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How I Make Money In Stocks Using IBD & MarketSmith

How I Make Money In Stocks Using IBD & MarketSmith. Mike Jaffe mjaffe48@gmail.com 505-358-8798. Books I’ve Read / Techniques I Use. William J. O’Neill B ooks I’ve read each many times - brought up printed charts for the same period to see how they looked on my computer.

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How I Make Money In Stocks Using IBD & MarketSmith

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  1. How I Make Money In Stocks Using IBD & MarketSmith Mike Jaffe mjaffe48@gmail.com 505-358-8798

  2. Books I’ve Read / Techniques I Use • William J. O’Neill Books • I’ve read each many times - brought up printed charts for the same period to see how they looked on my computer • Suggest reading them in this order: Amazon price: $55.00 Appearance In book First 109 pages are annotated stock charts Appearance on my computer

  3. Tools I Used • Investors.com + eIBD (electronic version of IBD paper): time intensive • IBD’s MarketSmith software • Saves time via: • Screening • Charting • Pattern recognition • Many proprietary screens that focus on most important factors • IBD/eTables: (Don’t use - time intensive ) • IBD/Leaderboard (Don’t use - stock list too narrow)

  4. Methods I Use • William J. O’Neill in IBD • Analyze stock fundamentals: Choose stocks with strongest fundamentals: • Learn to Read charts: Choose stocks with a) best fundamentals, b) breaking out of strongest bases with c) lowest base count on d) highest volume • EPS % change current quarter ≥ 20% • Sales % change current quarter ≥ 20% • EPS % change up during last 3 years • Current price ≥ $10 • Return on equity (ROE) ≥ 17% • Profit margin ≥ 17% JAZZ ranked #1 in Medical group ranked #2 • Proprietary ratings (higher the better): • Composite ≥ 85 • Earnings Per Share (EPS) ≥ 85 • Relative Strength ≥ 85 • SMR ≥ 85 • Accumulation/Distribution A, B, C • Leading Industry Groups 1-50

  5. Find Stocks From: IBD Articles & Tables • Start by choosing stocks from eIBD UA up 60% in 8 months Section A: QIWI up 240% in 7 months EDU up 90% in 8 months Section B: Small weekly charts of IBD 50 & Market Leaders with buy prices (pivot point) Section B:

  6. Find Stocks From: Investors.com Screens • View Market Pulse daily • Compare stocks by downloading & sorting in Excel: very time intensive

  7. Quick Review IBD Bases: (http://education.investors.com/) • Flat Base: • Cup w/handle: • Double Bottom: • Ascending Base: • Saucer Base: • 3-weeks Tight: Occurs when, over 3 weeks, a stock’s weekly closing price is within 1% of its closing price during the preceding week Weekly Daily

  8. Find Stocks From: MarketSmith (IBD) • Screener and chart program in one: great time saver 1. Create and save custom screens from 135 technicals & fundamentals 3. Screen Results List includes base count & % to pivot 2. Choose from 64 prebuilt screens 4. Click on stock to bring up chart

  9. Find Stocks From: IBDMarketSmith Create alerts Do back testing Intraday, daily, weekly, monthly charts Can mark-up chart manually & save symbol to a custom list Shows base pattern & base count via pattern recognition Do stats pass IBD parameters? All fundamentals in one box (7 qtrs.): EPS % chng, Sales % chng, etc. Compare other top stocks in same group

  10. When To Buy: IBD MarketSmith • Daily chart: Buy 10-cents above highest point from 6 primary bases • Daily, weekly chart: Sell using numerous sell rules • Shows: • Pivot point (dotted line) • RS rating & slope of RS line • Blue band = + 5% above pivot • Stage count • Red band = - 8% from pivot • % to pivot or below pivot • Green band = + 20% apprec. (not shown)

  11. Find Stocks From: IBDMarketSmith Access proprietary lists

  12. Find Stocks From: IBDMarketSmith Open 2nd window Shows daily view while original window is in weekly view to show all info at once

  13. Find Stocks From: IBDMarketSmith Show percent gain of stock or group of stocks for any present or past date range

  14. Find Stocks From: IBDMarketSmith

  15. Find Stocks From: IBDMarketSmith

  16. Costs Compared: eIBD • eIBD: • YearMonth $189 ($16/mo) $240/yr($20/mo) Yearly savings = 21% • What you get: • Investors.com articles and tables • eIBD electronic paper • eTables: YearMonth $168/yr($14/mo) Yearly savings = 17% $139 ($16/mo) • What you get (each to view/sort & all to download to Excel): • IBD 50 stock list • IBD 85-85 stock list • Big Cap 20 stock list • New America stock List Total yearly cost: $328

  17. Costs Compared: IBD MarketSmith • MarketSmith: • YearMonth What you get: • Screening • Charting • Pattern recognition • Many proprietary screens that focus on most important factors $999 ($73/mo) $1347/yr($112/mo) Yearly savings = 35% + 45 days free • Options: • MarketSmith software available on iPhone = Free • Pattern Recognition = $139 • ‘Growth 250’ list with 30 proprietary screens = $349 Total yearly cost: $1487

  18. Summary: How I Make Money In Stocks Using IBD & MarketSmith • Find stocks with: • Strongest fundamentals • Breaking out of solid, clear bases • MarketSmith saves me more time and ability to find more breakout stocks worth much more than $1,487 cost (I made more than this in my first week using MarketSmith)

  19. Questions? Summary: How I Make Money In Stocks Using IBD & MarketSmith

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