A Process of Scanning Groups | Technically Speaking: Trading the Trend

[Music] [Music] hello and welcome to technically speaking on trading the trend weeks to months my name is james boyd alongside with me is my good friend mike fairborn and we'd like to welcome kathy meddy scott dom seattle michelle jill walter uh janita eddie and many others good afternoon to you happy thursday we thought we'd call thursday trend thursday now this class is really focusing on trading the trend weeks to months but we also want to kind of keep in mind is are all trans bullish or no uh some trends sideways some trends actually down and we're actually going to kind of talk about that as we bring up examples here today now remember that you can actually follow us on twitter we do post educational content there daily some of the things we actually show like i did today they're kind of more funny kind of showed it when i was a pig farmer growing up with my father so just real quick as we're getting started check that out as well if you want to kind of get educational content updates and also some personal pics as well just real quick also remember that with what we discussed here today isn't intended for educational informational purposes only not investment advice recommendation of any security strategy or account type options are not suitable for all investors and also when we talk about uh demonstrating the function of the platform we're going to use actual symbols though td ameritrade does not make any recommendations determine suitability of any security or strategy for individual traders it's up to the that investor's decision to make their self-directed account for themselves to make that's their responsibility when they choose potential investments for themselves also remember that when we uh talk about paper money trading is it is for educational purposes only and last but not least remember the option greeks now today what we're really going to be focusing on is we're going to really be talking about the the main objective we want to talk about today is top-down analysis okay and i'll tell you why we're going to talk about that in just a moment but that's our major focus top-down analysis as we talk about that what we're going to be showing is examples of bullish neutral trends but also perhaps bearish trends okay now as we go through our agenda items will be we'll take a quick look at the market view then we're going to actually spend the time in top down analysis and kind of talk about some of the tools that we have on the platform and then we're going to talk about example trades of doing top-down analysis whether those are bullish examples or bearish so let's go ahead here and uh hop right in so first off i want to kind of just take a quick look at the dow you know the dow had really or has been one of the stronger indexes okay and if you actually take a look at the doubt it's down about 430 points and as i was kind of sitting here kind of getting started for this session i couldn't help but notice that when we actually have up days like those four days or these up days those two days man this year if we go back to where this year started about right there most of the updates that we've actually had have been there's two days there's four days matter of fact if you go back there's two more days there's two days there's one day so right now for this year in 2022 bulls cannot put really higher highs in with sustained higher lows the key word is yet most of what we've been seeing is price action below the 30 and even price action below the 10. so when we talk here today we're going to kind of probably see examples of bearish trends now when we talk about trading the trend weeks to months someone is actually making kind of an idea that maybe that trend might continue into the future and that's important for you to understand this is not short-term trading we're looking out in time and thinking could that trend continue now if you actually take a look at the s p just briefly the s p still struggling to get up above its 10 period moving average and i want to give you a reminder since we're talking about trading the trend weeks to months when you go back and look at the daily and go to the three year weekly chart these charts on an intermediate basis to longer term basis are still showing a moving average crossover to the downside now i don't get any pleasure in saying that okay but the goal of a technician is to look at the charts and really not be biased based upon what the investor has in their own portfolio you know what i mean right you want it to do this but the chart is showing something different and you'll notice that same look on the nasdaq so in today we're going to kind of maybe bring up at least one or two bearish examples because when you look at the these trends intermediate to longer term on the spx and the nasdaq those are actually starting to show weakness a lower low and a lower high okay now let's kind of go to agenda item really number two okay now what i want to kind of do is let me actually just bring up a quick sheet of paper if i can and let me grab something i'm going to bring it up right here so first off i want to kind of look at is you know when you actually kind of talk about top-down analysis i think people talk about it but i want to kind of talk about the process of it okay and i want to kind of talk about a routine so when we actually talk about for example doing top-down analysis i want to kind of just draw an upside down triangle and so what we just did is we kind of looked at the top part of that and i'm going to label m for the market okay when we actually look at the market we would actually kind of say there's a lot of flat to maybe down okay now when we talk about top-down analysis the next layer in this triangle is really now getting into the sector which we're going to talk about and then below the sector you're going to get to what we call ig we'll label that as industry group and then below that what you're going to notice is now we're talking about stocks okay so we talked about the market already i'm going to now bring up an example of the sector let me kind of just draw this out so there's no confusion