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Mark Minervini's gains relative to S&P500 during 2021competition I came across some data which enabled me to construct a chart showing Mark Minervini's monthly gains in his spectacularly successful 2021 trading competition win. I also measured the equivalent monthly gains of the S&P500. My aim was to study how he performed relative to the monthly Index movement so that I could, perhaps, understand his methodology. I have to say that it didn't live up to my expectations as it was hard to see the relationship in some months. I wondered if there was an overall competition winning strategy behind the performance of some of the later months. Text from 'restricted during publishing' Text Box' Mark Minervini- 2021 USA Trading Competition Winner- ~340% in one year! No holding strategy even comes close, to my knowledge. (Mark also won the 1997 competition!) Daily Candlestick Chart shows Mark's monthly, published and verified, performance against the S&P500's. It's educational to study the correlation between Mark's monthly returns against chart price movements. Perhaps some risk strategy was employed during the last few months in order to preserve the already spectacular percentage achieved half way through the competition year! Slow Dough @Whole_wit Fri 23rdJan 2023 Jack Corsellis also has helpful looks into specific buys and sells with the actual charts of various transactions of the 1997 competition, that Mark Minervini also won. www.youtube.com I obtained the monthly competition results data from Linus Lim's video at around 1:08 from start. www.youtube.com
SP:SPXShort
by Frankyboy
DISH long hedged options playEveryone knows DISH Network. (Fun fact: the name is an acronym for DIgital Sky Highway.) Colorado-based Dish also does business through Sling TV and offers mobile service via Dish Wireless and prepaid service Boost Mobile, with plans to offer wireless internet and its own video streaming -- they do own Blockbuster. Dish TV has about 10 million paid subscribers. TA-oriented investors might spot some bullish signals, like the falling wedge and double bottom, while the price has recently moved above the MA. With the recent SPX / SPY / QQQ rallying, maybe it's time to consider a company at the crossroads of tech, infrastructure, media and entertainment. However, stocks' response to the latest jobs report and less-than-stellar Big Tech earnings might also give pause. Here's an options strategy that captures growth potential of 13% (21% annualized) while also providing downside protection of 35% -- start to lose only if DISH falls below $9.99 as of 9/15/23. Hedged like this: Buy 1 $15 Call Sell 1 $17.50 Call Sell 2 $10 Puts All expiring 9/15/23 Capital requirement: $1998
DLong
by oliveinvest
1
The income statement: the place where profit livesToday we are going to look at the second of the three main reports that a company publishes during the earnings season, the income statement. Just like the balance sheet, it is published every quarter and year. This is how we can find out how much a company earns and how much it spends. The difference between revenues and expenses is called profit . I would like to highlight this term "profit" again, because there is a very strong correlation between the dynamics of the stock price and the profitability of the company. Let's take a look at the stock price charts of companies that are profitable and those that are unprofitable. 3 charts of unprofitable companies : 3 charts of profitable companies : As we can see, stocks of unprofitable companies have a hard enough time growing, while profitable companies, on the contrary, are getting fundamental support to grow their stocks. We know from the previous post that a company's Equity grows due to Retained Earnings. And if Equity grows, so do Assets. Recall: Assets are equal to the sum of a company's Equity and Liabilities. Thus, growing Assets, like a winch attached to a strong tree, pull our machine (= stock price) higher and higher. This is, of course, a simplified example, but it still helps to realize that a company's financial performance directly affects its value. Now let's look at how earnings are calculated in the income statement. The general principle is this: if we subtract all expenses from revenue, we get profit . Revenue is calculated quite simply - it is the sum of all goods and services sold over a period (a quarter or a year). But expenses are different, so in the income statement we will see one item called "Total revenue" and many items of expenses. These expenses are deducted from revenue gradually (top-down). That is, we don't add up all the expenses and then subtract the total expenses from the revenue - no. We deduct each expense item individually. So at each step of this subtraction, we get different kinds of profit : gross profit, operating income, pretax income, net income. So let's look at the report itself. - Total revenue This is, as we've already determined, the sum of all goods and services sold for the period. Or you could put it another way: this is all the money the company received from sales over a period of time. Let me say right off the bat that all of the numbers in this report are counted for a specific period. In the quarterly report, the period, respectively, is 1 quarter, and in the annual report, it is 1 year. Remember my comparison of the balance sheet with the photo ? When we analyze the balance sheet, we see a photo (data snapshot) on the last day of the reporting period, but not so in the income statement. There we see the accumulated amounts for a specific period (i.e. from