Boston Meetup: Blue Sky Investing

Bonus Session: General Market, Stock Tickers

October 20, 2018

John Pocorobba
jpoco722@gmail.com
General Market

1. What were the Signs? (Near Term Top)

2. Follow Through Day Concept
3. Audience Stock Tickers
Nasdaq - Daily

Replace with latest view

 Distribution Days on Indexes

• Distribution = Selling Pressure on the market

• Down Day (0.2%min) with increased volume from previous day
• 5-6 Distribution Days within 25 days can top a market
 Dday but #1
drops off (25d)
6 7
Nasdaq - Daily 8
3 5 9
Dday #1, #2 Distribution on FTD
way up

Dday #3. Reversal at NH on

large range

Dday #4, #5 Back to back

Distrib day (Start Selling weakest
stock)
NH but no
Dday #6, #7 Rev’l @ Highs confirmation in
again,Bad close (Sell more RS Line
stock)

Dday #8 Huge Vol, No price

progress (out of the market)

Dday #9 Collapse
Nasdaq - Daily Subtle Clue: Blue
day but stalling on
huge volume
Two weeks of
bad closes

• Breakouts Failing
• Watchlist Shrinking
• Index Bad Closes
• Full # of Distribution
Days
 News Headlines:
Dow hits New
Highs

Nasdaq - Daily

- Growth Stocks hit very hard

- Liquid Leaders displayed
distribution previous 3 weeks
(AMZN, NFLX, PYPL, GOOGL)
 What to do now?

• Protect your account; take gains, cut losses

• Big losses starts as small losses
• Build your watchlist;
• Scan High Rel Str. stocks
• Watch Sectors, Industry Groups
• Wait for a Follow Through Day
Economic Cycle/Industries

Early Mid Late Early Mid Late

Expansion Expansion Expansion Contraction Contraction Contraction

Energy

Basic materials Consumer Staples

Utilities
Capital Goods

Services Financials

Technology
Consumer Cyclicals

Transports
Cyclical Sectors
Defensive Sectors
“Follow Through Day” Concept
Index hits a New Low

a. Look for day the index

closes higher and count as
Day #1 of rally attempt

b. Look for FTD on Day #4 or

later in the attempted rally

c. FTD: Up 1% or more on an
increase in volume (doesn’t
need to be above average
vol.)
 What to do now?

• Stay engaged with market

• Don’t predict; just interpret what is happening
• Don’t try to pick a bottom
• ‘Oversold’ can become more ‘oversold’
• Don’t revenge trade
• Wait for a Follow Through Day
Nasdaq - Daily Looking for min +1% gain on Day 4 or
later w/increase in Volume from
previous day

We are on Day #6

Rally in effect until Rally

day low is undercut
First ‘Up’
Rally Day
General Market

1. What were the Signs? (Near Term Top)

2. Follow Through Day Concept
3. Audience Stock Tickers