Question:

Ok, I may be asking for too much.  Would it make more sense as soon as the BO happens,it would get displayed on the Breakout for Today.  Sometimes, the stock may retract at end of day, but, it should still be considered as BO happened.
Also, sometimes the stocks disappear from the "Breakouts Today" list.

My Response:

Yes, that’s exactly what happens now.  Well, since data is refreshed every
15 min. there may be some delay, but you’ll see them added as they happen
for the most part.  Notice FISV and GOOG broke out today.   They disappeared
because you logged in after 12AM Central Time – that’s tomorrow according to
the server time 🙂

In a few weeks, I’ll be releasing an alert system that will allow you to receive
alerts in your email when a breakout shows up.

Question:

Question:

I am trying use the DI indicator pretty much like the signal bar of the cell phone. But, I also want to know the history.
1.  Is institution start to accumlate?
2.  Is institution accumlate more and more?
3.  Is institution starting to unload?
4.  Is institution unload more and more?

That is, Use the DI indicators to indicate current institution accumlation status – from 1 bar to 3 bar?  Or de-accumalation, it was 3 bars before and is moving away from 3 to 2 to 1 (over a 30 to 40 days period)?  Something like that.

My Response:

The Demand Indicator measure the price and volume movement of a
stock over 15 and 30 days.  Essentially, the greater the score, the more
accumulation, the lower the score, the greater the distribution (or
institutional selling). 

I understand what you’re saying.  You’re wanting to see the acceleration
and deceleration of accumulation and distribution, but I think that DI indicator
as is will be plenty useful (there is only so much space in the Breakout
Tracker :). Just know that I’m always looking at ways to improve the
service and will consider new ways of displaying the data.

The DI indicator gives you a great "picture" of the health of the stock, but
when making a purchase decision you’ll need to look closer using the daily
chart for action over the last couple of days and finally a real time chart
(5 and/or 10 minute) to see price and volume movements at the time of
purchase.  Essentially, you are zooming in closer and closer.  The Breakout
Tracker is designed to find the stocks to zoom in on closer with very little
of your time.  The Demand Indicator as is provides a great initial filtering
tool for uncovering the best opportunities – a little more research is always
necessary.

Question:

So, how do I get informed of new additions and removals?  I noticed that there are quite a few that were introduced in the early 2004.  Would stock be removed from the watch list?

My Response:

You can sort by the Date Added column to see what stocks have been added recently.
I typically delete stocks from the breakout tracker if they’ve dropped below
the 200 day movig average.  That ‘s why you may see stocks in the database
for a long period without being removed.  Once the stock carves out a new
base, I change the pivot price and remove the B/O date to reflect the
current base.  I think in the future I will change the Date Added if I
change the pivot so those will be included in the stocks that were recently
added as well. 

Comments & My Response to one member

"I think it is better to find good stocks, then look for dips or a base."
That’s what the database is for.  It allows you to find top stocks very quickly and determine what stage they are at (ie. near B/O, already B/O, finding support, breaking down, etc.)  I know you aren’t a believer in technical analysis, but it’s the charts that reveal the future of the company.  Somebody always knows something and that shows up in price and volume levels.  In addition the common shapes of the charts reveal human emotions of fear and greed which never change.  Enron was thought to be a good company and good stock at one time, but the technical action revealed what was about to unfold.  A more recent example which I have discussed on this site several times in the past is DHB Industries.  Here was a company that was receiving order after order, yet insiders and some institutions were selling big time.  There was a clear divergence beteween the current fundamentals and news and what the chart was saying.  Fundamentals and news don’t tell the whole truth, charts almost always do.  On the other side of the equation, notice that some stocks will soar even though the fundamentals are awful.  What happens several months down the road?  You got it, the company starts announcing new products, improving sales and earnings.  The charts forecast the future – it’s as simple as that.
 
"Your return of 30% on your portfolio last year is impressive, but Jubak had a 29+% return on his"
I like Jubak and think he has some good suggestions, but it’s a weekly column and doesn’t give specific buy and sell points if I’m not mistaken.  It’s more of a hypothetical rather than an actively managed portfolio.  The focus on my service is teaching the investor while profiting.  That’s why I send detailed alerts, trading notes, technical analysis, etc.  I want investors to know why I’m selecting a particular stock and why I’m selling. 
 
"One concept I can’t get my arms around is drawing a line from some artifact on a chart 6 months back and trying extrapolate into the future"
Again, going back to what I said above, the reason this "technical analysis" works is because history repeats itself over an over again.  Why?  Because investor emotions of fear and greed will never change.  Support and resistance areas also manifest themselves because they are watched by so many investors – a self fulfilling prophecy if you will.  Technical analysis is absolutely critical.  Think of it this way.  You look at the fundamentals to choose a stock and use technical analysis to determine when to buy and sell that stock.  Short term traders use more technical analysis, while longer term buy and hold investors will base decisions more on the fundamentals.  I recommend something in between. 

Comment:

Thank you so much for your detail explanation.  It seems to have boosted my confidence a lot.  You know, sometimes, I think the system you have laid out is so straight  forward.  It makes me wonder ??. But, it seems to convince me that it should work.

My Response:

One thing you said caught my attention: " You know, sometimes, I think the
system you have laid out is so straight forward.  It makes me wonder ??.
But, it seems to convince me that it should work."

