Terminology

Last updated: 5/13/2024 added watchlist section

This will cover the various terms used in the daily report and Discord server.

Watchlist
Timeframes
Report Terminology
• Bullish Gapper
• Change of Character
• Chop
• Exhaustion Gap
• Runaway Gap
• Breakaway Gap
• Bull Flag
• Capitulation
• Higher Low
• High Volume Close (HVC)
• Trend Bar
• Range Expansion
• Inside Day
• Relative Strength (RS)
• Earnings Gapper
• Trigger
• Stop
• Unfilled Gap
• Earning Report
• Magnificent Seven (M7)
• Bullish
• Bearish
• Volatility
• Stage Analysis
• Stage 1
• Stage 2
• Stage 3
• Stage 4

Bulk List - These are stocks that have recently shown powerful moves higher but lack a tradable setup. I keep an eye on them, hoping for a setup to develop. If the chart begins to deteriorate, they're removed from the list.

Focus List - This the watchlist I’m taking into the next trading day. Its important to note that being on this list doesn't mean I'll necessarily buy them if they break out. I'll only do so if the price action aligns with my entry criteria at the time of breakout.

Bullish Gappers List - These are stocks that have recently seen a positive reaction to their earnings reports, resulting in significant gaps higher. These stocks may experience Post-Earnings Announcement Drift (PEAD) making for great potential pull back buys. You can dive deeper into this concept by watching our educational workshop on Market Cycles & Situational Awareness, where we discuss the topic more in depth. This link will take you directly to that section of the workshop.

Weekly - Used for identifying the long-term trend (Primary Trend) in trend analysis.

Trends are found on all timeframes, but what is important to understand is that longer-term trends wield greater power and influence. The Weekly chart is where the primary trend is found. Aligning yourself with this primary trend is very important as its going to offer the lowest risk and highest probability trades. If the primary trend is up, look for long opportunities; if down, do the opposite. Its important to remember the primary trend, identified on the weekly timeframe, reigns supreme as the most influential trend, and has the most influence on price.

On the weekly timeframe, I rely solely on one moving average: the 30 Simple Moving Average (SMA). This average stems from the Stage Analysis Method, which is geared towards pinpointing a stock's position within its primary trend at any given moment. I highly recommend reading Secrets for Profiting in Bear & Bull Markets to grasp this method thoroughly. It's a gem for traders and an even greater asset for investors seeking to identify market bottoms during bearish periods and maintain an objective view of charts.

The essence of this method lies in helping us understand the broader picture, aiding in managing expectations and positioning ourselves on the right side of the market. My bullish sentiment on the markets across social media during the early months of 2023 stemmed from my confidence in this method. I simply adhered to the principles of the Stage Analysis method. Refer to the picture below for an overview of the cycle.

Stage 1: Accumulation, Market Bottom

Stage 2: Primary Uptrend

Stage 3: Distribution, Market Top

Stage 4: Primary Downtrend

Daily - Used to identify the intermediate term trend (Secondary Trend) in trend analysis, actionable pivot points, and position management.

30 min - Used for intraday analysis and structure analysis.

10 min - Used for intraday analysis and trade execution.

Report Terminology

Click on bold text for examples or additional information.

Bullish Gapper

A large gap higher on heavy volume.

Change in character

Abnormal price action showing a potential supply/demand shift in the stock.

Chop

Sideways trendless price action.

Exhaustion Gap

A gap in price action created late during a stocks trend where it opens significantly higher than the prior day’s closing price. This can lead to the last extension of a stocks intermediate term trend.

Runaway Gap

A gap in price action that occurs after a breakaway gap and reinforces the trend's direction.

Breakaway Gap

A gap in price action created early in a stocks trend where it opens significantly higher than the prior day’s closing price.

Bull Flag

A sideways consolidation or shallow pullback after an initial move/trend upwards.

Capitulation

An extremely heavy volume even that occurs at the end of a major downtrend.

Gap Support

When a stock finds support at the bottom of a prior gap.

Gap Resistance

When a stock finds resistance at the top of a prior gap.

Higher Low

A significant low in market structure that is higher than the previous significant low.

High Volume Close (HVC)

The Closing price of a very high volume day, often after earnings reports or significant news.

Trend Bar

A strong candle with a good closing range (little to no wick) and range expansion, signaling strength. A bearish trend bar is the inverse.

Range Expansion

A day where the price rises more significantly than the average of the preceding 7-10 days. For instance, if a stock typically moves up by 5% over a 10-day period, a strong day would see it closing up by 10% or more.

