okay folks welcome back to July 2017 ICT mentorship ICT Mega trades for stocks this is lesson three okay before we get into it uh this is 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 in the stock market but as it relates to stocks 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 curly 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 greed 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 Mega 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're 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 month September October November 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 they're not always going to lock step two 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's earnings and the seasonal tendency as I mentioned here if we look for March time period the first quarter's expectation earnings expectation uh those releases of earnings in the companies when they make days 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 mega trade you have a greater degree of odds stacked in your favor whether you're going to be successful and selecting high-flying stocks to 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 p and the DOW Industrials are they moving up 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 a fish in the Stream you it it's easier to swim with the current you know you don't want to be a salmon okay salmon swim against the stream and once you get to the top they're dead okay they don't they don't have any existence beyond that I think there's a job that's it well as Traders we want to swim with the stream okay we're gonna go with the current and it's easier to find High Flyers in the marketplace when we understand the direction in the marketplace now the mega trades are really specifically aimed at looking for buys 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 barefooted and we can see them and see their Footprints wherever they've 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 you're 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 Mega 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's earnings overlap it is like one of those perfect storms where everything comes together and then you have a really good chance it's not they all end of Panacea but you have a really good chance of seeing that stock and appreciating in 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 smart enough 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 a fundamental scale and Come Away with some analysis and it makes them money you know who am I gonna who am I to say that that's not 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 capability as a person you know 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 and insights available at our fingertips than the president of the United States had just 20 years ago you know it's it's phenomenal to know how much uh you know 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 instantaneously 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 informations and 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 it's really important that we keep it new 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 looking at earnings per share you're looking at quarterly numbers annual numbers which I do think those last two are are important because it's part of the can slim approach that William J O'Neill uses and used to run his company Investors Business Daily which I wholeheartedly stand behind 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 you know various ways where they go through individual sectors and they go through individual industry groups and yes you can you can do all that work okay and make you feel like you're a scientist or a PhD level analyst to me I tried to do a lot of stuff in the beginning and it just frustrated me so I've always looked for some way to 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 or seller once I know 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 because 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 on to 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 and yes you have to spend some money sometimes but if you're going to be an investor you're going to be a Trader and you want to be doing it on your own what's better you spending a little bit of money once a year or a couple times throughout the year 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 they're not 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 funds 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 mining the store no one's going to mind the store or mind your own business okay better than 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 graduate and then going to college you have money for that okay the guys that run these funds and gals that run these funds 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 to talk 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 over complicate it and obviously you know 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 market inside those sectors there are industry groups that are more specific about what type of companies are in those larger group of sectors 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 it's 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 you know decade or so there's been advancements in technology and trading tools and some of them have been in the form of like heat Maps um I played around them earlier on when they first came up but I just found that it's much better just to trust the resource tool like Investors Business Daily they do a wonderful job in my opinion of sorting through sectors and filtering out leadership 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 there's respective industry groups that are going up you want to find the strongest outperforming stocks in those industry groups so what you're having is is a bullish Market you're timing it 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 is 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 strongest 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 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 out 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 horses 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 in previous races okay and you know for instance you know a Triple Crown you know those those types of horses you they are proven horses they've proven themselves in