Watch dog

Every now and then a new tool is created that simply blows your mind. Well, it blew mine anyway. This tool is so good, I can’t leave it alone. I love it and I think you will too. So what is it?

Before getting ahead of myself, I’d like to give you a little background. On October 8, 2010, I wrote an essay called, “Support and Resistance Analysis.” In that essay, I related how three of our top guys took a very expensive trading course just to see what was going on. It cost more than five grand apiece, so when they got back, I asked them what they had learned. They said they learned how to trade using support and resistance analysis. Well, we already taught that stuff in our own Technical Analysis Course, so I wasn’t too overjoyed with their answer. But there was something else they said that struck me. They said the software they were using had essentially no search capabilities and the graphics did not show any support and resistance lines…you had to put them in yourself. Now that was a fine kettle of fish!

They not only had to find good stocks to track; they also had to sit at their computers all day long looking at graphs for trading opportunities. Needless to say, sitting at a computer all day waiting for a stock to penetrate a resistance level or bounce up from a support level was b-o-o-o-o-r-i-n-g. We had to fix that, and now we have with the Watchdog.

The Watchdog is a monitoring, alerting and documentation tool that analyzes pricing data, tick-by-tick, and checks to see if the price has met specific MACD or Support/Resistance criteria. It does all of this in a matter of milliseconds!

For example, I came in this morning and turned the Watchdog on just before the market opened. I set the Watchdog filter to find stocks that were >= $5.00 per share with AvgVol >= 250,000 shares/day and were breaking resistance by >1%. I also set the Watchdog to give me only one report per stock per day.

At 9:31:27 AM, I received an audible alert, an email and a report on my VectorVest 7 RealTime screen that GT had met the criteria of breaking a resistance level at $13.24 per share. I right clicked on the report, clicked on Graph and I liked what I saw, i.e., GT was in rally mode. But it had gapped up at the open, so I didn’t buy it. I first wanted to see if it was going to “fade the gap,” i.e., come back down as so often happens. Indeed, it did.

By 9:35, I had received seven more alerts and by noon, I had received a total of 25 alerts. My goodness, I was blessed with a plethora of choices. But VectorVest is not meant to overwhelm you with choices. So you can sharpen the focus of your stock filter by using WatchLists. You may use the WatchLists already in VectorVest or you can create your own. This feature opens the door to an endless array of possibilities. But that’s not all.

You can also employ the Watchdog in concert with MACD crossovers. In this case, you may filter stocks from the entire database or use WatchLists as described above. At this point, I blew my own mind thinking about what I could do with the Watchdog. For example, I could use it to help manage my portfolio. I often sell Covered Calls on stocks when the MACD signal line crosses in the down direction. But it was a nuisance to check them out all the time. Now, I let the Watchdog do it and I don’t even have to have my computer turned on. It saves me time and helps me make money. No wonder I love The Watchdog.

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