, I got it.

I got it licked, but let's take
a closer look at this right here.

This is the Dow right in here and
let's take it that same time period.

Again, it's this low here is essentially
March 27th, 2017, and the low.

Is April 19th, 2017.

We're gonna go over to the NASDAQ.

He can see

higher, low, the NASDAQ
was willing to go lower.

Now NASDAQ is highly
slanted for technology.

Okay.

So tech stocks are going to be really
outperforming, performing on the upside.

But we can see the divergence here with
NASDAQ feeling go lower S and P cash.

You can see at the same time
period failed to make a lower low.

And then at the Dow.

Making that lower, low.

So we have the index SMT divergence
at quarterly shift, higher prices.

We're called earlier in the year.

Go back and watch all the videos.

Uh, there's only a few times I've
talked about the stock market.

I said we would make a higher
high, and we've been trading rather

aggressive on leadership stocks.

Now let's go over.

And go and look at a company.

Let's go to L I T E

L I T E.

You can see this stock

has made a lower low in here while it's
still had a pretty good run in price.

With the timing of that lower, low in a
doubt, but failure swing on the NASDAQ.

That's our index SMT divergence.

We did not see a higher, low
form in this L I T E stock.

So while it was still on the fundamental
sort or screening by IVD, it would not

have been an ICT by, for a mega trade
because it made a lower low, we want to

find stocks that make that higher, lower
tier because the institutions will step

in and they're gonna be buying a lot.

So we'll go back over to the
investors business daily.

Okay.

And we'll look at the next one.

N T R I.

Okay.

And we have a stock here that just
recently gapped away from a consolidate.

Okay, so we've already moved away.

We gapped up, we have a big gap in here.

So what will you think?

And in terms of institutional overflow,
chances are that even though we have

the SMT diversions rate in here and
a higher, low formed price could

come down here and closing that gap.

Now it's interesting to how price
came all the way down into the top of.

Found support left the
gap there and rallied.

It could very easily just came
down and closed in that gap.

So we've already extended away,
too much and left a big old gap.

This would not be a good candidate
to be a buyer for stock because that

gap could close and we don't want
to be a buyer of a move that's gap.

We want to wait for the market to
be more of a consolidation and just

recently leaving a consolidation.

This is too much of a move away from the
consolidation that previously existed.

so we'll go back to IBDs 50 list.

Okay.

And we'll look at S T M P.

Okay.

Similar.

We saw, even though they had a nice
price rally in here at a time of the

S and T divergence with this lower,
low, and the doubt we were making

lower lows in the stock price as well.

So again, this would not be a mega
trade, even though it did perform.

This is not one, we would be trading.

So we're going to go back to our list
again, and I'm not going to do all 50.

So you guys know, um,
the next one is a N E T

Okay.

And we've had price and a recent
consolidation here, and then

it left the consolidation.

We went into another consolidation.

Yeah, it was much more of a base in
here and during the S and T diversions

period, lower, low, and the Dow, this
dock was already in a, in a consolidation.

So this is one that would
have been a selection in my

opinion, to make a move up.

Even though I had the gap here, we had
consolidated sideways for a little while.

At the same time, the SMT divergence
was occurring in the indices and

in price moved up from about one
30 up to 160, what a hundred and.

$62 a share sitting on
the bed about $32 a share.

It's a nice big hole move.

Folks went back over
to her IBD list again.

And

can I find one that, uh, I can
clearly see have performed well?

This in here.

Hadn't really nice trend here.

We'll see.

CTRL,

CTRL.

Okay.

Another, uh, price head gap.

The way that we consolidated S and
T diversions on this swing here.

Higher, low form.

So we had, I really wouldn't like this
one because it's below $20 a share.

I like to see stocks about 20
hours, preferably $25 a share.

Um, but you can see it had a nice
little move in here about 10 bucks,

which isn't all that terribly exciting,
but it looked really nice technically,

but it would have fit the criteria.

Had it been above 20, $25 a share

Now we're going to go and look at
the list in a full list version and

we can sort through and see all of
the, I like this rating right here,

the smart select composite rating.

Okay.

And I want 98 or higher.

Okay.

Because what it's done is it's made a
composite ranking of the earnings per

share rating, the relative strength
rating industry group, relative to.

Cumulation distribution writing.

And by blending all these key tools
that IBD has, uh, basically patent for

themselves, um, they can make a composite
rating number over here and they sort

this IBD 50, it used to be IBDs top 100
and they've condensed it down to now.

50, to me, to me, it's a much easier
approach to go through 50 stocks, but,

uh, you can go through all of them.

Okay.

And what we're going to do is
we're going to look at the share

prices in here, and we'll find
one between 25 and say $80 a share

okay.

Fox factory holdings.

So it's Fox F composite rating of 99.

So we're in look up Fox F so F O X F.

Okay.

And we can see that during the time of
the S and T divergence in here, lower,

low on the down, not NASDAQ higher, low
formed $27 a share went up $10 a share.

Okay.

Not a huge amount of movement.

Okay.

But look at the performance, not bad.

