Step 2 3.31.17


EOM Garden II Prep:  Step 2  3.31.17

You don’t have to get in or out of a position all at once. Avoid the temptation of wanting to be completely right.                                              Jack Schwager

The need to be “right” instead of “profitable” wipes out many.            DOE
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Today we close out March and analyze the top All-Star A performer SMHD.
Step 12

Allocate amounts/prices/shares of SMHD from the All-Star A list (BA 1) 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 alert conditions.

Key Points on SMHD…
1.  Pays a high but (consistent) monthly dividend
2.  Every three months the dividend amount spikes-some of its holdings pay their dividend quarterly instead of monthly
3.  In the last two years, there have been two Simple Simon Buy Signals-see blue boxes
4. After each SS Buy Signal, there are runs of 94% and 40%
5. Since my Garden Growing goal is share appreciation 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
6. I plan to buy incrementally and budget $500 for each purchase

Action Points for Setting Alerts
1. Price closes over the 6 SMA
2. CMF crosses over zero
3. MACD Histogram crosses back over zero
4. RSI closes under 30
5. Slow Stochastics crosses under 20

When we receive a Simple Simon Buy Signal, then go to the daily chart and confirm another SS Buy Signal before buying.

Per my DOE Sample worksheet, since no one knows the exact price when the Simple Simon Buy Signal hits, I extrapolated an (R1) targeted $20.00 entry price.

This would give us 25 shares. Any unused funds are swept into the Round Two (R2) allocation for future opportunities.

We will wait to see if/which alarms hit. When hit, we will monitor until a Simple Simon Weekly, and SS 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 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.
Next week, we will analyze the “new” 2017 Q1 Dividend Fund Report and focus on the All-Star A and B candidates for our next Garden.

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

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.

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