Step 10 REM 4.21.17


EOM Garden II Prep:  Step 10   REM 4.21.17

Successful traders always follow the line of least resistance. Always follow the trend. The trend is your friend.                                    Jesse Livermore

Although the indicators are showing weakness, the indexes continue to remain in a longer-term uptrend. Don’t be a hero-the trend is our friend.       DOE                 

Today is options expiration.  During the previous March expiration, SPX failed to break above the trendline-see blue box.  Will it repeat? 

We continue with the All-Star B-list candidates in our next Garden Growing application exercise.

Step 10

Allocate amounts/prices/shares of REM from the All-Star B list (BA 2) on the worksheet. In this phase of the training, I analyze each candidate, extrapolate the number of shares purchased with an estimated target price then determine alert conditions.

Key Points on REM

1.  Has an increasing dividend amount with a 9.23% spread
2.  The 1:4 reverse split technically skews the data
3.  Since my Garden Growing goal is “share growing” for the next seven years, I 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 purchase

Action Points for Setting Alerts

1.   Price closes under the 6 SMA
2.   CMF crosses under zero
3.   MACD Histogram crosses back under zero-it is there now
4.   RSI closes under 30
5.   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 an (R1) targeted $42.00 entry price.

This would give us 12 shares. Any unused funds are swept into the Round Two (R2) allocation for future opportunities.

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

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 eyeonthemarket@outlook.com.

On Monday, we evaluate the strength/weakness of each sector to see if the cracks are widening.  

Enjoy your weekend,

David O. England

 

 

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.

If you have a question or comment, contact David England at eyeonthemarket@outlook.com.

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