Showing posts with label Dr. Wish. Show all posts
Showing posts with label Dr. Wish. Show all posts

Friday, August 21, 2015

Dr. Wish Notes

My trading style of buying breakouts in momentum stocks  has been a highwire act. It requires heightened risk management because I expect that many of my trades will fail.  I'm wondering  if there might not be a better way. That affords more margin of error.

A friend of mine keyed me on to Dr. Wish and gave me some links to review.  I took some notes for my weekend research.  It re-emphasised for me the importance of the broad market.   As good as I have been over periods, I frequently have been trading against the grain of the broad market.

Here is the video  I watched,   and my notes from the video:
Key points:
  • Buy stocks making new highs -- Darvas
    • Stay out of a bear market. Do not go against the Grain. 
  • Weinstein Stages 
    • 30 week average cross stage 2
    • Only be in a stage 2 stock long -- Stage 4 for shorts 
      • The importance of stage analysis is crucial.  Buy only stage 2 and short only stage 4.
  • O'Neil CANSLIM
    • M - Market indexes 3/4 stocks follow market trends
      • Be on the right side of market averages
      • There is a time to be out of the market
    • Cup with handle
      • It is a base in a stock that has already launched at least 30%
      • 7 weeks
  • Livermore -- Buy going up. " I never buy too cheap or too easily."
    • Never average against a losing position. 
    • Pyramid up 
    • If a position fails. sell it
      • if it gives another signal-- re-buy it often an initial failed trade an lead to big gains if it re-sets.
Guidelines for buying growth stocks
  • Market must be in an uptrend
    • GMI must be buy
    • IBD market pulse
      • "IBD is very good you don't want to go against them"
    • other?s
      • Stockbee Market monitor
  • Great fundamentals -- IBD 50 
    • new highs--- stocks up 100% from a year -- MDT
  • Weinstein --
    • Stage 2 -above 30 week.
    • multi-month base
    • MACD rising
    • Stoch rebound from oversold
    • 10 > 30 week > avg.
    • price > 30 ma or close
  • Exit -
    • - below 30 week avg
    • tops never lowered only raised
    • tighten stop -- stop if GMI < 4 or TI2109 > 80-85% 
    • sell if doesn't act like it is expected
  • stops entry every trade as if it failed
    • know where it failed 
    • know what you are going to do. 
  • Key to market -- preserve capital
    • start with pilot buy
    • buy up, never down
    • options to hedge positions 
General Market Trend
  • GMI
  • Put /  Call Ratio
    • if above 1-- people too bearish bounce likely 
  • T1208  --% stocks > 40 ma. 
    • Yearly if single digits -- start pilot buys in indexes and add as it goes up. 
    • weekly 80 tops  -- < 20 bottoms
  • Market Trend Checklist
    • Warning-- when leading stocks break down-- its a leading indicator for the market
    •  measured by % of stocks that  hit new highs 10 days ago that are higher now.
SCANS:
Darvas- -  TC2000
  • percent of 52 Week high 90 -100
  • EPS % change last quarter > 50
  • c-30wkma >.01
  • c/minlow250 >1.8
  • Price > 30
  • 4wkgt 10wkgt 30wktg = true




Results. I put the scan together and it produced one good stock.  However, due the Market conditions--O'Neil's "M", no stocks should be bought at this time.


 good fundamentals / Good technical Scan
  • new high 250 days
  • Return on equity > 14
  • % change of rev last qtr >0
  • price >20
  • volume 20,000
  • eps change last qtr >25
Results:  I ran this scan and came up with only 1 stock. Even without the price and volume requirements.  Likely because the market sold off so heavily there are no stocks making new highs.


Timing purchase
  • 10.4.4 stochs
  • MACD
  • 30 day avg
  • volume
  • multiple time frames
Oversold and then cross 30 day avg buy signal

Other tool for buying stocks
look for cross of 10 week over 30 week.
  • Green line charts
    • Monthly - above 5 month average -- new monthly highs
  • Yellow Line
    • Now uses Guppy "Red white and blue" charts.
!!The same setup that works in an up trending market will fail in a downtrending market!!

More videos and Webinars 



Doctor's Orders:  

Goal is to catch a trend and ride it till it ends.
  • Manage risk / Trade smart 

  • General Market is key -- 
    • if you know the overall trend you have half the battle won
    • 70-80% stocks follow general market
    • In a downtrend do not try to find the needle in the haystack.
  • GMI/ GMRR
    • Gets out of market < 4.
    • In a good market stocks that hit new stops should keep going
    • want to see 100 new highs
    • IBD Mutual fund index   9currently bearish




  • T2108  -- lowest every 1987 crash -- below 10 look for market bottoms.

      • 80% tops out.
      • Tracks every day
    • MACD -- Nasdaq 100 stocks > MACD signal line. 
    Stan Weinstein's stage analysis

    longs only worth to own stocks in Stage 2
    Only time worth shorting is Stage 4. 
    • Sell stage 2 as 30 MA  starts to flat --- *Scot1and note, how about using MAMA to ascertain flattening?
      • Consider guppy charts. 



    • Win the easy ones
      • When market is in stage 2 -- it easy to make money on longs
      • if its not clearly in stage 2 it is better to be out of the market. 


    Submarine Scan -- stocks to short

    Posted by at No comments:
    Labels:
    Subscribe to: Posts (Atom)