How to Screen Like an Investing Champion with Mark Minervini

[Laughter] I'm an old man though. You and me both. So our agenda, uh, we'll talk about the current market environment. Obviously, I know a lot of people will be curious about that. Uh, we will get very quickly how to build a custom screen using MarketSurge. Uh, spend a few minutes on that, just to kind of give you a quick overview. Then we'll go into, uh, Mark's routine, what, what does he like to screen for? And then last but not least, we'll highlight some of those screens, some of the most used screens in MarketSurge, and did they help you to identify, you know, some of the previous winners in in the current cycle as well as the past cycle.

Uh, a couple of housekeeping items. Uh, I apologize. I don't, I don't know how to turn off the hand-raise feature. So, uh, it's not that we're ignoring you, but the the hand-raise feature is not going to be used. I do have a handful of colleagues in the background, so the Q&A, if you have a question, you can type it in and, uh, we'll do our best to get to you. There are a lot of people on this webinar, so please give us a chance, uh, to, uh, to respond. And if not, we will give you some contact information for after. And this webinar is being recorded, so if you're on here live, great. You can, uh, revisit it if you'd like. If there's something that you weren't sure about or I'm curious about, like how did, how did Mark talk about that, you can go back and watch it. It'll be under investors.com/webinars in the video section and that'll get posted sometime later today. Uh, um, give us a chance to to drop that in.

Okay. So, let's get to the heart of the matter. At least probably what a lot of people are curious about is this market and Mark's thoughts on the market. Starting with this screenshot of the IBD50 index.

Yeah. So, Scott, this is a, you know, a market that has been interesting, you know, to say the least. And but it's classic. It's no different than, you know, we've gotten tons of questions in the last couple weeks and months that, you know, is this any different than before? Have you ever seen anything like this? Yeah, over and over and over again. It's really nothing really any different. I think this is a garden variety, uh, correction that could get worse. Um, we're very oversold now. You can easily get a snapback. We do have somewhat of a snapback rally, little snapback rally taking place. We'll see if you get a follow-through day, if you get an official follow-through day, but that's just one one piece of the puzzle. But real quick, I just wanted to sort of go through a chronology. For those who follow me on Twitter, I've I've posted many times along the way here what I've been doing when I went short the market and so forth. Um, we have something called the STEM model. It's a stock trading environment model. It's based basically what we do. It's it's it's not a mechanical model. It's subjective. So, it's based on our read of how breakouts are working and and and how many setups are developing and whether they're failing or not. And it basically it's red, yellow or green. Um, yellow is tradable but with caution. Green is what I call an easy dollar all out. You know, trade very aggressively. And red is be very, very cautious, very selective. You don't have to not trade at all, but you definitely want to have the smaller positions, more diversified, less exposure, and tighter stops and very quick to move the cash if things move against you. That's what we're in now. So, this is when it changed to that the most recent change. And there was that break that happened you see in the in the IBD50, uh, just prior to it. No, just prior actually. Um, yeah, and that we were starting to see some setups there and then it the IBD50 sort of broke apart and we saw a lot of stocks breaking apart and then we had that little rally back. It wasn't really helping the stocks repair. It was just showing broken names that were just having little snapback rallies. So we went on to that red and then we rolled over from there. But the thing I want to point out is a couple things. One, the IBD50 was showing the type of names that those are are on this call, most likely 90% are following more CAN SLIM type, uh, uh, rules and the type of rules that, you know, I use that are homogeneous with with CAN SLIM. There was a lot, a lot of signs already there, um, and just looking at the IBD50 alone, it wasn't acting right. A lot of stocks were breaking down. Since then, off the highs, we're down 30% or 29 point some odd percent off the highs. That's a bear market, you know, and 30% is a pretty big hit on an index like this. So, you probably, if you're in those type of stocks, you've been feeling some pain.

All right. And, uh, let's talk about the S&P using this chart of the, uh, the ETF SPY.

Okay. So, again, go back, going back to my tweets where I posted that I shorted the SPY, um, on the 24th, uh, the 24th of February. That was shorted after the STEM model rolled over. We started getting, we have another model called the Risk Model, and it's more, the STEM model is 25% of it, but the rest of it is all market related. So this is more of a market index type model, but it's on a shorter to intermediate term basis that started turning very negative. And when we see the stocks rolling over, and it's really an O'Neil type method, you know, the O'Neil method is a follow-through day, stock setups, you go in the market, you know, um, no stock setup, stocks are breaking down, distribution, you're out of the market. That's it. And it sounds easy, but it takes years to get the the expertise to read that correctly. And there's a lot of management in between. You know, things don't always go perfectly. Um, this time it went pretty perfectly. We got the stock started acting poorly. Then we got the the distribution in the indexes and we got the risk started to rise. The volatility rose. So I went short and with a very tight stop. It was just three days off the high. The stop was at at the high, um, and it never came near the stop. It just went right down.

So now I, the next thing is our longer term. We have a longer term model which I'll show you. Uh, yes. Yeah, this is purely mechanical and this is something that the components of this that make this up. This is very complex and I've been following these components and Ned Davis Research has been calculating these for me and going all the way back to the 1990s. Um, I was actually following the components of it in the '80s and then I became a customer of Ned Davis Research in the '90s and then, uh, they started calculating, uh, those those various individual components and then we put it into a model which is, uh, an allocation model that I used to supply to institutions and now our customers get this, uh, very long-term in nature. You only get signals on, you know, on once a year, once every couple years. If you go back to the 1990 buy signal, that was stayed in a buy signal all the way till 2000. So that's it was a 10-year buy signal. The the thing that I want to bring out today is that there's some, there's some reasons to be bullish short-term, but there's I would respect a sell signal on models like this that are longer term in nature with the long-term trend because there's also some longer term warning signs that I want to talk about today that there is the potential also for maybe a, you know, a bigger bear market than we think or or or something more severe. So, we want, we don't want to get caught with that because then when we're coming back into the market, if we're licking our wounds and coming out of losses, all we're doing is getting back to break even with all the gains that we make and we want to compound money, not mistakes, right? So, this model has just raised cash. I think you have another chart of that. Um, this started raising some cash. It was on a 100% buy signal, uh, since January, I believe it was January 13th of 2023. That goes back quite a bit. It was on a buy signal and it's still on a buy signal, but it's it ladders down. Once it goes to 100% invested, as it starts to deteriorate, it raises cash with the market. So, it just raised some cash. And so, and a couple of the components are right at the point where if the market goes down a little bit more, it's going to raise more cash. It's going to be almost 100% in cash by about 30, 25 to 33% in the market and mostly cash. And it will go to 100% cash too at some point. So that is kind of on the verge here. So we're sort of in a critical point at this point.