with stock sector and i want to kind of show you something i think there's been a kind of a problem lately and so let me bring up an example such as okay uh a sector like ixb now ixb is really the basic material sector okay and if you look at this you're going to see that the trend if i said what's the trend in the last month i think many of us might say james the trend kind of looks sideways and i would i would agree with you i'd say the trend is sideways now here's the problem though if you look at the sector the sectors are the easiest way to kind of get a gist as far as what the neighborhoods are doing the problem is the sector doesn't completely tell the whole story okay if the sector is flat does that mean that all industry groups are flat yes or no if i looked at the sector does that mean that all industry groups are flat matter of fact let me go back one step if we actually looked at let's say the dow jones if we said the dow jones in the last month is flat doesn't mean all in all sectors are flat does it mean all industry groups are flat no and even if the index and the sector is flat doesn't mean that there's not any sectors or industry groups that are going down i like to think of it like this okay let's imagine in america there's a lot of middle class there you go does it mean that there's not wealthy or ultra wealthy people doesn't mean there's not poor and ultra poor so sometimes when the indexes or the sections are going flat middle class that doesn't mean that there's not things trending up and or down the goal of an investor typically is to find the more dominant trends up or find the dominant trends down now i want to kind of bring up something just real quick is well not yet but if i look at this if we go on the left hand side and if we click a watch list okay i'm on the thinkorswim platform if we go down to where it says public okay in there you're gonna see that if i go down to let's say let me actually see where it is if you go by industry if we actually said look we want to look at them in let's say index excuse me industry groups you can look and see the industry groups the issue is it's not very helpful as far as actually how it's kind of in terms of a list form if you want to screen the list from an industry your perspective now if we also kind of go back and we actually said hey if i looked at public art or w and go sectors and industries you're just gonna get a big long list and it keeps going and it keeps going and there's 238 industry groups okay and it's kind of hard when you actually look at that to filter that list to do the process of top-down analysis would you guys and gals agree with me so the problem that we actually have is investors might say i like top down and when we look at the indexes and the sectors many might be flat but how do we actually find the areas from a sector but i want to go into now the industry groups how do you actually find the industries that are really trending okay now if we take a look at this right on my twitter page okay right at the very top you're gonna see that earlier today about an hour ago if you want to take for example make a list of industry groups break them down so we're not looking at so many at a time i actually broke those down i kind of copied and pasted well i did copy and paste and then i kind of put them in four list uh so we're not having to look at so many at a time so let me kind of show you how you put this on and then we're gonna talk about how to screen it and then we're gonna look at kind of where the strength is and where it's not okay so what i'm going to do is i'm going to kind of take this now if you've never done this before i want to kind of take a nice pace here so this is on my twitter about an hour ago you'll see this it says industry groups per the toss platform okay i'm going to copy that and now what i'm going to do is i'm going to bring back up the platform and if we go to the very top right the gear it's going to say open shared item so what i'm now going to do is i'm going to actually click on that open shared item and say let's copy and paste that uh watch list now this remember all my tweet i said this is not my watch list this is really these industry groups by the way it's labeled as sectors and industry groups you'll see why but if we do that i'm just now going to bring up i'm going to say preview this and it automatically comes up as listen industry groups number one how nice okay now if we now say import this now what we do is we get a little list and now it says industry groups okay so now we can kind of just maximize that out now what you'll notice is this is what we're used to we're used to seeing it like this and now what you're going to notice is the symbol which is not very helpful okay i mean who in essence wants to kind of remember dollar sign s p 500 uh number sign 10 10 okay that's not very typically helpful okay but if you put the description on then you could actually see which neighborhoods okay are really kind of performing more strongly okay how do you do that well let's say the investor said james i want to look at the relative strength over the last 21 days okay i'm just gonna only look at one time period let's say we want to look over the last month and i want to kind of see which neighborhoods are showing stronger now remember darker green just means they're outperforming the s p by quite a bit if we actually looked at let's say the lighter green that's actually outperforming the s p by quite a bit but not as much as the darker green and that gray color in line with the s p lighter color well red lighter red well underperforming and the burgundy red underperforming by quite a bit that's the colors you don't need to know what the numbers mean that that is just kind of creating the color okay now what i want to kind of do is i want to take a quick timeout and are there any questions okay so first off if someone asks me the question james where did you get the list again so if i go to write to for example uh james boyd on my twitter page and if we scroll down okay if i scroll down by the way and that that was that was for you and that that was for you okay speaking of a higher high i said and then for