We’re down to six qualifiers for our Standard Screen of Growth Stocks. This hasn’t been so low for years. But this is good.

The broad market has mostly gone sideways for 20 months, making it very difficult to have conviction in a bias. We’ve held a neutral bias for nearly that entire period. It’s kept our powder dry. We’re ready to pounce.

These corrections separate the strong from the weak. New leaders will assert themselves. Of course, there’s always the possibility that those leaders will be bears.

The recent sell-off has triggered a Sell Bias for our strategy. Multiple distribution days suggest institutions are taking cover. Experience tells us the long, drawn out stagnation led to an abundance of pent up selling interest just waiting for a significant lower move to bail, thus the magnitude of the move.

The Sell Bias won’t change until we see institutional follow through in the form of a clear accumulation day, where an up day’s volume clearly outpaces the previous day’s. We begin looking Tuesday to give a good four days from last week’s bottom for short seller’s to clear out.

The market’s looking to this Fall. All hands on deck. Fund managers are back in the groove and ready to realign their holdings. Paying close attention to volume flow  will reveal their playbooks.

Standard Screen 

  • EPS > 20% Quarterly
  • Sales > 20% Quarterly
  • ROE > 15%
  • Price > 50 and 200 SDMA’s
  • Price > 10
  • Average volume > 300,000
  • Market Cap > $300mil

Ticker Company Industry Country Chart
ABMD ABIOMED, Inc. Medical Appliances & Equipment USA PB
AHS AMN Healthcare Services Inc. Specialized Health Services USA PB
SCMP Sucampo Pharmaceuticals, Inc. Drug Manufacturers – Other USA BO
SKX Skechers USA Inc. Textile – Apparel Footwear & Accessories USA PB
SNN Smith & Nephew plc Medical Appliances & Equipment United Kingdom L-BASE
TREE LendingTree, Inc. Mortgage Investment USA PB
  • BASE = Base
  • L-BASE = Lower Base
  • PB = Pullback
  • NH = New High
  • N = Nada