the beginning of the reporting quarter to the end of that quarter or from the beginning of the reporting year to the end of that year). - Cost of goods sold Since materials and other components are used to make products, accountants calculate the amount of costs directly related to the production of products and place them in this item. For example, the cost of raw materials for making shoes would fall into this item, but the cost of salaries for the accountant who works for that company would not. You could say that these costs are costs that are directly related to the quantity of goods produced. - Gross profit (Gross profit = Total revenue - Cost of goods sold) If we subtract the cost of goods sold from the total revenue, we get gross profit. - Operating expenses (Operating expenses are costs that are not part of the cost of production) Operating expenses include fixed costs that have little or no relation to the amount of output. These may include rental payments, staff salaries, office support costs, advertising costs, and so on. - Operating income (Operating income = Gross profit - Operating expenses) If we subtract operating expenses from gross profit, we get operating income. Or you can calculate it this way: Operating income = Total revenue - Cost of goods sold - Operating expenses. - Non-operating income (this item includes all income and expenses that are not related to regular business operations) It is interesting, that despite its name, non-operating income and operating income can have negative values. For this to happen, it is sufficient that the corresponding expenses exceed the income. This is a clear demonstration of how businessmen revere profit and income, but avoid the word "loss" in every possible way. Apparently, a negative operating income sounds better. Below is a look at two popular components of non-operating income. - Interest expense This is the interest the company pays on loans. - Unusual income/expense This item includes unusual income minus unusual expenses. "Unusual" means not repeated in the course of regular activities. Let's say you put up a statue of the company's founder - that's an unusual expense. And if it was already there, and it was sold, that's unusual income. - Pretax income (Pretax income = Operating income + Non-operating income) If we add or subtract (depending on whether it is negative or positive) non-operating income to operating income, we get pretax income. - Income tax Income tax reduces our profit by the tax rate. - Net income (Net income = Pretax income - Income tax) Here we get to the income from which expenses are no longer deducted. That is why it is called "net". It is the bottom line of any company's performance over a period. Net income can be positive or negative. If it's positive, it's good news for investors, because it can go either to pay dividends or to further develop the company and increase profits. This concludes part one of my series of posts on the Income statement. In the next parts, we'll break down how net income is distributed to holders of different types of stock: preferred and common. See you soon!
SP:SPXEducation
by Be_Capy
You Can Have the Cake and Eat it TooCBOT: Treasury Yield Spread 10Y-2YY ( CBOT_MINI:10Y1! CBOT_MINI:2YY1! ), Micro Dow ( CBOT_MINI:MYM1! ), Micro S&P ( CME_MINI:MES1! ) On Wednesday, the Federal Reserve raises its benchmark Fed Funds rate by 25 basis points to a target range of 4.5%-4.75%. The move marked the eighth consecutive hikes that have began in March 2022. The overnight risk-free rate is now at its highest level since October 2007. Fed Chairman Jerome Powell sends mixed signals in his post-FOMC meeting news conference but appears more dovish comparing to previous speeches. The Committee thinks that “on-going increases in the target range will be appropriate”. These words send stocks down minutes after the speech begins at 2:30PM. However, during the Q&A session, when the Fed Chair confirms, for the first time, that “the disinflationary process has started,” the stock market rebounds strongly and finishes in the positive territory for the day. Other mixed messages: • Inflation data shows a welcome reduction in the monthly pace of increases; • It would be “very premature to declare victory or to think we really got this”; • It’s “possible” that the funds rate could stay lower than 5%; • Unlikely the Fed would cut rates this year unless inflation comes down more rapidly. Actions speak louder than words. In two rate-setting meetings, the Fed has slowed the pace from 75 bps to 25 bps. The path is not likely to reverse, and future rate hikes will come down to just two options, either 0 or 25 bps. In my opinion, the terminal rate will end at 5% or 5.25% after the March and May meeting. In recent months, the “Risk” button has been pressed on for risky assets: • The Dow is up 19% since October, and the S&P and the Nasdaq are up 17% and 18% for the same period, respectively; • Gold futures rallies 21% since November, while Bitcoin jumps 58%; • Tesla and Ark Innovation ETF gain 47% and 33% year-to-date, respectively. Historically, it’s rare for the stock market to dip two years or more in a row. For the S&P 500, it only happened four times in the last 100 years. The odds favor stock investors in the Year of Rabbits after a brutal double-digit selloff in 2022. Fed rate hikes and high inflation are like a brake that decelerated the running economy car. Now that the driver’s foot is off the brake, will the economy improve immediately? Not so fast. We will endure higher costs for months to come. Take the example of food items, once the price goes up, it