Quote Originally Posted by shawn_molodow View Post
Hi Mike,

This work looks great.

I have been watching EMES for weeks, and passed due to market conditions, its had some quick down moves last month (Jun), and choppiness/weakness in the oil complex generally- a wrong decision in hindsight.

I figured I had missed it after the Tu move. What are your add-on guidelines/rules for adding on Wed? It seemed extended after the 1st 15-20 minutes on Wed - to my eye.

Another Q: For your own portfolio, are about 100% of your buys from this universe of stocks - the weekly scan results (74 for this week)? I sometimes wonder whether I am considering too many names.

Thanks,

Shawn
Shawn, the universe of stocks for this service is larger than my normal watch list because it is difficult to know beforehand where a volume alert trigger is going to come from. Essentially every stock that I might eventually want to own goes into this service and we let price and volume speak for themselves. If the stock is trading below the 200-day it is taken off the list. The optimum buy point is when a stock nears the bottom of a consolidation by approaching the 50-day moving average or if below comes up through the 50 day and then shows a high volume move up. A continuation buy point occurs when price bounces at or surges upward through the 10-day moving average. High volume is defined by comparing end of day volume with the maximum volume during the prior 10 trading days where the price change was negative. Predicting EOD volume is tricky but the 6th order polynomial extrapolation formula previously developed seems to work well enough particularly when the predicted volume is much greater than the threshold volume.

EMES essentially showed a 10-day volume alert trigger two days in a row at the 10-day moving average. Yesterday its lows were close enough to the 10-day to act early in the day. By 20 minutes into the day I consider it as too far extended. Indeed when the extended condition occurred the volume alert trigger service removed the buy alert. I added early at 114.45 to bring my position up to a full sized position. When I take an initial position at a volume alert trigger buy point it is usually a half sized position. A full position for me is computed by taking the full cash value of my portfolio and dividing by 7, thus I am set up when I am 100% in to have 7 full positions. When the market is working well I will venture onto margin.

My normal watch list is made up of quality stocks that are are close enough to break out of a classic base structure such as a cup with handle, double bottom or flat base. I also put stocks that may break above a 3-weeks tight pattern. 3-weeks tight is a constructive area where large institutions are buying, the give away is that the stock closes each week at nearly the same price. It is possible to buy these when the price moves up above the highs of the pattern. I also will list some quality names that have pulled back to the 50-day moving average. The standard watch list is usually 10 names, sometimes far less.