It's like a 50% return.

Okay.

We're to look for another one

right here.

Why, why incorporated ads?

So we'll look at why, why?

Okay.

And here we made a lower low, so
that wouldn't have been one for us.

The.

So that would have made the cut.

The next one we'll use is
pay comp software pay C

and it's real easy to do this.

When you're sitting down to do
the analysis, you just want to go

through and sort through this stuff.

Yeah, put some music on, get a pen
and pad and little does go through

and the ones that meet your criteria.

Okay.

Uh, that make the fundamentalist, you have
that stock on your list and you go through

and you keep watching until the indices
create the SMT divergence, and then you

go through and you find the stocks here.

We have the higher, low formed it's
trading around $50, $58 a share

price rallies up to 73 hours plus.

So it's a nice little move there
about 40% or so, uh, increasing.

And that's, I think about that
folks that's, that's decent in

less than a, you know, a year.

So can you imagine what the
options were paying you?

Okay.

Now we're going to pull up,
uh, our next on our list.

Let's get something over 50 bucks.

We'll do, uh, PayPal holdings, PYP, L

P Y P.

okay.

Really nice.

Higher, low formed during
the S and T diversions.

So we know institutional
buyers are coming in.

We're in a consolidation.

We're about ready to break out to
a new high and boom gap up here

later on after the divergence.

Okay.

So trading around $42 a
share up to $59 a year.

Nice move there.

Really nice move.

Go back to our list.

And here's one here trading at $84
a share, uh, CNC over to that one.

C N C.

Okay, man, have a higher low here at $70.

A share trades up to $86 or $16 a
share appreciation, nice movement

during consolidation, ready
to break out to higher highs.

So that's a nice move there

and we'll scroll down.

Uh, Dave and busters, uh, just took
my family out to that matter of fact,

uh, Uh, their symbolist play a Y.

Okay.

Really nice signal here.

Higher, low, lower,
low S and T diversions.

By around $60, a share goes up to
$73 a share, nice to movement to

Eric, about $13 a share appreciation.

And here's PRA health sciences, P R a H.

Okay.

The higher, low formed here and
price moves up about, uh, $15 a year.

Sure I got that.

Right.

2, 4, 6, 8, 10, 12, 14, 16.

Yeah.

About 16, $17 a share, not bad.

And we'll go back over here and we'll go
through and look at Activision blizzard.

And corporate is that ATV?

I a T V I is assemble a T V I.

Okay.

And we have a higher,
low here formed as well.

So we can see the institutions
are stepping in, uh, we're

close to this old high.

So we broke out with a gap here when
sideways game up and consolidated

again, during the SMT diversions,
that's a buy at $49 a share

trades up to $62 a share, not bad.

Very nice move.

No, this is just the IBD 50.

Okay.

There's another sort that they do.

Just want to find one more mover in here.

We'll look at, uh, Massimo core, M a S I

N a S I.

And this one here already really extended
up small little consolidation in here.

Didn't go lower rallied a little
bit, but then gave up the ghost

aggressively and traded softer.

The fact that we had all this
extension, no real consolidations in

here that makes it a suspect to me.

You can see it's a turtle soup.

It rise a little bit and plummets.

So while it still was fundamentally.

We'll say that we actually took that
one that could have been a loser,

not bad for the trades that we, uh,
sorta through real quick as a paper

trading idea from hindsight, these
stocks were fundamentally strong.

And another thing they do
is an IBD sector leader.

And you can go through
these and there'll be.

Similar, you just got to go through
the whole process of going through

the entire list, but by clicking
on this tab in this area here, it

gives you a group of stocks that are
leadership for their respective sectors.

And here's one for Facebook.

Okay.

We used it in the slides.

Say Facebook FB is the.

Naturally.

So we'll go over here to F F B F B.

And again, just like the slide showed
real clear, obvious, uh, diversions.

Okay.

Just above the old highs in
here during this consolidation.

So it didn't really extend too much.

We were in consolidation again,
S and T diversions higher, low

formed, big, huge institutional
stepping in one 40 trades up to 1 64.

So $24 a share price move.

Really.

Uh, going back to the sector leaders, um,
we'll go down to, uh, we looked at Y Y uh,

we'll look at we'll look at, uh, looking
for one from like 60 to $80 one here.

Okay.

We'll look at this one here.

A share price of $89 a share
basically 90 bucks a share is that AA.

And this one here, while
it did move nicely.

Um, and we had a lower, low form, so
that would not have been a candidate.

And we've also, um, we
left this consolidation.

We had a little bit of gap in here, so
that would have been a potential fill.

Notice how it went down to the top of
the gap, found support and rallied away.

So yes, this would have been a nice
mover, but the criteria is it has to have

a higher, low, and it didn't form that.

Ali Baba

B a B a, and don't be concerned about the
share price being over a hundred bucks.

Um, cause we use the option and the
option will give us a lot of leverage.

So we have the old high
here consolidation, small

little, uh, uh, uh, rally.

And when the consolidation again,
SNC diversions higher, low, uh,

by around one 12 went to 1 55.