usually stays up for the year. Sometimes, suppliers resolve to reducing the size of package for the illusion of keeping the same price, a tactic known as “Shrinkflation”. Wages, rent, phone bill, cable TV, utility, homeowner association fees and sales tax also seldom go down. All these point to a sticky inflation. Without massive government stimulus to press the gas pedal, subdued growth is on the horizon. However, the stock market is forward looking. Investors already see an "invisible foot" on the accelerator and begin buying in the dip. On balance, I’m bullish about risky assets, but would consider protecting my investments carefully. The inversed yield curve is a proven and tested signal of a potential recession. The 10Y-2Y Treasury yield spread is at -64 bps after the Fed rate decision. The yield spread turned negative last July and stayed below zero in the last seven months. Major crises could break out unexpectedly, crashing our party. The year-long Russia-Ukraine conflict could intensify, tensions in the Taiwan Strait could escalate, and the US government might not be able to avoid a national debt default. A Hedged Position on Stock Index Futures We could consider using the CME Micro E-mini S&P futures to establish a bullish position on the U.S. stock market. The June contract MESM3 is currently quoted at 4177, which is 58 points above the cash index. To protect my position from any adverse market movement, an out-of-the-money put option could be placed at the 3950-strike. If you are more pessimistic, a lower strike of 3840 may be considered. The benefit of futures over cash index ETFs lies with the leverage. With a smaller margin deposit upfront, investment return could be amplified if the market moves in your favor. The downside is that the loss will also ramp up quickly if the market moves against you. Put options protect us from any downfall below the strike price. Unlike futures, the maximum loss from a long options position is the premium you have paid upfront. A combination of long futures and long put options is, in theory, limited downside with unlimited upside. The risk and return tradeoff are asymmetry in this case. As a result, you can have the cake and eat it too! Happy trading. Disclaimers *Trade ideas cited above are for illustration only, as an integral part of a case study to demonstrate the fundamental concepts in risk management under the market scenarios being discussed. They shall not be construed as investment recommendations or advice. Nor are they used to promote any specific products, or services. CME Real-time Market Data help identify trade set-ups and express my market views. If you have futures in your trading portfolio, check out on CME Group data plans in TradingView that suit your trading needs www.tradingview.com
Editors' picks
CBOT_MINI:10Y1!Long
by JimHuangChicago
9
Not another market timing theory....Okay, I get it. Timing the market < time in the market, but I can't argue with the results of this strategy. Here we're going to take a look at a timing model using the popular MACD / MA Cross combination, with a dash of stop loss and a pinch of momentum indication, so let's dive in. This is "close" to what I use for my personal indicator, although done on a different platform. A while back, I took on the challenge of learning Pine Script for my first coding experience. A lot of copy/paste was used. I published an "Advanced MACD/MA Cross" indicator, with the intent on building it into this strategy. So yes, first of all, the main signal is a combo MACD / MA Cross on the S&P 500 index ( SP:SPX ). Another important thing, likely the most important thing of all, is this strategy relies on the LOGARITHMIC movement of the S&P. This is very important. When looking at the log movement of a stock or index or whatever, you go from looking at the REAL PRICE to looking at MOMENTUM. In my years of trying to find a decent momentum indicator, I found just looking at the logarithmic movement was best. Settings for MA Cross are fast 200 TEMA, slow 650 DEMA. I've found it best if the MA types are different (slow MA is also a slower "type") when looking at logarithmic movement. For instance, if your slow MA is an SMA, fast should be EMA. If slow MA is EMA, fast should be DEMA, so on and so forth. This will cause the slow MA to vertical shift down during bull markets and up during bear markets. The settings provided seem to give a good overall indicator of general market movements, but usually it's slow to respond to market entries. My MACD looks at exponential moving averages of 200 and 500 on the S&P, and then applies a 100 day EMA signal line. This provides good entry points in general. When evaluating these long term trends, sometimes, unexpected things happen in the market that give potential to lose a lot of money. This strategy also implements a stop loss and market "bounce" finder. Stop loss is straight forward. If the strategy detects that the log movement of S&P has dropped by 10 points, a "bond market alert" will trigger. Conversely, the "bounce" finder looks at log movement of S&P from a rolling 17 day period, and if it's moved upwards by 10 points, a "stock market alert" will trigger. The strategy tester is pretty good, although the equity holds a flat line through the Bond market. This is where a true portfolio backtest would come into play. Look at the list of trades from the strategy tester, input them into a spreadsheet or whatever, and see how this movement indicator would work for your favorite stock over the past several years. Chances are, it'll work pretty well, and a lot better than a buy and hold strategy. While