Now, on the shorter term basis, we recently just covered half of our short position. So that kind of goes against the the longer term model, but that was a shorter intermediate term trade and the market was heavily oversold and we saw sentiment getting very bearish. So, I covered half of it, but we'll see what happens. If this market starts acting, you know, not right, I might actually add that back. But here's what what I did, and this is what I do very often. Sometimes I'll short the the index when the market's rolling over. Then I cover some when it gets oversold, and then on the rally back, if if we see what we need to see on the upside, I start adding longs and I dilute the short. The short then becomes a hedge. And then one of the two will win. So, if and I, the way I'd like it to to pan out is I add longs. I dilute the short and then the short actually either stops me out at break even or I take a small loss and I'm loaded up with longs and the market is bottomed. If it doesn't, it goes the other way. I get stopped out of my longs because I'm usually only coming in with a smaller position. I'm not going right in there 100% invested. If it doesn't work out, I'm hedged somewhat. And now the market rolls over, I get stopped out of my longs. I still got something to hedge on. That's where I'm at right now. We, and I'll tell you the exact stocks in a minute if you want to share those that I recently bought and exactly where I bought them. We've just added some names. Um, let me see. I don't remember what the next chart is. So you have to bring it up and then it'll Okay, so this is the sentiment.

So see sentiment has gotten very, very, um, bearish, if you will, which is bullish from a contrarian standpoint. You can see we're down to bare market levels, but you can also see when we first rolled over into the bare market in 2022, that we were at these levels and then we went much lower and we had to get even more bearish sentiment. So, it doesn't mean just because you have the bearish sentiment that you necessarily are going to bottom. But, we do have enough bearish sentiment to certainly, um, foster a rally, to foster some kind of snapback. Right. Now, it's a matter of if we're going to actually put in a real bottom here and that's where we just turn to the stocks. You know, once, once the market gets oversold, the sentiment's real negative. If we get a follow-through day, we start seeing the indexes firming up. If the stocks are breaking out of bases, we start adding names. And then it's just whether they hold the stops or not. If they hold the stops, then we we we add. If they don't, then we we get knocked out of the market and we go back to cash. So, that's where we are right now. Um, let's see, what else do we have? Yep.

So, that's this is the problem. So, even if the market was were to bottom, and here's the problem about when a market when a market's bottoming, it's very volatile. It's whipping all over the place. And that's why you have to be very careful to not think about picking a low. Because if you're trying to pick a low, well, you're going right in the most volatile time. And while the indexes may bottom, you still may get chopped up with stocks whipping back and forth that are have not found their footing yet. And stocks aren't moving in earnest yet. Now, people think that O'Neil would just plow in there when there's a follow-through day. No. No. The follow-through day is one of the elements and then when you have the stock setups, you start adding them one by one. And if they're not working, you O'Neil would never be adding exposure. If if his first few games weren't working, it makes it's not you there's no intelligent reason for you to go to 50 or 100% invested if at 25% invested, you're losing money. You know, you you really got to be patient here and not get so locked into looking at the market indexes. Right now, if you're going to look at anything, look at volatility. When that volatility comes down, that's where and you see, look, we're running at bare market levels of volatility. If you look to the left where we had that nice rally from, yeah, not that far, but say from the rally in April, you know, July '23 all the way till, you know, maybe July of a year later. See how the basically, yeah, that whole rally where we had that lockout rally. We had very few pullbacks along the way, a 10% correction, but it was really a nice easy dollar environment. Look how the volatility is low through most of that period. Then when you get that high volatility, that's where you got to be careful because even if the indexes do well, the the average stock is whipping around and if you're using tight stops, you're going to get you're going to get knocked around and you're going to get losses because you're keeping the risk so tight. So right now is a time where you got to be careful because of the volatility. Um, so that this is the IBD, the IBD mutual fund index. This was like a canary in the coal mine. I pointed this out to my clients, I think it's 14 weeks ago now, that this big weekly close below the 200 to me was a major, major sign and I was really taking this very seriously and then when it couldn't rally and it just went sideways. These are some of the best mutual funds. There's really great mutual funds in the IBD mutual fund index. I think you still have Alger and those guys and, uh, yeah, Contra, Will Danos. Yeah, David Alger was one of my heroes. I know I learned a lot from David Alger and unfortunately he perished in the in 9/11, um, in the World Trade. Um, but, uh, his brother Fred, of course, um, I think still still runs Alger. I'm not sure. I haven't been in touch with that in so long, but they were they were real heroes of mine. They were just, they're great managers. Um, there's a whole bunch of, you know, funds in there and they're not doing well. You know, they're not doing well and the IBD then breaks down. So, this is really telling you the type of names that we would traffic in are under pressure and the real masking of it is because Nvidia and they're Nvidia and Google and those are starting to give away now. They're below the 200 day. They were still holding up and they were holding the indexes up because these, and I've been talking about this forever, even on these shows, the indexes are weighted, you know, 30, 40, 45% of the index is in 10, 15, 20 names. The S&P, I don't know, 25 names, I think, is like 30, 40% of the index. Don't quote me exactly, but a huge percentage of the index is just a a handful of NASDAQ names. So again, you have to look beneath the surface. You know, when you have that kind of market where everything's so weighted like that, the indexes aren't telling you the truth and you need to go to other indexes that are either maybe equally weighted and this is really the great, the areas that are really good to look for the type of stocks we would traffic in. This just goes and this is something O'Neil said and I learned many, many, many decades ago. Um, the the worst thing that a stock can do is break and not rally. The best thing a stock can do is break out and not pull back much. So that's why strength begets strength and weakness begets weakness. This broke hard and had a big week. That was the biggest week down since the bear market and it couldn't, it could not rally. It was just screaming that this and this is what I call a ledge. Um, a friend of mine, Lauren Feinsten, who used to write for IBD and then he went to Trading Markets. He wrote an article on this. We, it's probably can dig it up somewhere online where this about this ledge pattern and it's what I look for to short is when you break, you break below the 200, you just go straight sideways, you can't rally and then you start breaking down from there. So this of course broke down even more. It's down about, I think I think went down about 23, 25%. So again, bare market levels here, you know, so there's signs. There were signs here before we had this decline and I think it's still a little bit somewhat ominous right now. Let's see what else do we have.