Huge, huge move folks.

Big, big move.

Nice big performer there.

And that's a real quick.

Uh, example how you can use IBD as
an investment tool to sort through

fundamentally strong companies without
going through earnings per share

stuff, without going through all of
the, the stock tables and using all

the resources that other folks would
otherwise inundate themselves with.

Let, let folks out there that
number crunch better than you and

faster than you do the work for you.

And I think in my personal
opinion, investor's business daily,

they fared out really, really.

Fundamentally strong companies,
but by themselves they can

make the list all day long.

And just because they're on the list
and you can see just by the little

graphic picture they have here.

Like for instance, this MKS instruments.

Okay.

Look at the performance with this thing.

It went way down just
because it's on the list.

Doesn't mean it's going to perform,
they don't teach you the S and

T diversions in their studies
and their, in their teachings.

Okay.

That is something that I
picked up from Larry Williams.

Then I applied it with William
J O'Neil's fundamental stuff.

So I put the best, in my opinion, the
best of the best, the best technical

pattern I think exists in trading is the
relative strength divergence that seen

in stocks against the major averages.

And if you do that same thing
with the strongest sectors and

the strongest industry groups at
a time when it's going to go home.

Oh, you got it.

Licked.

It's it's I'm going to say it's easy to
find the high flyers they're graphically,

uh, you know, standing out in the charts.

You can clearly see them diverging.

And when they fail to make that lower,
low, when the indices are diverging

across the three, when fail one fails
and make a lower low, that means

that there's big bind coming in.

That's why that indices
not making that lower low.

So what are they buying?

Well, NASDAQ.

It's the one that was
failing to make a lower low.

So that means technology stocks are
going to be out performing clearly.

And if you go through all of the sectors,
like if you go to our website here, I'll

give you, you go to investor guide.com.

You can go through all of the.

Major sectors.

And these are the major sectors here.

We can go on the
technology, click on that.

And what it will do is it'll give you
all the stocks in that individual sector.

You can go into the industry group,
click on that and say, you want

to go to say, you want to go to

technical and system soft.

Okay, click on that.

Okay.

And it gives you all the stocks that
make up disrespective industry, group

technical and system software.

So you can see, you can do it the hard way
and go through sorting all this business.

Okay.

And try to find something, or
you could just simply use IBD.

There is a gentlemen on
YouTube that I watched.

Uh, a couple of months ago, um, he did
a breakdown on how to come up with a

relative strength list or sort for stocks.

And it uses tele charts, T E L E charts.

Um, it's like a $9 or $20 9, 29, 830
hours or 10 hours a month, uh, package

where you get in and you look at the
stock prices and you can sort through.

There, I don't know.

It's like a screener and you can
click on and do like different sorts

and different formulas and stuff.

He actually does a video and
I'll, I'll, I'll show it to you

next time we do our live session.

I'll pull it up and show you the link
and all, I'm not going to include

it here because this is part of it.

Uh, marketed stuff.

So, uh, during a live session,
I'll just pop up and share

the link with, with y'all.

I'm sure he won't mind that.

Um, but I think he did an interesting,
uh, approach to scaling through and

sorting the stocks that were, I guess,
Yeah, by his definition, fundamentally,

and technically, I guess, aligned
where you end up with a watch list.

He doesn't teach what I just
showed you in terms of the index.

SMT.

That to me, I think it's
is the silver bullet.

That's what everyone's looking for.

And if they understood the conditions
of the marketplace, which is obviously

the stage, you have to know when the
market's going to move, whether you're

trading commodities for X or whatever,
but once you understand that the stage is.

That's going to go higher.

Then if you start looking for that little
crack in the averages between NASDAQ

composite index, the S and P cash, and
the Dow Jones industrials by applying

them on a daily basis and looking for
them to diverge at logical time periods

every three months or so three or four
months, there's a time when it will die.

And when it does you go in and you do this
same sorting procedure, and I'm telling

you to only do it on the buy side, there's
ways you can sell short and I'll teach

you that in August as a separate teaching.

Predominantly the market's more
predisposed to go higher and it's better

to do a sort looking for stocks that
are going to go up because there's more

likelihood to see funds mutual funds,
uh, in large firms pouring money into

a company than they are leaving them.

Okay.

And not to say that institutions don't
leave a asset or a stock, but it's

better for you to be focusing on stocks
that they're pouring money into because

they're going to spend more money.

And pour money into it longer
periods of time than they are

just to get out of the stock.

So the moves are much more longer in
duration when there's a buying opportunity

and selling USI is really quick and
short and they were brought to you.

You got to know what you're
doing to sell short and stocks.

So hopefully you found this
teaching insightful, and

I'll give you more insights.

Obviously, when we go into
August, I'll give you the complete

step-by-step approach in PDF file and
in practice, you can see me do it.

This is to kind of like open your
eyes up to using an investor's

business daily as a resource to do
all your fundamental work for you.

And then blending that with our
technical approach to the trading and

feeling smart money's accumulation
and distribution patterns.

And until next time I wish you
good luck and good trading.