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ICT Mentorship Core Content - Month 10 - Stock Trading - Building Sell Watchlists
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ICT Mentorship Core Content - Month 10 - Stock Trading - Building Sell Watchlists

Building Cell Watch Lists

In this lesson, we will be focusing on building cell watch lists for shorting stocks. We will be using the Dow Jones Industrial composite stock list and looking at the bearish months and any consolidation month in between.

Ideal Short Swing Setups

  • The months of January and May through July are ideal short swing setups.
  • Stocks that are trending lower on a weekly prior to this setup are ideal.
  • Weak stocks will have obvious bearish market structure.

Stock Selection Process

  • We'll be trying to narrow the selection down to two to four companies during the stock selection process.
  • Leadership stocks that are aggressively sold by institutions will be found to fail to rally higher during bearish months when the three major indices rally.

American Express Stock Analysis

  • American Express (AXP) was in heavy distribution between May and August 2015.
  • During this time period, while the markets were bullish, there was no gravitational pull for stocks to pull lower or fail to make a higher high at least on this specific stock.
  • The Dow Jones leading up into May was making higher highs while AXP shares were seeing failure to rally comparably.
  • This caused a seasonal height and price traded off rather aggressive for around $80 a share all the way down to almost $50 a share.

Timing the Stock Market

In this section, the speaker discusses how to time the stock market by looking at institutional order flow and seasonal influences.

Caterpillar Inc. (CAT)

  • Institutional order flow in the weekly chart was bearish between May and August 2015.
  • Dow Jones was making higher highs at the same time Caterpillar was failing to make a higher high.
  • Caterpillar's share price moved from almost $90 per share down to almost $55 per share during this period.

Chevron Corporation (CVX)

  • Institutional order flow was bearish between May and August 2015.
  • Dow Jones was making higher highs at the same time Chevron shares were making lower highs.
  • Chevron's share price moved from $110 per share down to $70 per share during this period.

Exxon Mobil Corporation (XOM)

  • Institutional order flow was bearish between May and August 2015.
  • Dow Jones was making higher highs at the same time Exxon Mobil shares were failing to make higher highs.
  • Exxon Mobil's share price moved from almost $90 per share down to almost $66 per share during this period.

Walmart Inc. (WMT)

  • Institutional order flow was bearish on a weekly basis between May and August 2015.
  • Dow Jones was making higher highs at the same time Walmart was failing to make higher highs.
  • Walmart's share price moved from $80 per share down to almost $56 per share during this period.

Importance of Price Action

In this section, the speaker emphasizes the importance of understanding price action in timing the stock market.

Technical Analysis

  • It is important to find an area where a price wants to rally away, such as a J-hook or market protractionary state.
  • Technical analysis can help identify these areas and indicate when to sell the rally.

Consistency in Institutional Order Flow

  • Institutions have a rule-based idea and program that they follow consistently.
  • By understanding generic characteristics seen in price action, we can track smart money and anticipate their movements.
  • This method can be passed on to future generations as a way to build individual retirement accounts or add additional income without having another job.

Understanding the General Market with Asset Class Studies

In this section, the speaker emphasizes the importance of understanding asset classes to understand the general market. The NASDAQ 100 is assigned as a homework assignment for the week and participants are encouraged to contribute or study privately.

NASDAQ 100 Homework Assignment

  • Participants are encouraged to study the NASDAQ 100 stocks by searching for them on Google.
  • Use the same parameters outlined in the buy and sell models for both watch lists.
  • Look at a specific time of year and institutional overflow conditions on weekly charts that align with seasonal tendencies.

Evaluation for Stock Selections

  • The next lesson will cover evaluation for stock selections, incorporating options, and how all this information can be used in terms of asset classes.
  • A bonus lesson will also be provided on why understanding asset classes is beneficial.

