Here's My “Strong” April Watch List

A lot of people are looking to April with a focus on tomorrow's jobs report. I'm not. I'm looking at the same metrics that I look at every month. Because these two simple metrics give me a real-time understanding of what is working in today's economy.
 
 
Here's My "Strong" April Watch List

Dear Reader,

Good morning. A lot of people are looking to April with a focus on tomorrow's jobs report.

I'm not. I'm looking at the same metrics that I look at every month. Because these two simple metrics give me a real-time understanding of what is working in today's economy.

There's a lot of chatter about crashing hedge funds, oil price volatility, and more.

Again, I'm ignoring all this. I'm looking at

  • The F-Score, a measurement that tells the health of a company's balance sheet using nine simple measures.
  • The Z-Score, a weighted figure that tells you the probability of a company going bankrupt...

I want a Perfect F Score of 9 and a Z Score Above 3.

These two figures suggest a "Strong" balance sheet.

And I want to trade these stocks every month given their low floor.

Here's my April list.
Now, you can look at this list, and it will tell you what's working in this economy. Housing remains in high demand. Biotechnology and medical diagnostics are extremely attractive, and business is booming.

Home improvement, gaming headphones, and software are all great plays.

So, I'm not only going to look to trade in these industries and use leverage to do so, but I'll look across ALL of these sectors to try to find value and any companies that might be joining this exclusive club.

When semiconductors (CCMP) companies are facing shortages of chips around the globe, the solution for more demand will be higher prices and better profits. So, I'm looking at the companies with F Scores of 8 and Z Scores of 3 as well, like AXT Inc (AXT) and Applied Materials (APAT) as well.

This is an exciting way to take advantage of strong balance sheets and a wave of capital entering the market in the weeks ahead through stimulus, tax returns, and a return to positive momentum.

I'll show you a few ways that you can trade these stocks next week that will aim to generate solid returns over the next 45 days with simple leverage and conservative strategies.

On Friday, I'll be out of the office in observance of Good Friday. And, it's also my 40th Birthday. So, I'll be out of pocket.

But we'll resume the anomalies and unique insights again Monday.

Enjoy your weekend,
Garrett Baldwin



Market Conditions with Dr. Bauer

As you know, we use the 5-Day and 13-Day Exponential Moving Average as a gauge of measuring momentum in the markets. Typically, when the 5-Day falls below the 13-Day line, it can signal that a specific index has fallen into a negative momentum cycle.

This week, the S&P 500 has been able to buck the negative trend last week. However, the Russell 2000 remains locked in a period of severe swings and increased volatility.

The chart below shows that the Russell 2000 is still seeing a negative trend for this oscillator. However, conditions do appear to be improving.

Exercise caution heading into the weekend.
Market Conditions with Dr. Bauer

As you know, we use the 5-Day and 13-Day Exponential Moving Average as a gauge of measuring momentum in the markets. Typically, when the 5-Day falls below the 13-Day line, it can signal that a specific index has fallen into a negative momentum cycle.

This week, the S&P 500 has been able to buck the negative trend last week. However, the Russell 2000 remains locked in a period of severe swings and increased volatility.

The chart below shows that the Russell 2000 is still seeing a negative trend for this oscillator. However, conditions do appear to be improving.

Exercise caution heading into the weekend.
Dr. Gregor Bauer

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