Okay, so this is a little bit, this is what flies in the face and I know we're going kind of long here on the general market, but there's some pretty interesting things to look at here. This flies in the face of what the say the Investors Intelligence and the AI surveys are saying. This is another survey of expectations for stock prices. And this now this is one that is telling us that there, there's a lot of expectation for stocks going forward to have an increase in stock prices. And if you move to the next slide, that's the one that's really important. Um, and again, this is, um, this is as of 12/31. So this is quarterly data, so it's not updated recently, but as of the end of the year, we had the a record level of stocks being held in households and and this has been going up over years. You see the trend from the 1950s is definitely higher highs. Well, let's even assume that they can this can go even higher. Well, okay, 100% would be fully invested, every household in in in America. We're up there at 50%. So, so we're definitely, there's a lot of supply out there. So, so there is the potential for large declines and and I'm not saying get bearish, don't buy stocks. If they set up, you buy them because the party, they might not pull the punch bowl away for a long time. But when they do and you see those signs, you need to run for cover. You need to not say, "Oh, it'll come back. It's Nvidia." And start buying these stocks because they're down, because you may end up in another situation like we ended up in 2000 where you go 20 years before the leaders come back. Microsoft took 20 years. GE, I don't, I don't think GE is back to the old highs yet. You're right. Yeah. You can go for a long, long time and maybe they won't go out of business, but maybe you're in your 60s like me and you'll need the money and you and you won't have it then when you need it most because you're in a big bear market and it's taken 5 years or 10 years or two decades to to come back. So th this, you know, this is sort of the landscape. This is the way I'm playing it. Um, I don't know if we have any other slides, but I certainly, I think there might be one more.

Yeah, that's just another look at, you know, stocks as a percentage of stocks, bonds, and cash. Again, a lot of ownership, a lot of stock ownership, and this has been rising and maybe it goes even higher, but I don't think you, I think if you got into the 60%, 65%, you would be at absolute nosebleed levels and would be probably a prerequisite to not a very nice market going forward. Um, so I think it's something to to you be mindful of. But if you want to go over some individual stocks too, I don't, if you want to wait for later, we can do that.

Pull up. Let me see. Can you see my, uh, MarketSurge chart? I can. Yes. Okay. So, let's start with, uh, some stocks that you mentioned. Do you want daily or weekly charts? Daily is fine. Yep. Okay. Entered this three days ago. NWA. Yep. Just entered this three days ago right there. Big up move on earnings. Then it pulled back during this correction and then had another real nice up day. Two really big volume, uh, days on both of those up days and then tightened up real nicely. We just, we bought this three days ago as it was breaking out because this is one of the first stocks to emerge off the lows here. It's a potential leader going forward. Um, so this is one that we're in. I think we're, you know, most of the names we're in right now, we're up between five and 10%. So we don't have any really big gains yet. We just started putting sort of the toe in the water, you know.

So, this is, uh, Alignment Healthcare. I think you said 314 and we added that right in there, right there. Yep. We added that about four days ago and then we added to it, um, I believe, I think I gave you that. Let me see. You said 314 and 318, right? Yes. 314 and 318. Those are the two days I bought that. So, that's another one that held up really well. And you can see, see that big move on the earnings. It was up nice and big. Came back, a nice orderly pullback while the market was pulling back. And this is what we'll talk about later with screening. Look at that relative strength line. See, it just soared into new high ground because the stock is holding up while the market is correcting. And that's precisely what we want to see. And if you go back, you go all the way back to 1990 when when Bill O'Neil and David Ryan and myself were all buying Amgen. We're all buying US Surgical, we're all buying Ballad Medical Products, uh, uh, even Home Depot when they were a mid midcap company and nobody even hardly heard of them. This is what they looked like. They they all looked like this. They were the market was in correction and they had relative strength lines going into new highs. Most of them, 98, 99 RS, uh, numbers and RS lines going to new highs, breaking it, breaking out right off the lows.

All right, let's look at, uh, oops, a typo. Baba is another one you mentioned to me. So Baba is sort of a, a, you know, a turnaround or, you know, refocus. They and if you can see, you see the ants in there. So this, this showed some pretty powerful action. When you see the ants, you can see those on on the MarketSmith charts. That shows 12 out of 15 days up. That's something that David Ryan developed. Um, it just shows that there's some real power there and the fundamentals behind Baba are, they're making investments in AI right now. This is really an AI excitement over the stock, over the AI investment and bet that they're making and a company that is is probably, you know, relatively speaking to the other companies out there, they're undervalued to the street. I would, I would say, um, I don't buy value, but this is showing tremendous power. 98 relative strength coming out of what we would call a power play or, you know, high tight flagish. Um, very strong. We just actually bought a little bit of it today on the pullback as it started turning up. And if this breakout is for real, it should really hold up and it with maybe another day or two of pullback and it should be back on new high ground. And if this comes in, I'll just be out of it. I'm looking for this to work right away. If it doesn't work, I'll be out of it and be looking for maybe a re-entry.

Okay. All right. So, um, I think we, we had one more chart. Did you want to talk about margin debt at all or, or do you feel like you've, uh, Okay. Well, margin. Yeah, I made my point. I think on the on the on the longer term excess, you know, uh, froth, margin debt is also getting up there. But one thing I wanted to point out that's not in margin debt anymore are these leveraged ETFs. And I think margin debt might be understated. This is something that I talked about and was brought up by someone on Twitter that pointed it out and I, I thought that they were absolutely dead on, um, that margin debt, yes, we're seeing margin debt at levels that have in the past been frothy, but on top of that, you have all these triple ETFs and and products that don't even show up in this. So, I think it might be understated. So, we got to again, it's another sign that we're definitely in, you know, not in the early innings, maybe on a longer term basis.