It doesn’t have to be complicated to be successful.  A big mistake that many
investors make is thinking that the more tools and indicators they have, the
more successful they will be.  You don’t need all the indicators and in my
biased opinion 🙂 I believe the only tool you need is the SelfInvestors
service!  If you have a firm understand of support/resistance and price/volume
movements along with discipline and the ability to master your emotions, you
WILL be successful.

1) I only buy from your list of stocks in the breakout tracker
2) I gather possibilities the prior evening and put them in a watch list using Medved Quote Tracker. This gives me real time tracking the next day. Real time alerts are also set in QT for my mental buy stops.
3) Unless the market is on a tear (I think I’ve forgotten what that is) I won’t buy until 30-60 minutes after the open. A couple of times I’ve gotten lucky because by the time I have gotten your buy alert the market has changed to a more favorable condition for my buy. I’m convinced you planned it that way for us amateurs.
4) Right after making a buy I set my sell stop at 5% or less. As soon as I make more than $20, I bring my sell stop to just above break even (including commissions and spread costs). If I can stay home and watch the market (which I can do a couple days a week) I keep adjusting my trailing stop by finding an intraday support and bringing my stop to just below that. Granted I have missed some great runs but the chance of finding one of those in the current market is pretty dismal.
5) Your hammering on money management finally woke me up to stop wishing the market would do what I want after I pull the trigger. I’ve only been holding positions for a short time — about six days on average, although the time gets shorter each week.

Q:  Often time, I heard the word "consolidation" or the "market is consolidating", what is it mean?

A:  This typically means that the market is taking a breather after a sizable run up or sell off.  It’s characterized by sideways or mild downward action and generally light volume.

————

Q: "This chart looks sloppy" – What is your definition of sloppy?  Can you provide a comparison example?  You have used the term choppy.. is that the same as sloppy?

A:  Sloppy is volatile price action with wide intraday price swings.  Examples: RTEC (sloppy), AEOS (smooth, tight price action).  Sloppy, choppy and volatile are essentially all the same and are words I use to describe wide intraday price swings (differnce between the high and low for the day)

————–

Q:  "Look for stock that has already "bounce off" the 50 dma".  So, should I wait for stock that is 5-6% from 50 dma to be bounced off, or wait for it to get closer to 50 dma?  When it is away from 50 dma, the "bounce off" (as you were referring) has not happened yet?

A:  Yes, you want to see a stock bounce off the 50DMA before making a purchase because you want to see it find support there.  If you purchase before it’s had a chance to test this support level, your risk increases greatly.  A good time to buy is right after you see a surge in price and volume off this support level and as close to support as possible.  I like to use a 5 min. real time chart for making buy and sell decisions.  So if I"m watching stock where the 50 day moving average is at 18 and the stock begins to surge in price and volume off 18 on my real time chart, I would pull the trigger on the trade.  I wouldn’t chase past 5% from the 50DMA.  I prefer to buy no more than 3% off support provide the volume is there on the buy side.

Question:

Where do the industry strength and general market conditions come in?
As I’ve learned the hard way – the street can kill you
if a stock’s group is not in favor or they’re reducing their weight in the
group. And of course if the NAS is shaky the breakouts fail. The group thing
is the hardest for me to conceptualize because by the time a leading group
is ranked high it has possibly already made it’s run up and isn’t
necessarily safe to buy. [edited] is basically saying that the group stays off
the radar until it is in the top 25% or so of his 197. Maybe that’s too
late. I have written some reports in ms access (using DailyGraphs group
data) to try to catch which groups are moving up. Also, Prophetnet’s screen
is excellent but there are a ton of groups (detail overkill?). Anyway, it
seems like when the market gets hot on a group they’ll buy almost anything
halfway decent in the group. But when they decide to cycle out ya better get
off the train tracks. Don’t laugh at me but I almost think it’s all about
the groups! Look at today – Oil & Gas forever – again. Thanks for listening

My Response:

When making the decision to buy or sell a stock, first and foremost in your
mind should be "what is the health of the market?" and which industry groups
are leading?  You’ll notice the the members portal begins with the Market
Outlook page where I post articles taking a look at the market from a
technical and psychological standpoint.  The calendar there provides a look
at accumulation and distribution days.  The Market Strategy box details the
best strategy, given current market conditions.  Right now, there is
uncertainty with a bullish bias which is why I recommend being only 50%
invested in the strongest industry groups.

The next tab you come to is the Top Industries tab which displays top groups
based on 10,20 and 30 day performance.   From my experience, this table
spots new trends long before they appear in [edited].  What I do is look for
groups that appear in the 10 day performance and make a note of it.  If they
can then make the move to the 20 day performance, more often than not this
means a group is making a move.  I would focus on that group and look for
stocks breaking out.  What you’ll find is that there may be several all
setting up for a breakout at the same time.  Right now, it’s still all about
transportation (trucking, railroads), chemicals, oil and metals (copper,
gold, silver).  While some profit taking has occurred, they continue to show
up in the top performances, so you should continue to concentrate in these
areas.  To find buy candidates from leading industries, you could click on
the "show all stocks" link under the Top Industries tab which will display
all stock in the Breakout Tracker that belong to the idustries listed in the
Top Industries performance table.  To find stocks that have yet to break
out, sort by B/O Date to display stocks with no date.  Then look for high
total rank and RS rating.

Be sure to take a look at my detailed report taking a look at how I go about
finding the best performing industries/sectors (I place much emphasis
on ETF’s now)