other races so if we're looking at stocks it's better to have our focus on areas that already have predisposed movement to go higher they're already showing relative strength across the sectors it's showing relative strengths 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 templates and modules that I've done on a free and in 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 Divergence that's seen in the indices okay between NASDAQ the s p and the Dow 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 are doing 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 tell me this is what the big boys do I had just fully convinced myself of it because I've seen enough of it over 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 attention is limited so I'm I'm comfortable with 4X for some of you again Forex brought you to me but it may not be your asset class of choice five years from now you may not ever trade Forex you may never trade currencies never trading 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 happen 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 barshot.com 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 uh Facebook which is symbol FB you end up with this chart here and all I did was highlight the April time period where Facebook had a higher low 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 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 in stocks if you go back into mentorship you'll actually hear me talk about how I felt it that we were going to see stocks go higher and we've seen that happen right now we're seasonally going into a time period where it should correct and go lower we'll see if it happens but nonetheless relatively speaking Facebook was stronger than the 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 140 to 165. 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 moves okay so that's 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 uh Park my bull market already in this uh 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 pouring money into it and therefore we see these extrapolation on the upside for its share price okay so let's simplify a little bit more okay so if we're 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 and so every year we anticipate when the bullishness comes in beginning of the year and towards the fall months where it makes the seasonal low 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 earnings and then we're going to refer to the direction the major stock in this season which what's what's the market Direction is the market trading higher or is it poised the 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 to unfold and then you perform fundamental screening now again I'm relying on in Investors Business Daily as I'll show you after this slide 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 money okay highly profitable stocks not just that 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 relationships are they increasing annually annual sales increasing is there new products coming out all those ideas that we mentioned in can slim those things that lead well to overall profitability for this 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 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 trade 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 entirely 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 refined and defined in the PDFs that you get for stock top down analysis in August but I want you to think about 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 major averages to time buying opportunities if there's a higher low in one of the averages when the other two make a lower low that's implying that there is a small short-term bullishness in the marketplace you can short-term trade these types of stocks using Investors Business Daily fundamental sort and scan and time it with relative strength analysis and when the General market 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 as a 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 investing in stocks then obviously you can just watch this for entertainment purposes and you know I guess be board pot but as long as short it is this is one way you can find amazing stock movers each year okay folks uh we're on the Investors 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 higher um we're at a quarterly uh impasse where we expect some shake up in earnings we expect the new leadership to step in 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 which in my opinion is like the magic signal okay that's the Silver Bullets uh 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 and it's an industry grid 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 the only thing that's next is you know Finding undervalued call option and just get in there and take it take and take it out but we're going to go to the area called leaderboard okay you click on that and this is all it takes to do a fundamental sort with Investors Business Daily it used to be I would go through all of the tables and find all the relative strength ranks of 90 or better um the uh all the bells and whistles you that would be offered by the Investors Business Daily concept you know RS relative strength and earnings per share um you know their institutional institutional sponsorship rating all 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 can slim okay and you can look at all of the research tools over here and I'll just take a look at the t-a-l okay t-a-l we'll go over to barchart.