MarketSmith and Your Workflow – A Series – Part One
This topic will be discussed in parts, as a series of articles on using MarketSmith in your daily workflow.
MarketSmith is the brainchild of Investor’s Business Daily founder, William O’Neil. MarketSmith software is designed to help investors generate and evaluate investment ideas. It evolved from the Daily Graphs Online investment research service.
MarketSmith Daily Scan
With market volatility affecting investment decisions, especially since February, we like to scan for ideas and trends on a daily basis. This week we have been using MarketSmith to ferret out themes.
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Regional banks have shown up on the “Stocks Up on HIgher Volume” scan. When you first open MarketSmith you are presented with the screen below.
Note, more stocks are down on volume, compared to stocks higher on volume. If we are looking for long ideas, we might look at the latter group of candidates. To put it another way, we are looking for stocks exhibiting “relative strength.”
MarketSmith Workflow – Stocks Up on Volume
A quick analysis shows 60 stocks, with an abundance of regional banks breaking higher during earnings season. One might assume banks will benefit from a higher 10-year yield going forward; more on that later.
Since regional banks are populating the “Stocks Up on Volume” scan, we want to check the regional ETF.
Relative strength versus XLF is obvious, with the latter showing some overhead resistance to overcome. Since this checks out, we can go back to our banks and look for swing candidates.
Santander SC – Potential Candidate?
MarketSmith has a number of cool features that can be toggled on and off to suit your needs. Highlighted is a “Warren Buffett” checklist, reflecting “Pass” on 75% of Berkshire’s criteria.
Price is breaking higher so this could be something we might consider as a swing since the stock is trading post-EPS. Future earnings are noted in the bottom right corner, “EPS-Due-Date.”
We would then wait for the Opening Range, to measure market temperament. For the purposes outlined herein, if financials and regionals continue higher we would consider an entry (example only).
In upcoming articles, we’ll cover more features, like alerts, for those of you with day jobs.
We’d also like to see the markets push higher, to provide a tailwind.
Join us for our LIVESTREAM broadcast during market hours to discuss these stocks and other ideas that might interest you.
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