example if you actually go down to this so if you look at this and by the way if you said james could you just send me that out so i could actually see that let me do that i think that could be helpful and if you click on that link i just send you it should take you right to this okay and it's going to show you the four list okay so let me show one more time how undifficult it is to actually make a list so all we're going to do is we're just going to copy that now this is kind of nice because you can literally copy it okay and what i'm going to do is if someone said well how do you put how how do you actually put the platform on let me go back to there let me actually bring that back up so the link i sent you is this if we said can you show me one more time how to put that list on absolutely i'm going to copy and paste i'm going to bring back up the thinkorswim platform i'm going to go right to the gear okay when in doubt go to settings we click on the gear open shared item now you're going to see where it says oh just copy and paste it how many of you feel pretty strong that you can copy and paste well if i now click on preview it automatically comes up with what i labeled it as industry group number two you don't even have to type in the name it automatically should come up if i now say import it i get a little list and that little list now as i make this a little bit bigger so we can see it is now where did it go well now that's in the personal list okay so if i click on the drop down and i go to personal you're going to see that ah there's industry group one which we showed how to put that on industry group two now james you've in five minutes you could literally put these lists on in probably 60 seconds okay copy and paste and literally put them on okay matter of fact just to kind of prove a point and i i i'm just going to kind of show you this that it's really not that bad and when we do this i'm going to kind of show you how an investor could comb through the list preview import there it is okay last one click on the gear open shared item i need that last code i'm gonna actually copy and paste copy and paste and now here it is preview import there you got the four list okay did the same thing four times in a row if we actually look at this you're now going to see if we go to the market watch quote page in the personal list ah there's industry group one two three four now i want to kind of give you a quick heads up on this some of these are very very close together if you say james i feel like four lists is maybe a little too much you kind of might take out some of the industry groups you don't care about i saw example like publishing tobacco things like that i also saw hr uh companies not really interested you might be thinking the same thing so you can kind of take those out if you want okay does that make sense now if you had an industry group up now let me show you this last piece and this is important as far as working a list okay if you said for example i'm going to go over here to the three lines and i want to create the watch list okay what i'm now going to do is i'm going to click on that create watch list and i'm going to say webcast example okay now why why are you doing that okay i clicked on the three lines said create watchlist because what happens is when you're looking at these you might say certain industry groups stand out to you okay so if you said hey james when i'm looking at for example if i go back to the list now okay let's say industry group number one if you said james the one that's kind of standing out to me is oil oil and gas drilling you could actually right click on that and say just add that to the watch list well what watchlist well we just called it webcast example yeah that's all you got to do right click on it add go to webcast example okay so here we go so this is kind of showing you the process it's as far as kind of having a list working the list okay so now if i if the investor said james i actually looked at these and i did this myself okay so i'm not asking you to do something i didn't do already today and the other day when i think about looking at the mark in the sectors i would think about that as far as a potential routine daily if i think about industry groups as far as a routine i'd be thinking about maybe like on a weekend saturday sunday and maybe wednesday the industry groups are not going to change as much but staying on top as far as which industry groups are doing strong makes sense now let me actually kind of see just real quick uh aka moto i don't see the end of your question okay okay now the comment was do you have to copy the script for the trend and or the rs21 if you would like certain column headings to be here yes uh now by the way i i haven't checked it with another computer that automatically might come up but if you ever wanted to kind of add some of the column headings to the list yourself how do you do that you know if you already have some of the scripts yourself you can right click on the column heading and just customize okay i normally don't take 10 minutes and talk about watch lists in the process but i think this is important okay if the investor said james i went through these through these industry groups and i plot a couple now remember we kind of said we could actually right click and add okay and just put them in a smaller list so let me kind of show you a quick example okay of what that might look like for an investor now i label this as example industry group what i need to make sure that you know okay is if you click on right here to the right hand side there's a chain please do not think that you've got to type in the symbols please don't think that if you click on the chain okay you go to number one and if you go to the charts you're also gonna see a chain change click the chain and go to number one so if we had a second monitor okay we could grab the list over to the right monitor and just click on the down button and that is going to massively allow someone to flick through those screens if they want to visually see the charts okay so that's how the paper money account did it okay now what i'm going to do is i'm going to show some examples i want