How To Find Great Buying Opportunities In A Bull Market

Benzinga

Marc Chaikin, Founder of Chaikin Analytics. Watch the full interview on Benzinga's YouTube channel now.   After 40 years on Wall Street as a trader, stock broker analyst and options trader, Marc founded Chaikin Analytics LLC to deliver proven stochastic analytics to investors and traders, based on the Chaikin Power Gauge, a 20-factor alpha model proven effective at identifying a stock’s potential. Chaikin pioneered the 1st real-time analytics workstation for portfolio managers and stock traders, now part of Thomson Reuters’ institutional workstation, and developed computerized stock selection models and technical indicators, including Chaikin Money Flow, which are industry standards.

Transcript

00:00 There's barely a stock to fret over.

00:04 - No, it's been that, Mark.

00:06 And we were talking about this just even before

00:08 the Netflix and Tesla report.

00:09 And I was making this argument that,

00:10 hey, we're so dang bullish.

00:12 It's probably an argument to be long

00:14 almost every stock going into,

00:16 like if you were just decided,

00:17 every single stock reports, I'm gonna be long it.

00:20 And I'm just gonna play that strategy.

00:22 And I think it would have worked last quarter too.

00:23 You're just gonna buy every stock into the report.

00:26 The ones that go up, go up.

00:27 The ones that go down, the dips off and get bought.

00:29 - So I mean, there's alpha to extract

00:32 from just being long stocks.

00:33 - Well, if you're long tech stocks,

00:36 and we've talked about this, and it's not my concept.

00:39 It's this guy, Ophir Gottlieb out of Chicago.

00:43 - Yeah, we know. - Options trader.

00:45 So, tech stocks tend to see implied volatility go up

00:49 in anticipation of earnings in that two week window.

00:52 And you don't have to stay through earnings.

00:55 If the power gauge is bullish,

00:56 I will stay through the earnings report.

00:59 - Let's see it.

01:00 Okay, so I wanna show two charts.

01:01 First, the SPY.

01:02 This is Chayken Analytics.

01:04 I don't know that we've ever showed this on the screen.

01:06 So we- - Awesome.

01:06 - There you go, let's do it.

01:08 Guys, smash the like.

01:10 - Yeah, we read the chart from the bottom up.

01:12 - All right.

01:13 - Why?

01:14 Because the power gauge ribbon is there.

01:15 So you can see that the power gauge turned bullish

01:18 - Oh, nice. - in mid-March.

01:20 But more importantly, the SPY started outperforming

01:24 the 3000 stocks in the Russell.

01:27 And then right here is Chayken Money Flow.

01:30 And what you see is since January,

01:32 you've had six days of negative money flow.

01:35 Remember, this is an oscillator.

01:37 It's supposed to go below zero

01:38 like it did back in September and October.

01:41 What does this tell me?

01:42 Persistent accumulation in the large cap index.

01:46 And then we go up to the top of the chart

01:48 and where are we finding support?

01:51 21 day exponential average,

01:54 which is a logical place for a strong market

01:57 to find support.

01:58 So where is that now?

02:00 It's about 44.50 on the S&P.

02:04 It's 4.15 on the SPY.

02:09 That implies that the only kind of pullbacks

02:11 you're gonna get are 1.5 to 3%.

02:14 So down to a rising 21 day average.

02:18 Now let's look to the left

02:20 and you see all the stocks in the S&P

02:23 ranked by power gauge.

02:26 But the number that's key is what we call our power bar.

02:29 183 stocks with bullish ratings.

02:32 That's pretty much the max you can get.

02:34 Only 69 with bearish ratings.

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