Agenda – March 2014 Market Condition Scott O’Neil Webinar Tuesday 3/25 (1:20 – 24:00): http://www.marketsmith.com/Learn/Webinars.aspx Decision Factors in Volatile Markets Market Trend Portfolio Leading Stocks Chart Patterns & Breakout Strategies Overall Grade for Stock Checkup Q&A: Specific Stock Review IBD National Meet-Up Monthly Series: FYI ONLY: Link Stock Contest: Target April Discussion: Anyone use Google Docs?

Market Trend Guide for how to read the IBD paper (posted in our Files section on Meetup.com): Some possible strategies for distribution day counts: When any market index accumulates 3-5 distribution days over any 4-5 week period, begin reducing positions When any market index accumulates 5-6 distribution days over any 4-5 week period, begin reducing positions aggressively and raise cash, especially if there are 4 distribution days within an 8 day period Market Pulse History: Market Pulse History < 3/23: Link Market Pulse History > 3/23: Link

Portfolio Rules Example of Portfolio Rules (need to have your own): In general, have a bias for staying in the market and holding your “low average cost” blocks Maintain a weekly overall portfolio advance/decline % trend If the portfolio is drawn down by 7.5% from the prior week, sell all of a stock that is trading below the buy price. If the drawdown continues after that trim the least performing stocks first to reduce exposure If three consecutive failures to the cut-loss-sell-point, then stop buying and figure out what is wrong - you are picking the wrong stocks or buying at the wrong time Track your ratio of winners to losers (those stocks that had to be sold at a loss). The ratio should be about 3 winners to 1 loser. If your ratio is not near this level you are either picking the wrong stocks or buying at the wrong time Always move incrementally in the market.  Add exposure when you see: 1. a Follow Through Day; 2. Additional accumulation in the indices; 3. Successful breakouts; 4. Indices pushing through resistance; 5. Your initial positions show you a profit

Leading Stocks Demonstration of IBD Screen Center: Link IBD 50, International Leaders, Leading Sector Stocks My Routine (Daily) Select “Price & Volume” and sort by highest volume Is there institutional buying/selling? What percentage of the stock list? Is high volume activity mostly driving prices up or down? Note movement of specific stocks and stock groups .. any relevance to portfolio holdings? Sort by Highest to Lowest percentage price change What percent of the stock list is advancing versus declining? How big are the advances and the declines? Note movement of specific stocks and stock groups Sector Rotations When market is volatile watch for movement to “defense groups” such as utilities and long tenured established companies

Chart Patterns & Breakout Strategies References for Chart Patterns: Bases Meetup.com Site: IBD Lesson 3 PDF and PowerPoint: Link Meetup.com Site: Base Chart Patterns Visuals (Eric’s PowerPoint): Breakout Buy Strategies Level of conviction in stock (market condition, stock ratings, industry group rank, chart pattern, base count, etc…) Position Size Scaling: 50% at BP, 35% at (BP+ 1.5%), 15% at (BP+2.5%) Position Size 100% at any point between BP and BP+5% If >5% wait for opportunity as many stocks return to their buy points after a breakout Review specific stock examples for discussion See our Files Section on Meetup.com

An Overall Grade for Stock Check-Up Method to get 1 consolidated grade from the multiple ratings in stock checkup: Do a Stock Checkup Grading for all Watch List Stocks: 1 Group Ratings   Composite Rating Red Dots=0.5, Yellow Dots= 0.5 EPS Rating Relative Strength Rating SMR Rating Acc/Dist Rating 2 General Market and Industry Group General Market Portfolio Mgmt - N/A Industry Group 3 Rate Fundamental and Technical Performance Current Earnings Red Dots=1, Yellow Dots= 0.5 Annual Earnings Sales, Margin, ROE Price & Volume Supply & Demand Red Dots=0.5, Yellow Dots= 0 4 Grading System: A 0.0 - 4.0 Points B 4.5 - 5.5 Points C 6.0 - 7.0 Points D 7.5 - 9.0 Points E > 10.00 Thank-You Lee Tanner from Petaluma IBD Group!

Agenda – March 2014 Market Condition Scott O’Neil Webinar Tuesday 3/25 (1:20 – 24:00): http://www.marketsmith.com/Learn/Webinars.aspx Decision Factors in Volatile Markets Market Trend Portfolio Leading Stocks Chart Patterns & Breakout Strategies Overall Grade for Stock Checkup Q&A: Specific Stock Review IBD National Meet-Up Monthly Series: FYI ONLY: Link Stock Contest: Target April Discussion: Anyone use Google Docs?