to kind of focus just briefly on gold just briefly and i want to kind of show another example of once you kind of see that hey james this has actually been a stronger sub uh an industry group you're going to see it's showing a potential hold weekly returns is positive trend is actually showing the number three which is really higher high high or low and the relative strength has been in one of the stronger pockets of industry groups okay now if i did this if i went back to the charts and said let me see what it looks like see since i clicked on the list when i pull up the chart it's automatically there so that's remember how we did that we click on on that little chain right there go to number one it's syncing those together okay now i want to show you this one last piece before we actually start well putting on some traits which is agenda item number three if we wanted to if i said james i don't know what stocks are in there remember what we did last two weeks ago we went to where it says scan the nice thing about how you can work the platform with the industry groups is we can actually go to where it says scan in and once we actually go to scan in it will save my industry now if we said gold what what sector is that in now it's probably not going to be health care financials tech utilities real okay so you can kind of probably say i'm going to guess and actually save some materials and if we now look at this we're going to see metals and mining and now what you're going to see is we're going to now you could pick all metals of mining but if you want to nail that area let's say gold or precious materials there you go so i'm going to act like i don't know any of any of this i'm going to say select all metals and mining maybe i don't want to be so picky with gold so now if i do this the only thing that i'm going to focus on in two search criteria is the market price of the stock and the stock volume that's it now what it's doing is it's scanning in metals and mining okay there's the mark we're just saying look for any stocks greater than 25 and really a volume of greater than a million if we said scan this dang now what we're going to do is we're going to get a list of stocks that actually come back now remember we said when the investor gets a list of stocks back you also can put any of the scripts you want on example given if you said james i want one of those column headings example given to be maybe i'd like to see year to date okay why would someone want to see here today well maybe they're thinking that might show them trend okay and it's looking at percentage growth or loss let's show that so now what's going to happen is if i add that column and say look i want to see what stocks might be performing a little stronger and could the trend continue well you're going to see really ko is up 25 tech real so this now brings up the the point of our discussion here today when you look at the basic materials the sector we had an impression that there's nothing going up but that doesn't necessarily tell the truth because remember we said the sector could be like middle class but if i was middle class or you were middle class that doesn't mean there's guys like jeff bezos and actually warren buffett okay and the opposite of that so now we start drilling down in these industry groups we can kind of get a sense of where there is strength year-to-date percentage and then what type of trends they are three is actually saying higher highs and higher lows probably not at resistance four is actually saying above both moving averages higher highs and higher lows but could be up near a moving average so i'm going to kind of go back to this this nem just briefly and if i look at this and i type in nem okay okay okay so if we actually look at this here's any now i want to kind of just take a quick timeout what i'm really trying to hammer today is i'm trying to really hammer the process okay i i sense that when we look at the sector so far this year it's not really telling the force full story what's going on if someone's really trying to trade the trend weeks to months they might look at the sectors and say outside and really entertain your financials i don't really see any trends but when you actually dive down into the industry groups you actually see that's not quite true now we got over 20 minutes and i'm going to spend the next 20 minutes in just talking about our agenda item number three where we're talking about bullish and bearish trades are there any questions for you now i want to go back to hollywood chiropractic associates how do you how do we see the stocks in the industry group so let's go back to that let's show that real quick one more time and if we go to annual aunt not annualized scam okay so if i go to scan and it right below when we look at stock hacker what we're going to do is we're going to say scan in okay so if you look at your list of industry groups and say james i like metals and mining james i like farming and equipment james i like agriculture i like for example off fertilizer etc okay what you then can actually do is go to scan and go right down into for example where it says industry group and you could say what we did is we went down to buy industry group materials and we said in this case medals of mining okay now james how how would you know which industry groups looked interesting well remember i kind of showed you how to sync the chart and you could a visually look at the graph or two you might say james could i maybe look at year-to-date returns to see potential trends yeah we just showed that could we maybe look at a column heading like trend to kind of see which stocks could potentially be trending yeah could we also look at relative strength to see what stocks might be trending as well so guys and gals there's not only one answer the investor could use one of the three three one of those three tools or all of them to see which ones are trending or not trending okay now let's kind of now talk about trade examples i want to go back to nem so let's say the investor they're trying to trade the trend weeks to months okay now one of the questions from kevin is why use the rs21 to pick the best performing stocks in the interview why not use rs 10 or 42. so look uh the reason why i so sometimes so kevin sometimes as an educator if you show more it uh people pick it up less if you said james i'm on the same page as you there's nothing wrong with having the 10 21 and 42. if more for you is

