For
all Intra-day Investment Tables safety limits are provided in
the form of percentages and their ranges. Their purpose is to
signal the Investor of a possible break in trend for individual
security(s) within their respective tables. These safety limits
are further referred to as Opening Trade Deviation Limits.
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Part
of a Day Traders job, besides selecting a potentially winning
group of stocks for the day prior to Market open, is identifying
and effectively eliminating potential problem trades which
may present themselves at the very onset of regular hours
trade. The limits listed below are cautionary limits, with
the intent to warn Investors of potential adverse price
movement when a security's opening valuation falls within
the limit ranges. The limits apply to each security's individual
opening valuation.
The
values for all limits below, and their ranges, are based
on the percent deviation between a security's prior session
close and current opening trade, and are calculated at
market open based on the market's activity prior to open.
The values shown are base values, and may fluctuate from
day to day due to current market conditions.
Investors may easily view opening valuations
for all Individual stocks within the tables through the
use of real time tickers or quote streamers offered by
most online brokerages. A list of current recommendations
is provided at the base of each iTables screen which can
easily be pasted to real-time quote modules.
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| LONG
Position Intra-day |
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For
Securities within the LONG position Investment Tables,
limits are set up as follows:
-
Omit
Limit 1 - (base
range 3% to 5%) In some cases a security may open
higher due to built-up momentum during its prior
session, and general pre-market activity (this
may apply even if the security does not trade in
pre-market), and as a result a security may, with
its opening valuation, have already achieved most,
if not all, of its intra-day gain. When this happens
a security may very well spend the rest of the
day flat, with minor fluctuations up or down. In
such case the security may be omitted from the
current session due to the uncertainty exhibited
by the opening trade valuation. Though the prior
may not always be the case, it may still be a good
idea to omit the security, especially if it is
the only one within its table that exhibits this
behavior.
-
Return
Limit 1 - (base range 5% to 10%) Same
idea as above, but with a more significant deviation
at open. This range usually indicates a possible
reversal for the Intra-day trend. For example,
a security may have such upward momentum during
its prior session (and pre-market - where the market's
own momentum may further help to propel the security
at open), and as a result the opening trade is
substantially higher, suggesting that it has, at
open, achieved a 'peek intra-day gain'. As a result,
it may start to lose some of that 'explosive opening
gain' during the current session, therefore a SHORT
position would be desired in place of the indicated
LONG position. To further alert investors to watch
for these opening valuations red and green arrows
are provided within the MarketMeter
Timing Indicators.
-
Omit
Limit 2 - (base range 10% + ) Same as
Omit Limit 1, but for more severe opening valuations.
When a security's current opening to prior close
valuation is in excess of this value, Investors
are encouraged to omit this security for the current
session. Securities that exhibit this behavior
are rare, and are usually subject to intense media.
- Return
Limit 2 - reserved.
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| SHORT
Position Intra-day |
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The
above limits and their ranges are for securities listed
within the Intra-day LONG position Investment Tables. For
securities listed in the SHORT position Investment Tables,
the same will apply but with negative base values as follows:
-
Omit
Limit 1 - (base range -3% to -5%) In
some cases a security may open significantly lower
due to built-up downward pressure for both the
security and market during the prior session and
pre-market trade (this may apply even if the security
does not trade in pre-market), and based on its
own momentum and market momentum at open, it may
have already achieve most, if not all, of its intra-day
'loss'. This can happen when the security's momentum
is matched with the market's momentum, and as a
result the security may spend the rest of the day
flat, with minor fluctuations up or down. In such
case the security may be omitted from the current
session due to the uncertainty exhibited by the
opening trade valuation. As mentioned above, though
this may not always be the case, it may still be
a good idea to omit the security, especially if
it is the only one within its table that exhibits
this behavior.
-
Return
Limit 1 - (base range -5% to -10%) Same
idea as above, but with a more significant deviation
at open. This range usually indicates a possible
reversal for the Intra-day trend. For example,
a security may have such downward pressure built
up during its prior session (and pre-market) and
as a result opens substantially lower the following
morning, indicating that the security has, at open,
possibly hit a 'hard intra-day bottom'. As a result,
it may start to recover and move up during the
current session, therefore a LONG position would
be desired in place of the indicated SHORT position.
To further alert investors to watch for these opening
valuations red and green arrows are provided within
the MarketMeter
Timing Indicators.
-
Omit
Limit 2 - (base range -10% and lower)
Same as Omit Limit 1, but a more severe range.
When a security's current opening to prior close
valuation is in excess of this value (lower), Investors
are encouraged to omit this security for the current
session.
- Return
Limit 2 - reserved.
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The
above limits are posted within the Investment Tables, and are
updated once each day right after market open (usually by 9:35
AM ET).
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