looking, you may want to investigate leveraged long term treasury bonds ( AMEX:TMF ) during the indicated downtime, or index LETF's during the uptrends ( AMEX:UPRO , NASDAQ:TQQQ , etc.), depending on your risk tolerance. The chart above shows the S&P compared to Vanguard's Long Term Treasury ETF ( NASDAQ:VGLT ), as well as market entry and exit positions, in the first pane. Second pane is the Logarithmic movement of the S&P, and the strategies MA Cross lines. Third pane is MACD (MACD MA's not shown for clarity). Fourth pane shows the "bounce" indicator. Strategy tester goes all the way back to 1950, or the beginning of daily data for the S&P 500. You'll see a few trades missed the mark, but the profit factor is important to note (and keep in mind, this doesn't take into effect BONDS!) P.S. disclaimer, this isn't 100% exactly what I use for my personal market entry / exit indicators. My personal bounce entry and stop-loss methodologies are slightly different, and I also track an underlying portfolio that will initiate a stop loss if neither stocks or bonds are working (i.e. 2022). And also, I'm not a financial professional, this isn't financial advice, yada yada yada. P.P.S. please forgive me if the formatting doesn't end up right here, never published a strategy before!
SP:SPX
by garretthenry229
At the beginning was the EquityWith this post, I am concluding the analysis of the company's balance sheet. You can read the previous parts here: Part 1 - Balance sheet: taking the first steps Part 2 - Assets I prioritize Part 3 - A sense of debt Now we know that every company has assets on one side of the balance sheet and liabilities and equity on the other side. If you add liabilities and equity together you get the sum of assets. And vice versa, if you subtract all of the company's liabilities from the assets, you get what? That's right, you get Equity . Let's discuss this important component of the balance sheet. When a company is first established, it must have initial equity. This is the money with which any business starts. It is used for the first expenses of the new company. In the case of our workshop , the equity was the master's savings, with which he bought the garage, equipment, raw materials and other assets to start his business. As sales progressed, the workshop received the revenue and reimbursed expenses. Whatever was left over was used to boost the company's profit. So, our master invested his capital in the business to increase it through profits. Making a profit is the main purpose for which the company's assets work, loans are raised, and equity is invested. Let's see which balance sheet items are in the Equity group: - Common stock (The sum of nominal values of common stock issued). Remember, when our master decided to turn his company into a stock company , he issued 1 million shares at a price of $1,000 per share. So $1,000 per share is the par value of the stock. And the sum of the nominal values of the stocks issued would be $1 billion. - Retained earnings . It is clear from the name of this item that it contains profits that have not been distributed. We will find out where it can be allocated in the next post, when we start analyzing the income statement. - Accumulated other comprehensive income (Profit or loss on open investments). The profit or loss of a company can be not only from its core business, but also, for example, from the rise or fall in the value of other companies' shares that it bought. In our example, the workshop has oil company shares. The financial result from the revaluation of these shares is recorded in this item. So, the equity is necessary for the company to invest it in the business and make a profit. Then the retained earnings themselves become equity, which is reinvested to make even more profits. It's a continuous cycle of the company's life that bets on equity growth. Which balance sheet items are of interest to me in the Equity group? Of course, I am interested in the profit-related items: retained earnings and profit or loss on open investments. The sum of nominal share values is a static indicator, so it can hardly tell us anything. However, it is better to use information from the income statement rather than the balance sheet to analyze earnings, because only this report allows us to see the entire structure of a company's income and expenses. So we conclude the general analysis of a company's balance sheet. To fully understand why it is needed, let's engage our imagination once again. Do you remember the example with the hotel ? We imagined that a joint stock company is a hotel with identical rooms, where you, as an investor, can buy a certain number of rooms (one room = one share). Think about what you would want to look at first before buying? Personally, I'd rather see photos of the rooms. So, the balance sheet can be compared to such photos that we get from the hotel at quarterly and annual intervals. Of course, in such a case, the hotel will try to use special effects as much as possible in order to improve investors' impression of the photos released. However, if we track and compare photos over multiple periods, we can still understand: is our hotel evolving, or have we been watching the same couch in a standard room for 10 years in a row. We can say that the balance sheet is a "photo" of the company's assets, debts and equity at the balance sheet date. And the balance sheet items I've chosen are what I look at first in this photo. In the next series of posts, we will break down an equally important report, the income statement, and explore the essence of earnings. See you soon!
