This How You Will Find Your Next Winner

Contraction in stocks with high momentum typically leads to more upside, it's that simple.

Here are a few recent examples.

The best way to find stocks with high momentum is to sort the universe of stocks based on year to date performance (high to low), or the best-performing stocks of the last 3-6 months, look at the top 200 stocks. Once you do that you want to wait until the stock consolidates (don't chase) to within a couple percent from its 20-day moving average, then it's just a matter of waiting for the first hint of expansion to jump aboard.

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Frank Zorrilla, Registered Advisor In New York. If you need a second opinion, suggestions, and or feedback in regards to the market feel free to reach me at fzorrilla@zorcapital.com or 646-480-7463. 

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DISCLAIMER

We live in a world in which we are bombarded with information, tweets, blogs, etc., content is the new salesman, content is the new marketing, content is the new networking. With information being so readily available, bloggers try to differentiate themselves with their writing skills, volume, and consistency, putting out blog posts to meet quotas. We are seeking to stand out from the crowd by showing performance, by taking all the information and seeking alpha, that’s the sole purpose of the blog. It won’t always be pretty; it’s never easy, and performance is spotty, but we seek superior risk-adjusted returns, not notoriety for our writing skills.  If this is something you can relate to, then this blog is for you.

You Have To Believe

When it comes to trading and investing you have to do what you believe in, and what you believe doesn't even have to be true, you just have to believe.

Some people believe that the only way to make money is by buying stocks that trade above $15. Others believe that stocks under $10 is where big money is made. A few believe that stocks need to have accelerating sales and earnings growth. Some believe that stocks with low PE is the answer to picking winning stocks. Whatever it made be, you have to believe in it.  Fact is that with the proper risk management the market will give you enough wins to reinforce your beliefs, regardless of the fact if those beliefs are true or not.

I like to focus on the things that are the most important things that make a stock move within my timeframe.

• What are the things that matter the most within your time-frame? 
• Is it stocks being above certain moving averages? 
• Do the stocks have to be above or below a certain price? 
• Do they need to grow their sales and earnings at a certain minimum amount; +15%, 25%? 
• Do they have to be a certain percent off their highs?  
• Do they have to have a low PE?
• Do they need to be in a current top 20 sector?

This is what you need to figure out, not by reading books from 1920, the 60's,80's, etc. but by actually looking presently at what is working NOW within your timeframe. What are the factors that matter the most within your average holding period?

Things change, and what worked in the past won't necessarily work in the future. If your beliefs about trading and investing come from your own work, then it will be a lot easier for you to have conviction during tough times. If you want to know if stocks need to have to meet certain criteria's to do well like some book or blogger said then just look at the best-performing stocks within your timeframe to see if it is true or not.

SIGN UP HERE FOR OUR STOCK PICK OF THE WEEK.

STOCK OF THE WEEK RECAP

Frank Zorrilla, Registered Advisor In New York. If you need a second opinion, suggestions, and or feedback in regards to the market feel free to reach me at fzorrilla@zorcapital.com or 646-480-7463. 

See How I Translate My Tweets & Blogs Into Actual 3rd Party Verified Trades

Work With Me

We live in a world in which we are bombarded with information, tweets, blogs, etc., content is the new salesman, content is the new marketing, content is the new networking. With information being so readily available, bloggers try to differentiate themselves with their writing skills, volume, and consistency, putting out blog posts to meet quotas. We are seeking to stand out from the crowd by showing performance, by taking all the information and seeking alpha, that’s the sole purpose of the blog. It won’t always be pretty; it’s never easy, and performance is spotty, but we seek superior risk-adjusted returns, not notoriety for our writing skills.  If this is something you can relate to, then this blog is for you.

DISCLAIMER

It's Too Late

The popularity of shorting volatility has risen exactly when the most popular short-based ETF'S have lost momentum. A few articles in the last couple of months have highlighted how easy it has become to short volatility.  As you can see in the chart below, SVXY has traded lockstep with the SP500, hitting highs and lows almost simultaneously until recently. The SP500 is off -1% from its recent highs and the SVXY is -16% off its highs. This is a character change for SVXY and XIV.

"Each morning, at the market’s open, Seth M. Golden, a former logistics manager at a Target store, fires up the computer in his home office in northern Florida and does what he has done for years: Put on bets that Wall Street’s index of volatility, the VIX, will keep falling".--NYT

Wall Street’s “fear gauge” has neared all-time lows this year. That hasn’t stopped retail investor Jason Miller from making a nice chunk of change betting it will go even lower.

The Boca Raton, Fla., day trader says he has made $53,000 since the start of the year by effectively shorting the CBOE Volatility Index, nicknamed the VIX. That includes a white-knuckle day on May 17, when the VIX spiked 46% following reports that President Donald Trump had pressured former FBI Director James Comey to drop an investigation into former National Security Advisor Michael Flynn.--LINK

INVESTORS HAVE NEVER BEEN MORE SHORT VOLATILITY FUTURES.

Here's the bottom line; With the can't lose short volatility ETF'S losing momentum this trade just got a little harder, and I would not be pressing my bets nor venturing out into this strategy right now.

Frank Zorrilla, Registered Advisor In New York. If you need a second opinion, suggestions, and or feedback in regards to the market feel free to reach me at fzorrilla@zorcapital.com or 646-480-7463. 

See How I Translate My Tweets & Blogs Into Actual 3rd Party Verified Trades

Work With Me

We live in a world in which we are bombarded with information, tweets, blogs, etc., content is the new salesman, content is the new marketing, content is the new networking. With information being so readily available, bloggers try to differentiate themselves with their writing skills, volume, and consistency, putting out blog posts to meet quotas. We are seeking to stand out from the crowd by showing performance, by taking all the information and seeking alpha, that’s the sole purpose of the blog. It won’t always be pretty; it’s never easy, and performance is spotty, but we seek superior risk-adjusted returns, not notoriety for our writing skills.  If this is something you can relate to, then this blog is for you.

DISCLAIMER