more then there's nothing wrong with actually looking at different lengths or duration of relative strength to confirm that okay but if you said james i'm more brand new showing me more is not more it's less then that's why i chose just showing one okay so kevin i'm with you if this was kind of my screen i you know like i've showed before i don't mind having more relative strength columns to kind of see is that relative strength not just been over the last month but has it been over different time periods as well shorter term intermediate longer term etc i can understand that if you can too then that's why the investor might add that or consider that okay now let's kind of go back to this and what i'm going to do is let's kind of take a look at a trade example on nem now when you take a look at nem we actually see that when you take a look at let's say gold price now ray's talked about this okay so let's kind of by the way ray is a dallas cowboy fan right right okay no he's not he's a seattle seahawk fan i just got to do that because uh ray's a good man if you've never met ray and his wife good people okay anus and his uh grandson as well so just real quick if we actually take a look at this there's the spot price of gold for the april delivery now if you take a look at this what i want to kind of notice is if those prices go off of gold the idea is could maybe let's say the trend continue on nem now there is upcoming earnings on this and we see those earnings about right there on 224 okay so we're talking about in the next week or so earnings now let's say the investor said james i maybe don't want to maybe just uh you know in this case buy the stock outright okay maybe they don't maybe they just want to maybe sell something okay so on the on the left-hand side we got calls right hand side we got puts and if we actually take a look at this if the investor said james i really just kind of want to sell something with the potential obligation okay with the obligation for the potential to buy the stock at the strike price okay now if you take a look at this what i want you to notice is if the investor sold the put only it's a dollar 88 premium at the bid if the investor got maybe somewhere in the middle they might be thinking let's say a dollar ninety two dollar ninety three somewhere in there that strike has the 35 delta if the investor sold the put only okay they're really saying i don't mind to buy the shares from now until expiration assignment can occur could prior to expiration okay that just means the investor bought the shares prior to the expiration but that still would mean that the investor would be able to realize all of the premium if that assignment were to happen earlier okay now if you take a look at this if the investor is on the hook to buy the stock at 65 but they collect a dollar 87 if we confirm and send it's going to give us the break even so that stock is at 67.53 the stock can go down somewhat the maximum profit per contract is 187. 6 300 because if the stock were to go to zero and the commission of 65 cents because it's one contract now if the investor said and i'm gonna focus on the margin account here okay if the investor said you know in the margin account they could really do one contract which is true because in the margin of contract margin account it could really do about eight or ten thousand dollars worth of a stock position but on that bigger dollar account i'm gonna do about four okay now now ray your grandson mason correct do i remember that right mason let me know okay because i'm thinking about that i just want to make sure selling one in the margin selling four in the ira now if the paperwork account were to do this it now adjusts the profit and the loss okay now if you take a look if the investor were to send this it fills now here's the one thing is i want to kind of go back to the trend of the market just super briefly if you kind of take a look at the trend of the market we would actually kind of say the trend of the market if we went back let's say six months or so i think we would say at best it's been sideways i think there's been a moment where it went off but if we kind of went back we probably really say in this case it's sideways so if the trends are not necessarily up how as an investor are you changing the strategy do you just keep going the same bullish stock all the time you might consider a cover call if the stock were to go sideways might you consider cash secureport to buy the stock if the stock were to pull back but then have maybe a little bit of a a little kind of a downside protection just a little bit or be able to buy the stock at a potential discount from where it is now so i think this is important to kind of understand that the trends are not super bullish at least in the indexes now if we were to kind of take a look at let's say another example let's go back to the market watch and let's say when we actually look at a list so we talked about gold right uh yesterday i i i kind of brought up the example of debit energy okay if you bring up let's say that what you're going to notice is dbn not all energy stocks are doing the same thing and that's what's kind of nice to see the difference between one industry group versus the other when you take a look at let's say the industry group such as let's pull it back up oil and gas equipment services that was actually one of the stronger ones in that area now what i'm going to do is if we actually go down and say well let's look at airlines some of you had questions on that yesterday if we look at airlines what does it look like well kind of yesterday was up today down a little bit but maybe still trying to reverse still above the 10 period moving average if we go back to that list okay if we looked at railroads okay let's imagine we brought this up and we say what is railroad roads doing well railroads has kind of it's been up recently flat a little bit maybe chiseling out a support area right around let's say 29.82

