The Professor s Position Trading Methodology Trading the Turns

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1 The Professor s Position Trading Methodology Trading the Turns Hank Swiencinski October 17, 2013

2 Disclaimer The statements, opinions, buy and sell signals, and analysis contained in this presentation are provided for general information and education only. Opinions, estimates, buy and sell signals, and probabilities expressed in this presentation constitute the judgment of the presenter, and are subject to change without notice. The information contained in this presentation is expressed in good faith, but its accuracy is not guaranteed. Nothing contained in this presentation is intended to be, nor shall be construed as, investment advice, nor is it to be relied on in making any investment or other decision. Prior to making any investment, you are advised to consult with your broker, investment advisor, or other appropriate tax or financial professional to determine the suitability of any investment. Neither the presenter, Henry J. Swiencinski, nor AIQ Systems Inc., shall be responsible or have any liability for investment decisions based upon, or the results obtained from, the information provided.

3 Outline Knowing when to trade when the odds are heavily in your favor Technical indicators Basic Strategy for Trading the Turns Using the Member s Watch List to identify stocks Examples

4 The Four Best Times to Trade #1: When the market or a stock is changing direction #2: Small change in the A-D oscillator. Small change = BIG MOVE (>100 Dow points). #3: When the market is trending (Rifle Trades) #4: When it s not Scalp Trades

5 How Stocks Change Direction Basic Elliott Wave Theory says that stocks move up in five waves and then correct in three waves down. The five up waves form a Pattern called Three Highs to a Top (THT) The waves look something like this..

6 Elliott Waves Primary Trend Five Waves a b c Correction Three Waves 2 The Primary Trend always consists of 5 waves

7 Trends vs. Non Trends Aggressive, larger positions, adding to position DMI, MACD, P-Volume Trending Cautious scalp trades Smaller positions RSI Wilder Not Trending - Correcting - Look for a change in direction

8 Three Highs to a Top DMI stays positive

9 When things get scary, find safety!

10 How Apple Changed Direction The stock moved from a Major Uptrend to a Major Downtrend After Three Highs to a Top, the DMI turned negative During the decline, the 50 crosses below the 200 At this point, institutions won t touch it It is a falling knife, NEVER a Buy You need to wait for signs that things could be changing

11 Technical Indicators

12 Three Technical Indicators Direction: The Directional Movement Indicator (DMI) Math formula developed by Wells Wilder, used to determine direction of a stock Momentum: Moving Average Convergence Divergence (MACD) Gas: Positive Volume Indicator

13 Setting up the Indicators from AIQ or the Internet Use live data from AIQ Alerts screen or freestockcharts.com Basic trading screen should have: - a Daily Chart set for one year s worth of data - DMI set for 14 periods - MACD set for Set signal line to 1. - P-volume or Positive Volume Indicator with the moving average set for 21 periods.

14 Using the MACD Most traders do not understand how to use the MACD Positive momentum: when the MACD indicator is above the zero line The standard MACD is I use Using the 1 eliminates the signal line. Also look for divergences. They are very useful when using the MACD.

15 Rules Rule #1: Buy when all three indicators turn positive Rule #2: Sell when all three indicators turn negative. To protect profits, Sell when 2 of the 3 indicators are negative Do the opposite for shorts

16 Daily Chart

17 60 min chart Exit Enter

18 The Dow Primary Trend is DOWN < 200 Elliott Waves Five waves down 3 5,3 5, 1

19 The Five Steps in Trading a Positive Turn Look for stocks with a Three Lows to a Bottom (TLB) Pattern Establish an initial position when PT indicators turns positive Exit the trade after the Rope Jump, or when the indicators turn negative Wait for a Pullback Establish a Basic Position when the PT indicators turn positive

20 Three Lows to a Bottom

21 Buy Initial Position when the indicators turn positive Buy Position is a trade only 0 DMI turns positive

22 Wait for a Rope Jump 200 period exponential moving average 50 period ma Price Jumps the Ropes The Rope Jump indicates a potential Wave 1 DMI turns positive 0

23 Look for a Pullback 200 period ma 50 period ma Wave 1 The Blade of the Hockey Stock forms indicating Wave 2 DMI negative 0 Exit trade

