Note. Dates are Fridays.
Prices are Monday openings.

---

THE TWO TOP-RANKED of 36 stocks in the portfolio appear in the table. Profits are taken two weeks after purchase. The %P/L column shows the gains for each. The average profit for both is +8.8%.

Why were they bought on the date of purchase? Because of the divergence of the positive Money Flow trend from the negative price trend (the green lines in the chart below--or, to open a separate window (click here). The boxes are prices. The dashes are Money Flows.

Note the Money Flow low on 8/19/2011 and the price low on same date. Five weeks later price made a new low; Money Flow did not. That's a divergence setup. Next, wait for an action signal. That will be the first rise in either the price or the Money Flow. It is not long in coming. The price rises on 9/30/2011, the week following the low. Buy.

Extensive back-testing shows that buying two stocks at tops is better than just one. That is why it is the most typical number of holdings in most systems on this website. Two shows greater profitability than any other buying combination.

When to sell? These are quick trades. In and out. Fast money. Two weeks tested better than any other short-term holding period. 8.8% is equalized to 220% per year annualized. If the trades are done using call options, the profits are between +50% and +100% in two weeks.

The point here is to act, especially when something noteworthy occurs. Two trends parallel tracking each other is not noteworthy. One trend breaking away from the path of the other is. Act.

Each week ask the question--is one trend now diverging from the other? If yes, prepare to act.

MONEY FLOWS--3 STOCK PORTFOLIOS

---

~Copernicus
November 11, 2011

Back | Subscribe

---

_MFFLOWS-11-4-20111 © 2011 The 2000 Corporation. All Rights Reserved.