What screener to use?

My personal favorite is one that was created by Dr. Stephen Cooper
Using the Investors Business Daily (IBD) and a few key criteria to choose which stocks are doing fundamentally very well.

Currently I use the Options Xpress screener and I will go into detail on how I use it in a future post.

Here is a list of screeners available on the internet - by no means is it a complete list just some of the more popular ones. Most of the have pre-screens which are screens that are very popular and used by a lot of traders and investors to pick stocks.

Stock Charts
Yahoo Screener
MSN Money

and of course Big Charts under the Big Reports link.

These are just the most popular free ones. There are many more paid for screeners but I will warn you that many of them that proclaim to be the little black box screener will work for only certain market conditions and then they fail. I stick with the free screeners and learn how to use them.

More on this later.

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Creating a Watchlist

I have said this before but the first step in creating a watchlist is to have a stock screener - reason? Too many stocks about 13,000 or so of which about 2500 are optionable to know which is the best you need a way to sort them.

So how do we sort out the best optionable stocks? With a screener.

And another important question is why create a watchlist anyway? Because just because you have a good stock to trade from a screener does not mean it is the right time to trade it. Each stock has its own characteristics and its own patterns daily, weekly, monthly and you need to “watch” the stock to discover those patterns and to choose the correct time to get into a trade.

So the first step is to pick a screener and then what criteria to use for a screener to pick the correct stocks.

Well let me say that it really does not matter exactly what criteria you use to pick stocks as much as it does to watch the stock to know how it trades. Watching the stock is much more important. So you could just choose what your stock broker recommends or what your neighbor recommends or what CNBC is recommending BUT do not follow the recommendation. Watch the stock first - get a feel for how it trades it may take a few weeks to get the feel for that individual stock. Do not get caught up in the hype, even if it gets away from you several things can happen that will allow you to trade 1. The stock will come back or 2. it will give you another signal or 3. another better trade will come along. Stick to watching the stocks. Even ones that you have placed through an intense fundamental analysis screener, still watch the stock for a few weeks to trade it. You will be much happier with a watchlist and checking the watchlist daily than just going on recommendations or a screener alone, you will be much more successful.

Screeners - tomorrow!

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Back to Business

Let me apologize for the last couple of weeks and the lack of good quality posting. OK I did point out the bearish wedge and we all learned from that including how it was broken in the wrong direction. Well the reason for the lack of posting is from some of the changes that will be taking place here in the next couple of weeks. I have been working behind the scenes to provide more information and a better look and to incorporate the upcoming podcasts coming to this site.

So…..I now want to get back to teaching about options and option strategies. Next on the list how to start developing a watchlist! The most common question asked.

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Losing my touch - or am I?

OK I could not have been more wrong about today. Here I was feeling pretty bullish but realizing that it would be difficult to break the all time high given the news and the time of year; however I did not expect today to be the day of realization.

By realization I mean what does it actually mean when the Fed pauses interest rates - in actuality it has little to do with anything - but in the the esoteric big picture it is an indicator as to what the federal government feels about the economy and in this case it thinks that things are pausing from the incredible growth we have had. We have had so many increases that wall street was just waiting and then begging for a pause and then when it happened the stock market kind of just sat there for a little bit and lately we have had a nice rally with all the signs that the Fed was going to continue the pause. - NOW today some realization may have hit home a slow economy is not good for the stock market and today there was some bad news for manufacturing a sign of economic slow down - bad day for the market. However with new support at 11,500 we still closed above it we shall see what happens.

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