Yeah, it's, it's different world than when we first started. If I wanted to be short, I had to sell short. Now I can buy the triple short Tesla ETF or something, right? Yeah. I still short the indexes because I like to be short when I'm short. People ask that all the time. Do you use the inverse? I short the SPY. I short the DIA. I short the Qs because I like to be short. I also don't like when you get into the the leverage, the triples, especially over time, they don't track. So if you're if you're just trading them very short term for a day or two, fine. But if you're going to hold them weeks or months, they're they don't, they they lose their tracking. And we saw there was a a while back we saw decoupling of some of these and everything went kind of haywire. So there is some additional risk there. Yeah, I, I agree.

All right. So, uh, let's talk about screening and MarketSurge and we'll, we're going to, um, let me fit this fit my chart to screen here. Apologize. I don't know why it's not fitting to screen. It should not be, shouldn't be able to see the the this down below. So, um, um, it's it's a user error for sure. Let me, let me relaunch. Did you just, Yeah. Okay. I was going to say, did you just pull the tab up? Sometimes you just pull that tab up. I'm going to, Are you, Are you trying to get into the bottom screening? I want, I want my chart to fit the fit the screen and, uh, people are saying that it's not fit the screen. So, um, when in doubt, reboot. Yeah, exactly. We were trying, my team and I were developing our new software right now and we were we had this problem, this hiccup, and we're a week. It was driving five of my coders crazy. Guess what? Today, we realized it was on my computer. It was because I my batteries were low on my mouse. The mo we're checking all the code. I mean, I can't even, I don't even know how much money I spent paying everybody to check everything. And it was the my m my mouse was, uh, was low. Was it, was getting low on batteries and it caused this hiccup. I apologize. Hopefully you guys can see my screen pretty good.

So let's, let's open up the screener on the left-hand side of the chart. And if you want to build your own custom screen, some people want to. We have a lot of built-in screens, which we'll talk about with Mark, uh, in a moment here. But to build your own custom screen, you would just click new screen and new stock screen. And then you could just call it what you wanted. IPOs, EPS screen, etc. And then all the criteria you can screen for are in these categories right here. So, uh, if you wanted to screen for earnings, let's say quarterly earnings up 50% or more. Well, here's the quarterly earnings block. I want a minimum of 50%. I don't have to put in a max. The more the merrier. And boom, I can get 576 stocks have earnings last quarter up 50% or more. Uh, if I want to, uh, make sure that XYZ lost a penny, but now they've made 5 cents in the most recent quarter. Well, if I want to make sure I see that kind of absolute value, then you would just check this box, include stocks with negative comparison quarters, and you can see how quickly the number jumped by doing so. So, there's a lot of items you can do to screen, uh, from a custom standpoint. And then there's a lot of, uh, built-in screens, um, that we've, we've pre-built to try to make your life easier. And that's probably where we're going to go now.

So before we go there, uh, obviously the Mark, uh, MarketSurge is sponsoring this webinar, so to speak. We do have a special offer. We're in the middle of free access week. So a lot of you have free access to MarketSurge until Sunday, I believe. If you want to continue, we are offering you one month at $24.95. It's normally $150 a month, $149.95. So, $24.95 for a month. If you sign up today, because you are in the free access week, we want to make sure you don't lose that free access time. We're going to give you a bonus two weeks. So, if you sign up today, if your order is entered today, uh, 3/19, you you will automatically get six weeks for $24.95. You can call us 800-831-2525 or you can go to investors.com/webinaroffer to explore that offer.

All right, so Mark, let's talk about your routine. How did you find the Babas, the MWAs, the ALHC's of the world?

Yeah. Um, I'm going to pull up my MarketSurge and, um, you know, just could you, you guide me on on things that you like to look for? What are some things that you would do to generate ideas? So let me first say, I have been using MarketSurge in one shape or another through all the name changes and all the technology changes. I started with Daily Graphs that were a printed product and they would be mailed to you on the weekend and then you would have to imagine throughout the week where the price was and we used to just mark it in with a pen on the charts that we liked because they only came once a week and they would get FedEx on the weekend and then you got Daily Graphs online, then you got, uh, um, you got MarketSmith, um, then became MarketSurge and now it just is evolved and evolved and I've been through the whole thing so I've seen the whole thing. But the real interesting thing is that through all this, I'm still screening the same way as when I flipped the printed pages and just looked at them and bent the corner tab on the ones I liked. It's really hasn't changed. It just allows for faster, more precise, and concise, uh, and efficient screening and to make life easier and just quicker, really. Um, it's definitely more comprehensive. Um, and so I like to keep the screens pretty simple. The thing they, this is the first rule you have to know about screening because everybody wants the magic screen. And the the there's a couple things. One, there isn't a magic screen. You still have to do work. Two, the thing you have to be careful about is putting too much criteria in your screen because if you put a 100 items in it and it meets 99 of them, all right, and it doesn't meet just one, you don't see the name. So, and now 99 out of 100, that'd be probably a pretty good stock, you know, but you're not going to see it because it doesn't meet one criteria. So, you got to be careful when you make the screens for two re two things. One for a lot of criteria and two fundamentals versus technicals because again, if you have great fundamentals but the technicals are poor, well then you're going to be in looking at stocks that you get enamored with because they have big earnings but they're they're not they're not showing you know another O'Neil basic rule is, you know, the management's great, the products are great, the earnings are so great, why is the stock got a 22 relative strength and hitting a 52-week low? That doesn't make sense, right? I call it differential disclosure. So I separate the two. I have some hybrid screens, but I, and I, but I keep them very simple. And the EPS rank is what makes it the easiest for fundamental screening. If you really want to find the best stocks, just put in the EPS rank of 80 or better and then screen on technicals and you're going to, you're going to see pretty much everything that you want to see. You're going to see all the best earnings. Is it going to catch everything? Maybe not. Maybe there's a couple slip through the cracks, but you're going to catch pretty much everything. Then you want to do, you want to see, you know, that's going to rule out some of the biotechs and some of the companies that they don't trade on earnings. They might, you know, they're new drugs in the pipeline and they don't have any earnings yet. They might not even have any sales. That's where you're on a pure technical screen. So I sort of separate those. That's the sort of the first thing about screening that you have to understand. Not too many variables and separate the technicals from the fundamentals. And if you're going to put them together, then once again, have just some qualifiers. So maybe you have an EPS rank, but then you run all the technicals. So we can build. It's funny like when when Nvidia was going like this, the EPS rating was super, super high and the relative strength was super, super high. But now it's the fundamentals are still strong, but the relative strength is is, uh, kind of rolled over. So, and, and no surprise, the stock's kind of not going anywhere at this point. A general, Yeah. General rule of thumb, Scott, that both David Ryan and myself have is that we buy stocks on technicals and fundamentals and we sell stocks on technicals, usually only. Now, if fundamentals really deteriorate and you get a lot of deceleration, the stock goes parabolic, we might sell into a climax run and we're selling good technicals and the fundamentals would deteriorate. But most of the time, you know, the fundamentals will lag the price. The price will discount. Um, it's just the way it works. We've studied the stocks going all the way back to the late 1800s and it hasn't changed and I don't think it's going to change. So, that's why the technicals are really important. Don't get too enamored like you said with the fundamentals when the stock showing you a sagging, uh, RS line or RS in Nvidia as it was starting to go, right? The earnings on the table that were being reported were very pedestrian at best. They were negative. But what you said is so important. The stock was anticipating these numbers. Look at that. 440, 367, 478, etc. 567. My eyes are bad. So, the market is anticipating these huge, huge earnings. And then, who knows? I, I don't know where Nvidia is going obviously, but if it were to continue like this, guess what? The earnings that come in, they'll probably be good, but they won't be like this. They'll be like 35%. Certainly will see a slowdown two, three, four quarters down the road and then you'll say, "Oh, now I see why the smart money was selling the stock." But here's another thing to understand, Scott. Go ahead. You with growth stocks because they have such a long cycle, and this is going back to the O'Neil studies and our studies, you don't have to predict because the cycle's long, so you can, you want the earnings on the table. You know, I often point this out when I asked David Ryan one time in one of our Master Trader programs, "Have you, did you ever see O'Neil?" And I asked Mike Webster the same question. Did you ever see O'Neil buy a stock with poor earnings? Both of them said, "No, never. Can't remember." Mike said, I think I remember one time in 30 years. Never. Because you don't have to. The earnings are on the table already for the growth stocks. And if you are in the beginning of a new cycle, there's there's a lot of time. So, don't think you have to predict.