24 Look for a Pullback 200 period ma 50 period ma Wave 1 Wave 2 DMI Wave 2 enables the 50 to move above the 200. When this occurs, the stock is now in an Uptrend 0

25 Buy Basic Position on DMI turn 200 period ma period ma 2 Buy Establish Basic Position when DMI turns positive DMI 0 Buy

26 Targets Second Target First Target Buy First target is always interim high between first two lows

The Dow Primary Trend is DOWN 2 2 50 < 200 1 1 4

27 The Dow Primary Trend is DOWN < First Target 4 Three Lows to a Bottom 3 5,3 5, 1

28 After Three Lows to a Bottom, Look for a turn C 1 5,3 2 Hockey Stick DMI Positive

29 Occidental Petroleum 2 30 points Target Three Lows to a Bottom points

30 Occidental Petroleum Hits Target of 70+ Note small Hockey Stick

31 Occidental Petroleum Hit target of 80! Hit first target of 70+ Formed another Blade Now Developing Three Highs to a Top DMI negative

32 Classic Reversal Pattern First Target Buy First Target Buy Three Lows to a Bottom Sometimes this occurs

33 Rockwell Collins 1 Three Lows to a Bottom 2 3 DMI is negative

34 Rockwell Collins This is what we expected.. 5 But DMI stayed negative keeping us out

35 Blade Development Classic A-B-C retracement in Wave 2 Hockey Stick 1 Blade b a c, 2 Blade must have two lows

36 Basic Strategy for Trading a Positive Turn Identify stocks that are forming a Three Lows to a Bottom (TLB) Pattern Establish initial position (a trade) when the PT indicators turn positive After initial purchase, look for stock to Jump the Ropes (move above the moving averages) Jumping the ropes identifies the move as a possible wave 1. Exit the trade after wave 1 completes, and wait for the Blade to develop. Basic Position is established at start of wave 3.

37 Rope Jump

38 Make a SIGN When the facts change, I change my mind. Joan Trawick

39 Member s Watch List SA Seabridge Gold Inc MAKO MAKO Surgical Corp SAM BOSTON BEER INC BIDU BAIDU COM INC TSLA Tesla Motors TDC TERADATA CORP DECK DECKERS OUTDOOR CORP PSE Pioneer Southwest Energy Partners MYL MYLAN LABORATORIES IN GPOR GULFPORT ENERGY CORP KKD Krispy Kreme Doughnuts RGR Sturm Ruger CLF Cleveland Cliffs Inc AAPL Apple Computers Inc RGLD ROYAL GOLD INC NFLX NETFLIX COM INC RTN Ratheon Company BUD Anheuser- Busch InBev QLD PROSHARES - Ultra QQQ ADS ALLIANCE DATA SYS CORP MCO MOODYS CORP EMR Emerson Elec Co PRU PRUDENTIAL FINL INC LMT Lockheed Martin Corp CJES C&J Energy Service Inc DOW Dow Chem Co CMI CUMMINS INC TKR Timken Co BBBY Bed Bath & Beyond SLB Schlumberger Ltd RCL ROYAL CARIBBEAN CRUISES LTD

42 Three Lows to a Bottom Rope Jump

43 Rope Jump

188 62 63 92 142 Buy signal generated with 52 stocks High was 98 # of

44 Buy signal generated with 52 stocks High was 98 # of stocks highlighted by Professor Algorithm > 50 usually leads to UP trend

45 Summary Use the Member s Watch List to find stocks that are starting to rise after a Three Lows to a Bottom Pattern. Establish an initial position when the PT indicators turn positive Stay in the trade as long as the PT indicators remain positive Look for a rope jump, indicating wave1 up. Exit the trade when the PT indicators turn negative Wait for the pullback to form a Blade Once the Blade completes, establish a Basic Position when the PT indicators turn positive

46 For More Information Call or Barbara Greer at AIQ Sales: Phone: AIQ s OneMinuteStock.com Cum Laude Service: Dates for future seminars and webinars. The Professor s Book: One Minute Guide to Stock Management - Available at OneMinuteStock.com

47 Thank You

Technicals & Time Frame

Technicals & Time Frame Advanced Charting Neither Better Trades or any of its personnel are registered broker-dealers or investment advisers. I will mention that I consider certain securities or positions to be good candidates