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 Dow making that lower low right here what was happening in this stock it was not making a lower low 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 a hundred and fifty dollars a share folks listen that is a phenomenal phenomenal price move that's huge it's it's enormous in terms of how much uh potential is there is in these types of movements and most stock Traders dream of seeing these types of moves now granted we are in a kind of a fast Market the market just keeps going higher and higher but every single year this method works now you can do it the hard way and go through all the the Sorting of looking for the IBD ranking systems and do each individual thing and to 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 have my sort list my watch list as 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 it should occur and if I have the industry group leader I have the sectors that are on fire right now Zone that's going up and I can filter out the ones that are strongest in their respective instant 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 27 2017 and the low here is April 19 2017. we're gonna go over to the NASDAQ you can see the higher low the NASDAQ was unwilling to go lower now NASDAQ is highly slanted for technology okay so tech stocks are going to be really outperforming on the upside but we can see the Divergence here with NASDAQ fill and go lower s p cash you can see at the same time period failed to make a lower low and then at the Dow clearly making that lower low so we have the index smt diversions at a quarterly shift higher prices are called earlier in the year go back and watch all the videos there's only a few times I talked about the stock market but I said we would make a higher high and we've been trading rather aggressive on leadership stocks now let's go over here and go and look at a company let's go to l-i-t-e -l-i-t-e [Music] now you can see this stock has made a lower low in here while it still had a pretty good run in price higher with the timing of that lower low in the Dow but failure swing on the NASDAQ that's our index smt Divergence we did not see a high or low form in this Lite stock so while it was still in the fundamental sort or screening by IBD it would not have been an ICT buy for a mega trade because it made a lower low we want to find stocks that make that higher lower right there because the institutions will step in they're gonna be buying a lot of it so we'll go back over to the Investors Business Daily okay and we'll look at the next one ntri okay and we have a stock here that just recently gapped away from a consolidation Okay so we've already moved away we gapped up we have a big gap in here so what were we think in in terms of institutional order flow chances are that even though we have the s t Divergence rate in here and a higher low formed price could come down here and close in that Gap now it's interesting to how price came all the way down into the top of the gap found support left the Gap there and rallied it could have 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 stocks because that Gap could close and we don't want to be a buyer of a move that's gapped away like that we want to wait for the market to be more of a consolidation and just recently leaving uh consolation this is too much of a move away from the consolidation that previously existed so we'll go back to ibd's 50 list okay and we'll look at stmp okay similar we saw even though they had a nice price rally in here at the time of the s t Divergence with this lower low in the Dow 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 nicely this is not one we would be trading so we're gonna go back to our list again and I'm not going to do all 50 so you guys know the next one is a-n-e-t okay and we've had price in a recent consolidation here and then it left the consolidation we went into another consolidation here see how it was much more of a base in here and during the s t diversions period lower low in the Dow this stock was already 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 s t Divergence was occurring in the indices and price moved up from about 130 up to 160 what 100 62 dollars a share so not bad about 32 a share and some nice big home move folks going back over to our IBD list again and try to find one that I can clearly see have performed well this in here had a really nice Trend here we'll see Ctrl Ctrl okay another uh price had gathe away that we consolidated s t diversions on this swing here higher low formed here so we had I really wouldn't like this one because it's below 20 a share I like to see stocks about twenty dollars preferably 25 a share but you can see it had a nice little move in here 10 bucks which isn't all that terribly exciting but looked really nice technically but it would have fit the criteria had it been above 20 25 a share okay 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 strength accumulation distribution rating and by blending all these key tools that IBD has basically patent for themselves they can make a composite rating number over here and they sort this IBD 50. it used to be ibd's top 100 and they've condensed it down to now 50. assuming to me it's a much easier approach to go through 50 stocks but 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 foxf composite rating of 99 so we're going to look up foxf so f o x f okay and we can see that during the time of the s t Divergence in here lower low on the down not in NASDAQ higher low formed twenty seven dollars a share went up ten dollars 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 gonna look for another one right here why why Incorporated ads so we'll look at y y okay and here we made a lower low so that wouldn't have been one for us to pick so that would have made the cut the next one we'll use is paycom 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 the stocks you know put some music on get a pen and pad and little just go through and the ones that meet your criteria okay that make the fundamental list you have that stock on your list and you go through and you keep watching until the indices create the s t Divergence and then you go through and you find the stocks here we have the higher low formed it's trading at around 50 58 a share price rallies up to 73 dollars plus so it's a nice little move there about 40 or so uh increase and that's the thing about that folks that's that's that's decent in less than uh you know a year so can you imagine what the options were paying out okay now we're going to pull up uh our next our list let's get something over 50 bucks we'll do PayPal Holdings pypl -p-y-p-l okay really nice higher low formed during the s 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 share nice move there really nice move go back to our list and here's one here trading 84 a share uh CNC I'll go to that one CNC okay we have a higher low here at 70 a share trades up to eighty six dollars or sixteen dollars 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 Buster's uh just took my family out to that matter of fact uh it's kind of cool uh they're symbols play PL a y okay really nice signal here higher low or low s t