Overall, this section emphasizes the importance of studying asset classes to understand the general market. The NASDAQ 100 is assigned as a homework assignment and participants are encouraged to use specific parameters when creating watch lists. The next lesson will cover evaluation for stock selections and how all this information can be used in terms of asset classes.

Playlists: 2017 ICT Private Mentorship Core Content Month 10
Video description

2017 Premium ICT Mentorship Core Content Video Lectures Audio and visuals are exactly as they were distributed in June 2017. CFTC RULE 4.41 – HYPOTHETICAL OR SIMULATED PERFORMANCE RESULTS HAVE CERTAIN LIMITATIONS. UNLIKE AN ACTUAL PERFORMANCE RECORD, SIMULATED RESULTS DO NOT REPRESENT ACTUAL TRADING. ALSO, SINCE THE TRADES HAVE NOT BEEN EXECUTED, THE RESULTS MAY HAVE UNDER-OR-OVER COMPENSATED FOR THE IMPACT, IF ANY, OF CERTAIN MARKET FACTORS, SUCH AS LACK OF LIQUIDITY. SIMULATED TRADING PROGRAMS IN GENERAL ARE ALSO SUBJECT TO THE FACT THAT THEY ARE DESIGNED WITH THE BENEFIT OF HINDSIGHT. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFIT OR LOSSES SIMILAR TO THOSE SHOWN Trading performance displayed herein is hypothetical. Hypothetical performance results have many inherent limitations, some of which are described below. No representation is being made that any account will or is likely to achieve profits or losses similar to those shown. In fact, there are frequently sharp differences between hypothetical performance results and the actual results subsequently achieved by any particular trading program. One of the limitations of hypothetical performance trading results is that they are generally prepared with the benefit of hindsight. In addition, hypothetical trading does not involve financial risk, and no hypothetical trading record can completely account for the impact of financial risk in actual trading. For example, the ability to withstand losses or to adhere to a particular trading program in spite of trading losses are material points which can also adversely affect actual trading results. There are numerous other factors related to the markets in general or to the implementation of any specific trading program which cannot be fully accounted for in the preparation of hypothetical performance results and all of which can adversely affect actual trading results. U.S. Government Required Disclaimer – Commodity Futures Trading Commission Futures and Options trading has large potential rewards, but also large potential risk. You must be aware of the risks and be willing to accept them in order to invest in the futures and options markets. Don’t trade with money you can’t afford to lose. This is neither a solicitation nor an offer to Buy/Sell futures or options. No representation is being made that any account will or is likely to achieve profits or losses similar to those discussed on this web site. The past performance of any trading system or methodology is not necessarily indicative of future results. Trade at your own risk. The information provided here is of the nature of a general comment only and neither purports nor intends to be, specific trading advice. It has been prepared without regard to any particular person’s investment objectives, financial situation and particular needs. Information should not be considered as an offer or enticement to buy, sell or trade. You should seek appropriate advice from your broker, or licensed investment advisor, before taking any action. Past performance does not guarantee future results. Simulated performance results contain inherent limitations. Unlike actual performance records the results may under or over compensate for such factors such as lack of liquidity. No representation is being made that any account will or is likely to achieve profits or losses to those shown. The risk of loss in trading can be substantial. You should therefore carefully consider whether such trading is suitable for you in light of your financial condition. If you purchase or sell Equities, Futures, Currencies or Options you may sustain a total loss of the initial margin funds and any additional funds that you deposit with your broker to establish or maintain your position. If the market moves against your position, you may be called upon by your broker to deposit a substantial amount of additional margin funds, on short notice in order to maintain your position. If you do not provide the required funds within the prescribed time, your position may be liquidated at a loss, and you may be liable for any resulting deficit in your account. Under certain market conditions, you may find it difficult or impossible to liquidate a position. This can occur, for example, when the market makes a “limit move.” The placement of contingent orders by you, such as a “stop-loss” or “stop-limit” order, will not necessarily limit your losses to the intended amounts, since market conditions may make it impossible to execute such orders.