Great. All right. So, let's talk about the Minervini Trend Template, which you worked with, uh, former colleague of mine, Arushia, you guys worked closely to build this, and there's two places you can find it in MarketSurge. Down in this bottom left corner, it's in the folder called Technical. But you also have this Open Stock Ideas button, and we've got a Favorites button, which is really nice. And so I can add the one that I like the best. Is the one to four month trend? So that's been added to my favorites. So you could do that just that way you don't have to go down here and look for it. But, but we have a handful of, um, of, we've got the one month, the one to four month, the five month, and the five month wide. So let's talk a little bit about, uh, what these are doing. H how are they generating ideas?

So I'm actually having dinner with my very good friend, Stan Weinstein, who most of you probably know. He's a living legend for trend analysis. Wrote the book on it. Um, having dinner with him on Sunday. Matter of fact, down in, in, uh, in Fort Lauderdale. Um, this is where it all started for me. I met Stan back in 1990, October, around the right around the lows of the market, the bare market, um, in New York. We had lunch together and he convinced me that, you know, I should always qualify a stock with an uptrend first. And that's where this came from. And so we coded this where this is a qualifier. This is basically where this is the starting point. If the stock doesn't meet this screen, I'm not even interested in it. Now, the one month isn't what we call an early turn. This is when it starts to get into an uptrend, but hasn't gotten into what we would call a confirmed stage two uptrend. Um, but you get high tight flags and power plays. Sometimes they take off and they go so fast off the lows, they don't give the stock enough time for that moving average, that 200 day, to turn up and to really get into that uptrend. So to find those, you would run the one month, but the most of your stocks, the growth names, the ones that you're going to look for, and I think we have a chart in Nvidia and show exactly how this transpired in real life. Um, most will be in the one to four or the five month where you, I want to see four to five months of uptrend before I even consider a stock. 90% of the time on 90% of my trades, they're going to already be in an uptrend. So this is a qualifier. You can set your screen to use this as the database. You take the database and you break it down to where the they have to meet this qualifier and then you don't have to go through thousands of names and try to figure out whether the thing's in an uptrend or not.

So what Mark is talking about, so the one to four month has 157 stocks, you can see here items. There's two ways you could narrow this. You could either sort this list. So if I clicked on the composite rating, that would bring all the 99s to the top. Uh, or you could screen this list. So if, if you're, uh, let me go to new screen and I'll just call it the one to four mark. So instead of screening the MarketSurge database, which is 10,700 stocks and ETFs, uh, about 5,000ish stocks, I could change that and I could change it to the one to four month or the five month. So if I choose the one to four month, for example, now instead of searching for 10,000, inside the universe of 10,000 stocks, I am now searching inside the universe of these 157. Next week it might be, pardon me, it might be 200 stocks. It might be 130. It's dynamic. It's constantly changing. But I could say, okay, I prefer an EPS rating of at least 85. And so there are 23 stocks you see right here with an EPS rating of at least 85 that meet, uh, that are inside this trend template of one to four months. Right? But if you did the five month, you would see more because it's five months or more. There's always going to be more names on the longer time frames. As you go to the longer time frame, that's where most of mine are going to come from. So you could see there's 112 that meet the 85 EPS. Uh, but you're, this is a pre-screen. This is what I call non-negotiable criteria. It's, it's, it's my starting point. If I can't meet this screen, then I'm not interested in the name because it's not in an uptrend yet. And here's why. You've might have heard me say this before, but I'm going to repeat it for those of you who haven't heard it. When you go back and you look at the biggest winning stocks of all time, going all the way back to the 1800s, 98% of them made the biggest part of their move, the big run that was the biggest move of all time was made while they were in a stage two uptrend, while they met this criteria. So I, the simple question I ask everybody, would you rather have the 98% club or the 2% club? You want a 98% probability of having a big winner or a 2%? Because if you're going against that, you're going against 130, 150 years of history that say that a big winner is in a stage two uptrend. So why would you want to be in a stock in any other time other than when it has the potential to be a big winner?