diversions by around 60 a share goes up to 73 dollars a share nice movement there about 13 a share appreciation and and here's pra Health Sciences p-r-a-h okay higher low formed here and price moves up about uh fifteen dollars a share make sure I got that right two four six eight ten twelve fourteen sixteen about 16 17 a share not bad and we'll go back over here and we'll go through and look at Activision Blizzard Incorporated it's an atvi atvi is a symbol a t b 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 went sideways came 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 movement there now this is just the ibd50 okay there's another sort that they do just want to find one more in here we'll look at uh Massimo Corp m-a-s-i -m-a-s-i and this one here already really extended up small little consolidation in here didn't go lower rise 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 uh suspect to me you can see it's a turtle soup it rise a little bit in plummets so while it still was fundamentally there we'll say that we actually took that one that could have been a loser not bad for the trades that we sorted 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 they'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 symbol naturally so we'll go over here to FB FB and again it's like the slide showed real clear obvious uh diversions okay just above the old highs in here during this consolidation so we didn't really extend too much we were in consolidation again SNT diversions higher low formed big huge institutional stepping in 140 trades up to 164 so 24 a share price move really nice going back to the sector leaders um we'll go down to uh when I looked at YY we'll look at we'll look at uh looking for one from like 60 to 80 hours one here okay we'll look at this one here aaoi share price of 89 a share basically 90 bucks a share so aaoi [Music] and this one here while it did move nicely we had a lower low form so that would not have been a candidate and we've also we left this consolidation we had a little bit of a 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 Alibaba b-a-b-a and don't be concerned about the share price being over 100 bucks um because 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 rally consolidation again smt diversions higher low but by around 112 went to 155 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 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 Investors Business Daily they fared out really really good 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 of 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 t diversions in their studies and their in their teaching stuff okay that is something that I picked up from Larry Williams that I applied it with William J O'Neal's fundamental stuff so I put the best in my opinion the best of the best the best technical pattern I I think exists in in trading is the relative strength Divergence that's 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 higher ah you got it licked it's it's I'm gonna say it it's easy to find the High Flyers they're graphically uh you know standing out in the charts you can clearly see them diversion and when they fail to make that lower low when the industries are diverging across the three when one fails to make a lower low that means that there's big buying coming in that's why that industry is not making that lower low so what are they buying well NASDAQ is the one that will was failing to make a lower low so that means technology stocks are going to be outperforming clearly and if you go through all of the sectors like if you go to there's a website here I'll give you go to investorguy.com you can go through all of the major sectors these are the major sectors here we can go into technology click on that and what it'll 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 [Music] Technical and system software okay click on that okay and it gives you all the stocks that make up this respective Industry Group Technical and system software so you can see you can do it the hard way and go through sorting all this business yourself okay and try to find something or you could just simply use IBD there is a Gentleman on YouTube that I watched a couple months ago he did a breakdown on how to come up with a relative strength list or sort for stocks and it uses telecharts t-e-l-e charts it's like a nine dollar or twenty dollar nine twenty nine each either thirty dollars or ten dollars a month uh package where you get in and you look at the stock prices and you can sort through their I don't know it's like a screener you can click on and do like different sorts and different formulas and stuff he actually does a video and I'll I'll show it to you next time we do our live session I'll pull it up and and show you the link and all I'm not going to include it here because I'm this is part of my uh marketed stuff so 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 approach to scaling through and sorting the stocks that were I guess 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 is is the Silver Bullet that's what everyone's looking for and if they understood the conditions of the marketplace which is obviously the the stage you have to know when the Market's going to move whether you're trading commodities for Forex or whatever but once you understand that the stage is set that it's going to go higher then if you start looking for that little crack in the averages between NASDAQ composite index the s p cache and the Dow Jones Industrials by plotting them on a daily basis and looking for them to diverge at The Logical time periods every three months or so three or four months there's a time when it will diverge and when it does you go in and you do the 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 but 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 in large firms pouring money into a company than they are leaving them okay not to say that institutions don't leave a asset or 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 these really quick and short and they're abrupt and you got to know what you're doing to sell shortened 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 but 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 trading and viewing smart money's accumulation and distribution patterns and until next time I wish you good luck and good Trading