Monday, February 15, 2010

Stock Market Investing Sites On The Web

Since it's President's Day and the markets are closed. I thought that I would take some time to look around the web for some posts on stock market investing that other bloggers have written in case you might want to find some other view points. Here is a sampling of some of the sites I found.

Billy, at Beginner Investing, always advises doing research before investing. He shares his reviews and opinions on a number of investing sites, especially the free ones. Take a look at his post on, ADVFN, a free stock market site that offers a lot of information.

Enrolling in a 401k plan can be intimidating enough, then throw into the mix when you leaver your current employer and you have to figure out what you need to do now. You have a few choices when it comes to rolling over your 401k plan and to learn more visit Get 401k Rollover Info.

Stock market investing for dummies helps to provide all the necessary knowledge that is needed by a stock market beginners to invest wisely in the stock market. The aim is to make sure that you have enough understanding of the stock market such that you can make intelligent decisions yourself without paying hefty fees for stock market advisors.

If you are among those who have lost their jobs recently, you may have a 401k that you'll have to decide what to do with. In this post, 401k Rollover to IRA, you'll learn some of the options available to you to guide you to the best decision for you.

Trying to make a decision on what the right investment strategy is for you can be a difficult task for anyone, especially right now. But Stock Market Investing Guide makes that decision a little bit easier. They will help you understand complex investment strategies that you can put to work in your portfolio now.

Saving Cash Tips Blog has some ideas for starter investors out there with its post, Best Ways To Invest With Little Money. Using these ideas, you can get started investing with as little as $5 to $500. Believe it or not, there are places to make your money work for you even with small amounts."

If you find any resources you think my readers maybe interested in, feel free to send them in and I'll check them out.

Saturday, February 6, 2010

Thirty Day Stock Market Investing Challenge

OK everybody. Today, I wanted to talk about my new Thirty Day Stock Market Investing Challenge. Each day, I take a look at investing in the stock market, the first question I ask myself is which stock do I pick? There are so many to choose from, it's a difficult task. You can narrow down the field by using stock market screens but even in the Investor's Business Daily and on, there are a ton of screens you could review each and every day to pick out winners. It takes a few hours to do that if you do it by hand. If you don't want to do it by hand, then you can always use there custom stock screener but if you are just starting out, it's kind of a hefty price of a $1,000 a year.

In doing my research, I picked up the phone and called the IBD customer service line and talked to them about how to develop watch lists and which screens to use. The guy I talked to told me that only screen he uses is the IBD 100. I thought that was interesting. He talked to me about the need to keep it simple and not to overcomplicate things and that made a lot of sense. However, when I look at the IBD 100, I remember reading Stockbee's blog and he talked about in his opinion, more winners come from the IBD Top Composite 200 stocks. This is a list of stocks that have a composite rating of 96 or better. He went as far as to lay out a specific strategy called How To Beat The Market For $1.25 Per Week.

The strategy he outlined seemed simple and easy enough. I was hooked. The more I thought about it though I wondered, does it really work. No one in the comments seemed to have tested it, except for one guy who said he was losing pretty big using that strategy. Now, I do want to state that with any strategy you can lose money. Investing is a risky business and even with a sound investment strategy, you can lose your investment capital.

After giving it some thought, I thought that of all the stock screens you can run to scan for specific characteristics appearing in stocks, the resulting stocks on that lists can be winners or losers. But if you focused all of your time on one specific screen ALL of the time, you could probably learn to find winning stock picks. Sometimes you'd have great success and others not so great. I think it would depend on the general market direction and stocks leading the market at that time.

So, just like the guy at IBD, I thought I'd focus on one screen, the Top 200 Composite Stocks. Although, what I am going to do, is follow the strategy of Stockbee and we will see how it actually performs using the steps he recommends. Here's exactly what I am going to do over the next 30 trading days.

Each day, I am going to identify the top 200 composite stocks with a composite rating of 96 or higher.
Within those stocks, I am going to identify those stocks that increased in price by more than 2%.
  • I will confirm that the trading volume was over 100,000 shares for the day.
  • I will make sure each stock was volume was greater than the day before.
  • I will buy $1,000 of that stock the next day in a stock simulator that you can watch.
  • I'll run each stock through completion until I am stopped out.
  • We'll keep a tally of each stock and see what kind of expectancy we get using this approach.