Okay. So, let's talk about two others that we're going to highlight and then we're going to show you some examples from previous cycles. So, we also have relative strength. You talked, M, uh, Mike, Mark talked a lot about relative strength. So, uh, we have a screen in my favorites. I've got one called the All RS Line New High. So what this is doing, it's giving me all the stocks today, for example, and it will, it'll be historic where the relative strength line made a new high today. So like I happen to have AM highlighted, but here's the list of stocks down below in this list panel, how it, which has been a really good one, etc., etc. And you could do the same thing. You could either sort this list if it's by composite rating to bring the kind of the cream to the top, or or you could screen this list as well. And you can also, there's another variable in there that you can screen for close to the high, percent within 5%. So if you want to sort of get a heads up on it, that that will have a lot more names. That's going to be more plentiful in the names. But when when you're in a correction, you want to see the relative strength lines hitting new highs because the stock doesn't even have to go up. It could be going down less than the market and the relative strength line would be going up. So you're looking for stocks that are outperforming during corrections and then buying them as they come out of those, out of that correction, coming from bases. And that's just classic O'Neil strategy and classic the way the market works. Um, yeah, and, and the blue dot, the blue dot is a great. Let's talk about that one as well. I mean, the blue dot is just again, these are just go-to, particularly in a correction. When you're in a correction and or bare market, these are your go-to screens where you're going to see very seldom will you ever go back in a cycle and look back at the biggest winning stocks and not see that these screens picked them up, uh, early on. It just, it's like a a net that you just can't get. You, you call through the waters and it's just going to scoop up the fish. They're going to have to, they're

going to have to be in the net. So, let's go through and look at some examples. Uh that I've I've I've gone through.

So I went through the mini trend template, the RS line blue dot and tried to show you guys some examples of previous stocks and and and Mark talked about Nvidia early. So May 17th of 2023, the Nvidia was in the the trend template one month uh folder. Uh a handful of weeks later, it was in the one to four month folder. So, you know, you probably had heard of Nvidia by then, but if not, it would have been showing up on your screens as potential idea when you were doing this work.

So, let's let's pretend you'd never heard of of Nvidia at the time, Mark, and all of a sudden it shows up on your screens. Now, how would you handle something like this? Say, let's pretend it's July 11th and you and you it's shown up twice on on a trend template list. So, right now, it's showing up. It's in an uptrend, but it's not in a base. So, I'm going to stay away from it. I'm going to wait for it to consolidate. And once it consolidates and then completes what I call a volatility contraction, I'm going to buy it out of the coming out of that right side, that tightest point in the right side. And I'll tell you exactly where we bought it. We bought the stock. Um, you you can I think it's even on the chart. I don't know if you have the chart, but you can point it in. You know where it is on that up week right there. Um, or that's actually is that that's a weekly or daily? That's that's um I'm sorry. This is a weekly. So, that's coming out of that flat base. That's where you showed me exactly that week as it emerged from that it gets on the right side there and you see that relative strength line just takes off and you could see the relative strength line actually probed into new high ground a couple maybe four weeks prior. Yeah, right there it's already coming up. That's going to come up on the blue dot screen. The relative strength making new highs. All that's going to happen there and now it gets nice and tight. And you can see how efficient too that move coming out of that base.

Here's something I also want to point out. I hear people all the time saying base breakouts don't work anymore. It's an old It's It's the most ridiculous thing that I ever heard. It You go back to 1800. I'm sure they told Jesse Livermore the same thing and I'm sure Nicholas Darvis heard the same thing and Richard Love and Bill O'Neal and you name it. And I I've been hearing the same thing for 40 years. So, and they've been working for 40 years. I made I made my entire fortune on base breakouts and I'm and I'm still making it. Uh and won two US in advancing championships 24 years apart using base breakouts.

So, but here's the thing. The argument is that you know base breakouts don't work. Everybody follows it. This is one of the most followed stocks that you possibly could find that would be like efficient as can be. One of the he most heavily weighted stocks in the S&P 500 in the NASDAQ and the base breakout is beautiful. It's perfect. And it worked in other times too within its life cycle. That is about as good as it can get from a base breakout. And if you look at all these names, you look at all the big names, they all had great opportunities to buy coming out of bases.

So, um, yeah, this but but but here's what I want to point out was really important. Remember, the trend template is a qualifier. It's it's not a buy signal because it's on the list. It just simply says it meets the uptrend and now you have to look for an entry point coming out of the base. Perfect.

Okay. So here's another example and this kind of falls perfectly into what you just mentioned. July 14th, it shows up in on the trend template. Not doesn't mean you run out and buy Spotify at that time, but it might show up on your ideal list, your watch list, and guess what? It builds like a you know 12-week cup with handle and then uh breaks out from there. Um all kind of like uh what Nvidia did. And RS line is new high as well. Yeah. And sometimes I don't buy it till much after that first or second base. It might have a base break out of that base. It's in an uptrend and then it's been in an uptrend for maybe a year and I'm buying it out of a second or third stage base. Some of these are, you know, earlier bases. Yeah, you had upper other opportunities to buy many of these names and you and you will have the same with with other names going forward.

All right, let's um Oops. Oh, I jumped ahead. I apologize. Yeah, go ahead. One one last one. The Celesteica June 6, 2023. This was actually a little bit more timely. It actually broke out the next week, but uh was on the one to four months, broke out of this double bottom. And and again, you can see how this is, you know, pretty early in that new upcycle, you know. So it's, you know, it's it's not like uh this is waiting for it to have this information that is going to be 6 months or a year later. I mean, as soon as it starts to turn up in that uptrend, it's going to hit those lists. So that's why you want to monitor that on a regular basis. So the in the action from, you know, it's kind of off the charts there, but basically around six all the way up to roughly 12. That's the uptrend that's creating the the template that's that's pushing this name in there, right, Mark? It's that previous prior uptrend. Yeah, absolutely. And you want that inertia. You don't want I have a saying, you don't want to be uh you don't you don't want to buy the lowest price. You want to buy the right price. You know, you could buy the lowest price and sit there for five years while the stock does nothing and lose a lot of time. In a stage two uptrend, you're gaining value and you're optimizing the use of time. In every other stage, in stage one, when stock's moving sideways, you're you might not even be losing value, but you're definitely losing time and you're and you might be just flatlining the value. In stage three, topping, you're still maybe you're not losing value, but you're not gaining value, but you're losing time. In stage four, the downtrend. You're losing both. Losing value and time, the worst possible scenario. So, stage two is the only stage you want to be in because there you're you're gaining value and you're using it. You're you're doing it as fast as you can. So, you're you're compounding the money faster. That's why stage two is the only stage you ever want to be in. It's the only stage I buy any stocks. I haven't been I haven't bought a stock out of stage two in 30 some odd years. Wow. Cool. All right.