NASDAQ:AAPLEducation
by Be_Capy
Strategy Coding E01: Adding a custom Trailing-StopIn my experience there are phases to creating a strategy. In this episode we will cover one of the most important steps: establishing an exit strategy. Exiting a position is crucial to risk management. If your entries are terrible but you have a good exit strategy, you might get by and not lose a lot of your capital. And vice-versa, if your entries are great, but your exit strategy is terrible, you my not make any profit. Concepts we will cover in this episode: Integrating an indicator value as a trailing stop. Lowering the trailing stop sensitivity by using the Average True Range (ATR). Customizing the ATR value. Brief introduction to 'modules'.
Editors' picks
AMEX:SPYEducation
by Electrified
14
Pure trendline breakout strategy; Manticore Investems Pure trendline break strategy is based on indicators: Tradelines with Breaks (FREE) - TwB Position entry signals, trendline breakout. We look for signals on the ~h4 interval. We take a position on lower intervals when we see entry signals there as well. Order block Detector (FREE) - ObD Generates us support and resistance for the price (red - sell, green - buy) Pivot Based Trailing Maxima & Minima (FREE) - Pbt Helps determine the current trend of the market on a given interval, serves as an add-on informing us about market trends. In the green zone - buy, red - sell. SuperOSC (FREE) - sOSC Informs us about the strength of the market at a given moment (on a specific candle) In addition: LuxAlgo Price Action Concept (PREMIUM). Strategy description: Basically we trade after large signals generated on h4/d1 intervals. When we take a position we look for the optimal place to enter from m15-h1. We use resistances and supports as SL/TPs. Trading style: scalping / daytrading. Ideal entry setup: 1) Signal generated on the h4/d1 TwB interval. 2) ObD secure our position / ObD do not interfere with a potential sell or buy 3) The trend set by Pbt agrees with the direction we are playing. (Green zone - buy / Red zone - sell). 4) The candle after which we enter is not drawn on the sOSC Examples below: H4 interval buy signal: 1) Pbt - Green buy zone 2) TwB - upward signal 3) sOSC - the candle that generated the buy signal did not cross the dashed lines When we take a position we go down to lower intervals to best estimate SL:TP H1 interval: H1 interval buy signal: 1) Pbt - Green buy zone 2) TwB - upward signal 3) sOSC - the candle that generated the buy signal did not cross the dashed lines Estimation of risk and timing of exit: Risk estimation: 1) We use ObD to determine the optimal risk, they serve as resistance to the price. 2) We set positions below the buy / sell zones from Pbt 3) We go to lower intervals, set SL under the TwB level of the opposite trendline Determining take profit: 1) We play out positions to supports or resistances generated by ObD 2) We close the position when we see that after the close of the h4/h1 candle the sOSC is drawn above or below the dashed line 3) We can close positions when we see that the movement is losing strength and there are opposition signals to our position on low intervals. It works best to close positions after reaching ObD supports/resistances in conjunction with a drawn-out sOSC. LuxAlgo Price Action Concept indicator (PREMIUM), serves as an aid in determining the strength of a given support or resistance (the higher the %, the stronger the resistance)
BITSTAMP:BTCUSDEducation
by Manticore_Investments
2