Now, in reading the comments of his three part series, there were a number of questions that came up by his readers. This brought up other topics like how much float the stock had and a 65 trading day growth rate as well as how to set up your stop loss limits. As we go along, I'll spend some time talking about those and some other issues like when to trade, whether intraday or after the close and more.

I think the real benefits of this exercise will be two fold. We can learn the following:
  • How to pick stocks
  • How to manage your investment system

By taking a small universe of stocks and picking what we feel to be winners, we can go through the motions of how this process actually plays out. You see, I think that alot of people think that it would be cool to make money in the stock market, but very few actually want to put in the work. That's what we are going to do here. Look at this as practicing the fundamentals like an athlete would do. We are not going to use real cash in this challenge, only a simulator. This will allow us to learn from our mistakes without spending any money.

Now, is this the same as using REAL money. No it is not. But, I think the lessons we can take away from it will help us improve substantially.

OK. Let's start with today's results. This is Saturday, February 6 and the top 200 list came out Thursday. I've got a subscription to the etables premium service with the and so I just pulled up the top composite stocks. There were 300 of them. 207 of them had a composite rating of 96 or better.

Stocks that were up in price greater than 2%, >100,000 volume, up in volume over the previous day


There were 21 stocks to review today. Now, here is where it gets a little unclear, because we have 21 stocks that met our criteria. How do you whittle it down. In the comments, he says to narrow down the stocks by the number of shares that float (shares that can actually be traded) and by the smallest price growth percentage in the last 65 trading days (the last quarter).

In one section he says to sort by float first and then in another he says to sort by 65 day growth rate. I was a little confused on what he meant, so I went with float because he says he likes to trade shares that have under 25 million of float.

Five stocks today that had the lowest float


After that, he says to pick the one with the lowest 65 trading day growth rate.

Stock with the lowest 65 day growth rate

Interactive Intelligence (INN), 17.27 was up 2.55% today on volume 94.59% above it's 50 day average. It found support at it's 200 day moving average line and bounced up. Technically, it doesn't appear to have the standard chart pattern we might be looking for like the cup with handle or flat base and it's below it's 50 day moving average line. Here's a chart.

Stock Market Investing Day one picks will be ININ.

So, what we will do is put in a buy order in the simulator to see what happens and talk to you again then. Tomorrow, I'll talk about the simulator set up. Each day we will do this and see what kind of luck we have. Keep in mind that the market is in a correction right now, so this will probably be a volatile experiment I am guessing.

Tuesday, February 2, 2010

Stock Market Investing Today Wrapup

Hey everyone. Today's the first of what I hope to be several stock market investing today wrap up reports. Each night after the market closes, I'm going to read the Investor's Business Daily to develop my stock market ideas and start using the simulator over at the Virtual Stock Exchange to illustrate what I am doing. These exercises are not buy recommendation's but are just more of a way to develop your investment strategy.

The first part, for me at least, in starting my stock market investing program, was only investing when the market is in up trend. Currently, the market is in a correction and while the market rallied today, it now must exhibit what's called a follow through day before it's clear to start investing. If you have read any CANSLIM theory, you'll know that it's been documented that if the market is in a downtrend, three out of four stocks will follow the market down with it.

Therefore, rule #1 is this:


Now, what do you do when the market is in a downtrend. Well, that's the time to turn your attention to developing a quality stock watch list so that when the market turns, you'll be ready.

Here's what I uncovered today as my stock to highlight today.

Medifast Inc (MED), $17.97, is the first stock to highlight on my site based on the screens I've been setting up. I'm not sure that I like it's chart pattern and it's been beaten down over 50% off of it's 52 week high. But, it showed strong price and volume action up 7.93% on 100.69% change in volume from it's 50 day moving average. It's approaching it's 200 day moving average which if it breaks it might propel it higher but this is speculation on my part not based on experience.

Here's a chart:

Other stocks of interest tonight:


Poor Man's Stock Market Investing Challenge Update:

Today kicked off my challenge and it was good to see that BrianABeck88 started off right away making some trades to see what he can do. I'll be keeping an eye on those who join the challenge. Expect it to be quiet for a while but one day there will be others who join the challenge.

My status in the challenge is that I am on the sidelines until the market turns towards and uptrend.

Good luck!