That I I love the way you you you put that with the different stages. Uh, okay, so the RS line new high, we talked about it earlier. What the relative strength line is is is it's measuring the stock you're looking at versus the price action of the S&P 500. An RS line going up. Think about like a clock. 12:00 on an on an RS line would be perfect. 3:00 would be neutral. 6 o'clock would be uh awful. So you you you want something around I mean 12 is not is a you know you're asking too much pretty much but you'd want a one or a two o'clock on on a on a clock as far as your relative strength and here's some examples. I'm sorry, Marco. You had something to I I've seen them go to 12:00. Yeah, they can. Huh? During bare markets, you'll see 12:00. That's true. That's true. Uh CF Industries in and uh the uh broke out of this coupled with handle and the relative strength line was making new highs as it did that. And um quite a move. It uh nice and tight. Re really short tiny bursts on the blue weekly bars, but that kind of makes it easier to hold. Uh, and then it, you know, ran into trouble as the uh, the market ran into trouble in, you know, late 07, early 08. Now, something to point out, IPOs aren't, you're not going to have the data to be able to meet a stage two uptrend sometime. If there's only, let's say there's eight weeks or there's 13 weeks of data in a new IPO, well then the stage two, you're going to you're not going to uh uh require that it's in a stage two uptrend. Now, you're just looking at the current chart pattern, and you'd want it to be above the 50 and the 20, and you you you'd use the uh the faster moving averages. So, that's just a caveat that you have to realize that you're not doesn't mean that a stock is off the table. It's an IPO because it doesn't meet the stage two uptrend. It it can't when it doesn't have enough data. It doesn't have the price history.

All right. So, here's Apploven uh breaking out of this um really large base and the RS line. You that's almost at 12:00 just like you said. Yep. Yeah. There it is. I mean, it's, you know, very ju just almost straight up uh prior to the breakout. You see, that's it's already going into new high ground. And that's what you want to see. That's why you would use that screen to look for the stocks that are outperforming when they're in a base. And usually the market's correcting. That's your best scenario. Like right now, you should be looking for stocks that have relative strength lines that are improving, moving up, breaking into new high ground, and stocks are in bases. And they may not even have broken out yet. But usually when you get that scenario, the breakout is not too far away. So you got to you got to you got to be ready to act. Uh, last but not least in this category, Palunteer RS line a handful of times, but I just wanted to highlight a couple of them where the the stock had a really kind of a nasty shakeout on the daily. But look at that weekly bar and you have the RS line at new high as as the stock is emerging into 52- week highs. And these are all in stage two up trends would all meet the criteria. You would you would not miss them on either of those screens. You're going to see a lot of overlap and see these on various screens. And that's a good thing if you're seeing on the stage two uptrend, you're seeing it at the relative strength new high screen. And then if also if it meets the the uh the earnings criteria, which some of these names we're talking about, a very powerful earnings. Palunteer a super smart CEO. Um he's kind of a quirky guy. He's he's funl looking and uh I love him. I love him. I love what he's doing. Um, you know, the stock's extended right now, but this is uh this could be a a a next big big winner that has a secular move even more than it's already made. And a good point, Mark. Yeah, this wasn't only on the RSI new high was in the mini tempe, was in uh earnings gap up list. So, they will show up on uh usually the best ones do, right? They they they pollinate across a number of different types of reports and screens.

All right. So, the blue dot is it's a little bit like the RS line, but there's a there's a caveat to the how that blue dot shows up. So, the RS line has to be at 52- week highs. And secondarily, and this is has to occur as well, the stock has to either be in a base or emerging from the base if you're on a daily chart on that day or if you're on a weekly chart on that week. And that will highlight with that that blue dot circle at the very end of the RS line. So here's uh Palo Alto Networks the historical example breaking out of this flat base uh and RS line blue dot as it does that and you can see how you had a little bit of a head head fake below the 10-week line about five or six weeks into the move but otherwise uh was was a pretty uh easy hold as it held that moving average the whole way up. And then currently at Ego Eagle Mines, the gold sector has been really strong. So this was on the RSL blue dot list as it emerged from that cup right there. And I thought I'd give you one today. Uh Landbridge, I think Antaro re resources as well uh in this same group. But this is what it would look like on on your chart. So Lambridge is breaking out of this double bottom today. Okay, it broke out today and the RS line is at 52- week highs. And so the blue dot would be on on the daily chart as well as the weekly chart and then it gets dumped into that list and that it'll stay in that list for 45 days. So uh you'll have kind of a historical track record uh a trailing 45 days of the blue dot. Yeah, that RS line is leading too. It's going to new high ground before the price. Yeah, I think it was in the new high ground um yesterday. So, while the stock was uh slightly red, the RS line was already, you know, basically there.

Okay. So, again, the offer is $24.95 for today only, March 19th. If you watch the recorded version, I apologize. You'll get a lot out of it, but the offer will not be valid. The $24.95 for one month will be fine. But if you're if you're on the fence, take advantage of the free two weeks. So you'll get six weeks for 24.95 uh if you sign up today. 800 831-2525. You can call us and we can take care of it for you or investors.comwebinar offer.

