Rachel Fox: Short-Term Trading Tips and Strategies with Chaikin Analytics

Great Summer Stock Finding Short-Term Performers with Chaikin Plays Analytics

Rachel Fox - creator FoxOnStocks.com Eric Chaikin - Chaikin Analytics

June 24, 2014

Welcome

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What We’ll Cover (Intros…) 1. What is the Chaikin approach? 2. How do I use Chaikin to find winning trades?

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Challenge: Information Overload

Solution

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The Solution: Chaikin Analytics

Chaikin Power Gauge Clear summary of a stock's potential – with a record of success

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Financials

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Earnings

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Technicals

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Experts

Chaikin Power Gauge

What is the Chaikin Power Gauge?

Clear summary of a stock's potential – with a record of success A reliable indication of a stock’s potential, with a history of success

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Very Bullish-to-Very Bearish rating

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Indicates likely relative performance over 1-to-6 months •

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Financials

20-factor quantitative model looks at: • Earnings Financials, Earnings, Technicals, Experts

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Covers 5,000 U.S. equities • Technicals

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12 years backtesting, 3 years real-world performance •

Experts

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Power Gauge Performance

Results thru Q1 2014

Russell 3000 - Large, Mid, & Small Cap stocks Period

Dates

Very Bullish stocks

Russell 3000 ETF

SPDR ETF

All Real-World Performance

Jan ’11 Mar ‘14

+20.70%

14.99%

15.01%

Last 12 Months

Apr ‘13 Mar ‘14

+34.29%

22.93%

22.21%

Jan ‘13 Dec ‘13

+49.59%

32.83%

32.13%

Jan ‘99 Mar ‘14

+22.28%

5.07%

4.64%

Year 2013

Life-To-Date (includes test period)

SP500

annual return

Very Bullish stocks are highly likely to outperform index benchmarks.

Annualized return by Rating group vs. benchmarks. Note: Test results are equal weighted; R3000 and SPDR ETF are capweighted. © 2014 Chaikin Analytics LLC. All Rights Reserved. Proprietary and Confidential.

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Play Offense Well: What to buy

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What to Buy: Classic Bulls Power Gauge Rating Bullish

• Price Trend Up • Relative Performance Strong • Chaikin Money Flow Strong • Buy Signal in Chaikin Analytics

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Play Good Defense Turn Land Mines into Gold Mines

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What to Sell: Classic Bears Power Gauge Rating Bearish

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Price Trend Down

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Relative Performance Weak

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Chaikin Money Flow Weak

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Sell Signal in Chaikin Analytics

Why I Love Chaikin Analytics • Can be added to any trading process • IS the missing puzzle piece of conﬁrma: on • Fits all styles: Growth, Value, Momentum, Long Term, Short Term

• Fits all levels: Beginners, Intermediates, Pro Traders

Rachelâ&#x20AC;&#x2122;s 4-Step Process

1. Find Strong Stocks in Strong Groups 2. Confirm Fundamentals & Technicals 3. Find the Carrots! (Buy/Sell Signals) 4. Identify Technical Patterns 15 ÂŠ 2013 Chaikin Analytics LLC. All Rights Reserved. Proprietary and Confidential.

My Process: Step 1 • Find heavily saturated industries: Highly bullish

Highly bearish

• Select based on likely market direc: on over next (1‐2 weeks)

My Process - Step 2 Loop through: Very Bullish stocks in strong industries (Longs) & Very Bearish stocks in weak industries (Shorts): Do the fundamentals confirm the technical trends? •

Analyst Estimate Revisions, Short Interest, Insider Activity

• Chaikin Analytics - great for finding strong fundamentals; •

it incorporates predictive factors:

My Process: Step 3 • •

Find the CARROT Of “Very Bullish” or “Very Bearish” stocks ﬁnd Buy/ Sell signals

That’s the Buy/Sell TODAY indicator. Gives me lower risk entry/exit point.

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Step 3: Buy/Sell Signals Focus on 2 types: 1. Overbought/Oversold Buys & Sells 2. Relative Strength Buys & Sells Overbought Sell – Finds Bearish stocks which are overextended rela: ve to their recent short‐term trading range. Oversold Buy – Finds Bullish stocks which have become Oversold rela: ve to their short‐term trading range. Rela<ve Strength Sell – Measures the stock’s performance rela: ve to the market as a whole. If the price has a risen but not as much as market, Chaikin will give a sell signal. Rela<ve Strength Buy ‐ Measures the stocks price rela: ve to the market as a whole. If the price has fallen but not as much as market, Chaikin will give a buy signal © 2013 Chaikin Analytics LLC. All Rights Reserved. Proprietary and Confidential.

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Step 4: Identify Patterns Technical Patterns 1. Consolidations 2. Reversals 3. Continuations Look for these in another intraday trading system ‐ complementary to Chaikin If the stock has been bullish for a while & Chaikin’s system shows there is a buying signal BUT there is a technical consolida: on pa\ ern forming, I’ll wait to see if the stocks next technical pa\ ern breaks higher or lower. © 2013 Chaikin Analytics LLC. All Rights Reserved. Proprietary and Confidential.

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Consolidations

Channel

Symmetrical Triangle

Ascending Triangle â&#x20AC;˘

Descending Triangle

If the stock breaks lower out of a consolida: on pa\ ern, my guess would be that a reversal pa\ ern is forming and I would NOT buy the stock. ÂŠ 2013 Chaikin Analytics LLC. All Rights Reserved. Proprietary and Confidential.

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Reversals

Double Top

Double Bottom

Multiple Top

Multiple Bottom

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Continuations

Bearish Pennant

Bullish Pennant

Bullish Flag

Bearish Flag •

If the Consolida: on pa\ ern breaks higher, then my guess would be a Con: nua: on pa\ ern is coming next. If I get conﬁrma: on of a Con: nua: on pa\ ern, I’ll move forward and buy the stock.

Wedge

Chaikin Analytics Demo

Let’s look at the system

24 ARilgl

Trades I Made with Chaikin

EL - Estee Lauder 3/11 (short) SGMA Sigma - 3/13 (long) CKH- Seacor 3/13 (short) N - NetSuite 4/3 (short)

- also

just shorted it today!

TFM - The Fresh Market 3/14 (short) HII - Huntington Int’l - 3/20 (long) - “personality change”

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