recently kind of breaking the downward diagonal slant one of the few industry groups that might kind of be getting above its maybe 10 period moving average now i want to kind of show you this just briefly if you said you know what i'm kind of like kevin i can handle seeing more columns what i want you to notice is and let me see if i can't look at this and grab this but if you said james when we actually look at this as far as an industry group list can we see which stocks maybe have coho close above the high the low days sure just like a stock list could we see for example which industry groups are making a 20 and a 55 day high sure which ones are they well we already brought up the one it's gold and it's metals and mining hey james i was kind of wondering if we could see which moving averages crossed over on a daily chart ah right there which ones are those it's construction and engineering james i want to kind of see which ones maybe cross over in the last couple days ah right there oil and gas drilling crossed over x means crossed over and it crossed over two days ago these aren't guaranteed for accuracy but they could actually be very helpful as far as really being able to filter the list okay if you like bounces maybe a kohl column if you say james i like potential breakouts 20 55 day high if you like moving average crossovers in a whole list you see that there's probably about three of them okay on this list if i said well how long would it take me to realize if there's any other colds on any of the other lists well go forward and now if we look at that there's no moving average crossover there there's wow two moving averages cross over there that's on computer electronics and healthcare nope that's healthcare equipment and the next one if we say we like the investor likes moving average crossovers one two technology hardware and electronic components the investor actually never looked at any of the charts but they actually had the scripts filter those out okay so it's kind of helpful okay but remember not everyone maybe wants to take a potentially faster way maybe they want to kind of take the long way around okay now if we actually went back to this i want to kind of show an example of one more bullish example and then i want to kind of take a look at a bearish example now remember we were talking about railroads okay and let's kind of imagine the investor said i i don't really know how to find those railroad stocks well if i went back to scan and i said scan in and we went to buy industry now notice that this does not have an area where it says transportation so if you're ever thinking about transportation just think in this street excuse me industry group of industrials okay transportation industrials industrial transportation and what you'll notice is the transportation is tucked away inside the industrials and what you'll notice is we can find road and rail here or in the transportation same thing uh well actually not road and rail is actually classified underneath industrials let's say we said i don't know i want to pick all of them okay if i click on all of them or just click on i want to nail railroads we can't if you said nail hit railroads if we now say run this scan this and say what do we got all of a sudden we actually got three stocks csx which actually had a dividend bump actually canadian pacific kennedy and then what you're now going to see is ump okay now i'm going to go to ump now if we look at a stock for example like ump and say what do we see on the trend here now as someone who's trying to trade the trend weeks to months do you just look at a weekly do you just look at a one year daily chart not necessarily i think it wouldn't be bad to say look can we go back and look at maybe a three year weekly and kind of see what's the what's the trend here okay now remember in this class we're kind of big on seeing relative strength okay so one way we could actually kind of see the relative strength let's actually click on the little test tube and we could actually just type in relative strength okay now i'm not really sure at least on this paid money uh account if it's actually going to give me what i want to see um kind of stinks when you work on different computers but if i looked at uh let me see what it comes up with there we go now here's what it is it's it's it's a it's really locked down for the s p so we'll look at it but just know that kind of the one we kind of talked about there's a way to kind of customize what length of time it's looking at if we said let's look at the relative strength of ump compared to the s p now what you're going to notice is let's go apply and then okay now what you're now going to notice is you can actually kind of see what's the benchmark and then actually the performance okay now what you're gonna see in this case is the s p okay if we actually take a look at this the the red line again is the benchmark and the green line is really showing in this case that the performance is really going more in line with the benchmark so sometimes investor always asks the question let me kind of show this really in a different way to kind of show you the difference what's a stock that's been really strong let me actually pick a stock uh i'm gonna think of one that's been really strong let me go american express okay there you go so the green line is american express okay the the red line is the benchmark so when i go back to ump what you're going to notice is james the green line is really ump this stock historically has been showing that it's been underperforming the red line the benchmark of the s p why on earth would an investor look for something that's maybe coming more in line with the s p well they might be thinking that maybe it might be it might have historically been underperforming but maybe might it start to perform in line with the s p or maybe outperform the investor does not always have to look for things that are hitting brand new highs compared to the s p this is where the investor might say james i'm starting to see something that's performing stronger or maybe coming up closer to the benchmark of the s p so don't