Um, let's uh we actually made pretty good time. So, I think if you if you've got time, Mark, I'd like if my colleagues could maybe shoot me a couple of uh questions that uh everyone has for Mark. I know there's a ton of questions, but um fire some questions to me, guys, that you think uh um All right, so let's start with one that that uh Jerry wants to uh says, people want to know where the trend templates are. So, easiest way is up there in stock ideas. Yeah. I added it to my favorites. So, what I did here is I'm in the favorites tab. I hit add and then I go to reports, stocks, and the subfolder technical. If you scroll down, um, what did I do wrong here? Oh, I didn't open the technical. I apologize. You have to open the technical. You can see I've checked the box for all hours line blue dot and the minveni trend template. If I wanted the fivemonth I could check that box. Five month wide ants list. I could check it all the ones I prefer and it just makes it nice and easy in the favorites. Um, and you can shortcut right to it too if you just go to uh is it under correction or uptrend? It might be under um uh uh weekly review. Yep. Uptrend. I'm on daily review. There's the fivemon right there. So, it's in the uptrend tab under weekly review. There's What I like about this is it brings you on the bottom panel on the left. It brings you right to all of them. Oops. I'm sorry. They're stored down here. Let me pull this up so you can see. So, let me click on that. That'll take you right to that. So all the t uh pretty much everything you'll find on this lefth hand panel under this um subfolder called reports. So the the open stock ideas is kind of like a table of contents of everything that's down here below.

Um, Arie says, "Let's show how to change the database to the Venerini screener again." Okay. So, if I create a new screen, um, I'm going to call this Arie since you provided the question. And you can do this with anything. You can you not just my screener, you can choose the database to to qualify it with different other different uh, Yep. So, here's the reports. Here's the technical. So, you could do that with a minven trend template or I could do it with uh imagine I wanted to screen the RS line um new high one. Let's go to that one. You could start with that as a as a qualifier. All RS line new high. Select. And now I'm looking for inside the universe of 780 stocks instead of 10,000. And just to make it easy, I could say I want an EPS rating of at least 70. And another thing another another thing to point out is that it's actually my screens are a good um gauge of market health too because when you're in a really healthy market you're going to see a lot of stocks and uptrends and when you start seeing that thing come down where the five month has got 100 names it's it's not a very good market. I mean, I've seen like a thousand names in the five month and then I've seen where there's 90 names and so I'm not sure where it is now, the five month, but certainly um, you know, you're probably dwindling down from some of the peak numbers that you had when the market was really strong. It almost acts as a as a you know, as a market gauge as well. It's funny you say that because in house we do we do have noticed like um if there's a lot of stocks on the near pivot list or a lot of stocks on the breaking out today list it could kind of give you a feel for the quality of uh the market at that moment. Yeah. Uh you cannot screen multiple reports into one. So I can't choose the mini and the all RS line new high. It's just a single report or the database. A lot of you said you called and were unable to get through. Let me let me um here let me show my screen again. investors.cominar offer if you need to do that online.

Uh, some questions on uh Weinstein. Can let's maybe tell you where we're having dinner. The stage two trend is that that's from um would you recommend people read his book? Um, where is Stan? Absolutely. Stan's book is a must readad. It's a it's a it's a classic, you know. Um, yeah, it was one of the first books I ever read. I'm trying to find it in my bookshelf. Profiting and bull and bare markets by Stan Weinstein. Yeah, it's awesome. I mean, Stan is my very good friend. I love him dearly. And I didn't know him from a hole in the wall in 1990. and he was so generous and so helpful and was willing to have lunch with me and just he's an awesome guy. Anybody who knows him knows what I'm talking about. Profiting in bull and bear markets and he's he's he's on the cover. So Weinstein is we n s i n. If you search on Amazon or whatever, you'll find it for sure. Yeah, great great primer for just the fundamentals of technical analysis of the very first thing that you should learn.

Okay. All right, Mark. Well, I really appreciate it. We we did this in an hour on the on the button and that's great. I'm glad. And um again, you guys can take advantage of the offer, but this will be archived. So, if you have you just kind of want to review it and if we went too fast in certain areas, I apologize, but go to investors.cominars and uh under the video tab, you'll you'll be able to find this probably in the next handful of hours. And I don't want everybody to think that I'm I'm going becoming a massive bear. I know I showed some some ominous uh uh readings there, but these things can go on for a long period of time and the market could stay very exuberant, if you will, or frothy and and secular bull markets can go on. But just, you know, be respectful. This is all why use stop-losses and and when the stocks aren't working, you let them stop you out and you go to cash and you wait for stocks to be in uptrends and to be coming out of bases and just stay disciplined and you won't get caught in those downturns even if we have uh major uh major corrections.

Yeah. One a couple people asked questions about, you know, this the stop-loss policy that you you have like so if you put on a position tomorrow, do you do you use like some kind of the way the stock trades to evaluate the stop or do you just do like like a hard 5% regardless whether it's BABA or XYZ? I'm always trying to back into the into the stop so the the volatility of the name would agree with the type of percentage stop that I would want to place. So for instance, that's why I want that right side, that real tight entry point to be in single digits because I don't want to take a bigger than single digit loss. So I'm using the low of that pivot or the low of the base as a stop technically. But if I can't find that and it's a name I really want to own and maybe it's a little more volatile, well then I'm just picking an amount of money that I am willing to risk. Um, and and that's really it. It's really that simple. I'm going to go. But again, if you don't let stocks fluctuate, you're going to get stopped out and and you're going to get whipped around quite a bit. So you got to have some fluctuation. And that's why it's important to go with the stocks that the volatility is calming down and get that expansion out of those volatility contractions because if you go into the volatile names, they're going to be whipping all over the place and they're not really doing anything wrong. They're just kind of doing what they do. Meanwhile, you're getting knocked all over the place because you don't have the risk tolerance.

Okay. So, thank thank you, Mark. So, and I apologize because there is some confusion with people on the the offer. It the offer will say one month for $24.95 on the back end. If your if your order went through on March 19th, we will uh credit you the two weeks. So, I apologize for the confusion if there was any. We will credit you the two weeks. I promise you that it won't happen right away. You'll sign up for one month at $24.95 get six. I don't think you'll I don't giving it away, right? Yeah. I don't get paid to say this. It's a category killer that for 30 years. There's not really is no competition for what it does. It's in the market market surge and market smith and product without a m. Uh, it's it's always educational and and um people really uh appreciate you taking the time out um to help you know I I learned something. What I actually the thing that I wrote down and circled and starred was the stage two the comment you made about stage two. I thought that was very powerful. So we we really appreciate it and everyone thank you for taking time to join us on a Wednesday and um once again this will be posted on the website. You can watch at your convenience. I appreciate it. I hope everything was helpful for everyone and we'll do it again. Sure. All right. Great. Thank you, Mark. Thank you everyone. Have a great day. Take care. Recording stopped.