Step Five 3.1.17


EOM Garden Growing Prep:   Step Five  3.1.17   

Market risk is like taking a plunge into a cool pool….a lot of people are finding out right now what their risk tolerance is.  
                                                                                  William Bernstein      

The DOW closed above 21K and the SPX hit 2400. When asked why not just jump in at these levels, I resort back to today’s quote. I have seen ZERO successful long-term SPX trades when entering above the 5 SMA.     DOE                                                                                                        

Step Five

We allocate amounts/prices/shares of the VIP Closed-End Funds (BA 3) on the worksheet. In this part of the training, I analyze each candidate, extrapolate the number of shares purchased with an estimated target price then determine my alert conditions.   A sample will be available this weekend in the Members Vault.

Key Points on GGN…

1.   Pays a monthly dividend
2.   Has dropped the monthly paid amount paid for Q1 2017
3.   In the last two years, GGN has dropped 47%, 14.9%, and 25%
4.   Since my goal is share appreciation for the next seven years, I only want to           buy after a price drop then only with a weekly SS Buy Signal, confirmed with a      daily SS Buy Signal
5.   I plan to buy incrementally and budget $500 for each
 
Action Points for Setting Alerts…

1.   Price drops down to the 6 SMA
2.   MACD Histogram/CMF crosses under zero
3.   RSI closes under 30
4.   Slow Stochastics crosses under 20

Per my DOE Sample worksheet, since no one knows the exact price when the Simple Simon Buy Signal hits, I extrapolated a targeted $5.00 entry price.

This would give 100 shares. Any unused funds are swept into the Round Two (R2) allocation for future opportunities

We will now wait to see which alarms hit first. When hit, we will monitor until a Simple Simon Weekly, and Daily Buy Signal is generated before buying. 

For those wanting to be all in simply allocate all 1K.

If having problems downloading the “ES Allocation Worksheet” (Members Vault), you may need to click on the “Enable Editing” button in your MS Office application to access the editable “Landscape” format. It should look the same as the PDF version.

When we near the end of this series, I plan to offer an “in-person” seminar to further explain the procedure and answer all question. Since my EOM Members are located from Seattle to Florida, I am working to offer it online with only a few day delay. The location-seminar details will be finalized soon.     

When my analysis is complete, I plan to compile all steps into a single PDF document, available exclusively to EOM Members.

If you have questions, please send them to me at eyeonthemarket@outlook.com.

Enjoy your evening,

David O. England

In full disclosure; I own shares of GGN in a current Garden Growing account. DOE

Plan your work, work your plan, and share your harvest! 1 Timothy 2:1-2

This information is for Educational purposes only. It shall in no event be construed or interpreted as an offer or recommendation to buy or sell securities of any kind.

DAVID O. ENGLAND is the founder of the Eye on the Market-Training Academy and Associate Professor Emeritus of Finance. This column is presented for educational purposes only and not intended as financial advice.

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