Inside Day

When price action is completely contained in the prior day’s range from high to low.

Earnings Gapper

A large gap up, often after earnings/news that signals that Wall Street was caught off guard.

Relative Strength

A stock showing technical strength against the price performance of major indexes (QQQ, SPY, IWM).

Trigger (Pivot Point)

Price level used for entry where momentum is expected to shift.

Stop Loss

A pre-determined level used for exiting a trade.

Unfilled Gap

A Gap that has not been filled by later price action. This is a sign of technical strength if the result of a gap up. Conversely, it suggests weakness if there's a gap-down.

Earnings Report

An earnings report is a financial document released by a company, usually on a quarterly basis, that summarizes its financial performance during a specific period. Earnings reports frequently serve as catalyst that shape the intermediate term trend.

Magnificent 7 (M7)

The most dominant mega-cap tech companies which include Apple, Alphabet, Microsoft, Amazon, Meta, Tesla, and Nvidia. They heavily influence the NASDAQ 100 (QQQ) and can be tracked using ticker $FNGU.

Bullish

The belief a stock or the overall market will go higher.

Bearish

The belief a stock or the overall market will go lower.

Volatility

The rate at which the price of a stock increases or decreases over a particular period.

Terminology

Last updated: 5/13/2024 added watchlist section

This will cover the various terms used in the daily report and Discord server.

Bulk List - These are stocks that have recently shown powerful moves higher but lack a tradable setup. I keep an eye on them, hoping for a setup to develop. If the chart begins to deteriorate, they're removed from the list.

Focus List - This the watchlist I’m taking into the next trading day. Its important to note that being on this list doesn't mean I'll necessarily buy them if they break out. I'll only do so if the price action aligns with my entry criteria at the time of breakout.

Weekly - Used for identifying the long-term trend (Primary Trend) in trend analysis.

Daily - Used to identify the intermediate term trend (Secondary Trend) in trend analysis, actionable pivot points, and position management.

30 min - Used for intraday analysis and structure analysis.

10 min - Used for intraday analysis and trade execution.

Click on bold text for examples or additional information.

Bullish Gapper A large gap higher on heavy volume.

Change in character Abnormal price action showing a potential supply/demand shift in the stock.

Chop Sideways trendless price action.

Exhaustion Gap A gap in price action created late during a stocks trend where it opens significantly higher than the prior day’s closing price. This can lead to the last extension of a stocks intermediate term trend.

Runaway Gap A gap in price action that occurs after a breakaway gap and reinforces the trend's direction.

Breakaway Gap A gap in price action created early in a stocks trend where it opens significantly higher than the prior day’s closing price.

Bull Flag A sideways consolidation or shallow pullback after an initial move/trend upwards.

Capitulation An extremely heavy volume even that occurs at the end of a major downtrend.

Gap Support When a stock finds support at the bottom of a prior gap.

Gap Resistance When a stock finds resistance at the top of a prior gap.

Higher Low A significant low in market structure that is higher than the previous significant low.

High Volume Close (HVC) The Closing price of a very high volume day, often after earnings reports or significant news.

Trend Bar A strong candle with a good closing range (little to no wick) and range expansion, signaling strength. A bearish trend bar is the inverse.

Range Expansion A day where the price rises more significantly than the average of the preceding 7-10 days. For instance, if a stock typically moves up by 5% over a 10-day period, a strong day would see it closing up by 10% or more.

Inside Day When price action is completely contained in the prior day’s range from high to low.

Earnings Gapper A large gap up, often after earnings/news that signals that Wall Street was caught off guard.

Relative Strength A stock showing technical strength against the price performance of major indexes (QQQ, SPY, IWM).

Trigger (Pivot Point) Price level used for entry where momentum is expected to shift.

Stop Loss A pre-determined level used for exiting a trade.

Unfilled Gap A Gap that has not been filled by later price action. This is a sign of technical strength if the result of a gap up. Conversely, it suggests weakness if there's a gap-down.

Earnings Report An earnings report is a financial document released by a company, usually on a quarterly basis, that summarizes its financial performance during a specific period. Earnings reports frequently serve as catalyst that shape the intermediate term trend.

Magnificent 7 (M7) The most dominant mega-cap tech companies which include Apple, Alphabet, Microsoft, Amazon, Meta, Tesla, and Nvidia. They heavily influence the NASDAQ 100 (QQQ) and can be tracked using ticker $FNGU.

Bullish The belief a stock or the overall market will go higher.

Bearish The belief a stock or the overall market will go lower.

Volatility The rate at which the price of a stock increases or decreases over a particular period.