think you always have to find something that's had a history of outperforming some investors look for something that's been down and maybe starting to get closer to the benchmark okay now let's say the investor looked at this and said james i kind of see like an awkward trend higher highs over time a recent resistance area that turned into overtime new potential support they look at this chart and say you know what james it's a 251 dollar stock this one might be a little bit more expensive for some if we look at this there is an upcoming dividend and what you're going to notice is that support is probably even a little higher and that support level is probably right there about 237. let me mark that so we can see where that is now wonder if the investor said james i really don't want to buy the shares they're pretty expensive could the investor maybe do like a a long vertical long call vertical on it well remember a long call vertical is the right to buy the shares the strike price and then by selling the call above it or higher that is really creating a credit to lower the debit and the break-even let's show that example so if the investor said look let's right click on that 740 for the march expiration go to where it says buy go right to where it says vertica and if we actually did that it's really going to be doing the 250 the 255. so wonder if actually someone sees the industry group pulls up the stocks and says dead government the stocks are expensive well just know that there's other ways to kind of play that trend one way is not to buy the shares they could actually do a long call vertical buying the lower strike and selling the higher strike looks very cover call like but just doesn't have the shares what you're going to notice is the debit is the most the investor is that's what that's what they could lose on the options it's five dollar spread with and the max profit 245. so when you take a look at this this is where the investor is saying look i just want to try to grab a piece of that trend note where they need also the trade to break even okay as well stocks at 251 and change the break even as of the march expiration is at 2 52 55 note also the commission now what i want to do is i got about let's take about questions for just two three minutes are there any questions that we can answer here i'm just trying to show you the process of how an investor can find examples from drilling down because remember when you look at market and sector especially right now i think they're showing you flat to maybe down and i think it's harder to really see what's moving but if for example we actually look in the industry group and we can grab those four lists right off my twitter page that are really kind of the broken down list from or the broken down list from the thinkorswim platform we could kind of comb through that list now james one thing you that you did not hit here yet is when someone does top down does someone for example always have to be looking bullish oh absolutely not you'll see that example given i threw on let's say apparel retail and if you look at a pair of retail that might be an area that for example is breaking support the investor might say hey james could the investor be looking at let's say stocks that are going down in a pair of retail the answer is yeah it would just be doing the exact same scan and looking at those stocks in the discretionary space in the industry group of retail okay so you know a lot of times when people talk about how do you really invest maybe the process of how to filter is never really discussed that much okay the purpose of this today is to kind of really say we want to talk about the process by having these four lists that are really just a broken down version okay of the thinkorswim platform okay of their their industry groups it allows the investors to screen lists by scripts that are not guaranteed for accuracy but can be helpful okay and those scripts can be customized to your liking when the investor actually looks at the trends by year-to-date return example given maybe they're going to look at the trend column or maybe they're going to look at relative strength either of those or all of them can be a helpful way to see a bullish trend a neutral trend or maybe even a trend that's down okay and so just kind of know there's you can kind of pick which one interests you today what we actually did is we kind of showed examples of how to actually pull up the list work the list make that list a little smaller how to find stocks in those lists and then actually how to look at examples of actually putting example trades on that's what we really covered here today now i'm out of my time here today uh some of you are actually saying uh james you actually promised that jax would attend this session well this was jack's before the session jax okay he popped his head up jacks you're doing good okay so he wanted to make sure that i included him in my session yeah he's look he's looking now so some of you just want to make sure he's here he's here he's just uh he's poking his head above the little ledge right there so anyway we have a little fun with him he's a good guy he's a fellow co-worker so just a little fun there i know some of you have animals too and you love animals and so do i so i want to thank you so much for your comments your participation if you enjoyed today's session like it if you actually said hey i'd like to see other videos reach out and subscribe follow us okay on uh twitter or in in or on on youtube as well you can see all of our content also know that this has been recorded and also remember with what we discussed here today he was done for example illustrative purposes only stay tuned for our next webcast coming up right at the top top of the hour thank you thank michael fairborne as well for answering those questions in the chat as well yeah jack still needs to make an appearance i hope he doesn't make an appearance but if he busts through the door i i i'll probably have to give him a little pet because he just well he you know i'm his little buddy he calls me so all right have a great day take

2022-02-20 14:27

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