Will Keith Fitz-Gerald’s “X-Pattern” Drive this Stock Up?

Checking out the new teased stock with the "X-Pattern" stock chart, teased by Money Map's High Velocity Profits

By xiexgp@gmail.com, March 16, 2015

“I’m going to make a $1.95 million bet.

“You see, over the next few minutes, I’m going to show you a simple pattern I believe will allow you to achieve two incredible feats…

“You could capture a series of 164.68% windfalls, and…

“You will, with 100% certainty, only buy stocks that are going up.

“At its core, all you have to do is just grab regular, ‘boring’ shares of stock when you see this X…

“And sell them when you see it again.”

That’s the lead-in to the pitch for Money Morning’s “X-Pattern” trading idea — Keith Fitz-Gerald says he has found a “simple pattern” that will let you capture a series of windfalls and “with 100% certainty” only buy stocks that are going up. Pretty strong words. And he’s using them to sell a trading service that he calls High Velocity Profits.

And I’m not going to explain the X-pattern in detail for you here — I’m not a chart-trading expert, it looks like he’s using (at least in part) something called the Aroon indicator, which is a trend indicator that you can see described here or here,it basically measures the days since a high (or low) price was hit and gives buy (or sell) indicators when the “days since a high” indicator crosses over (or under) the “days since a low” indicator.

If you see “AROON 25” it means they’re using 25 days as the timeframe — so a stock would be at 100 on that indicator if it just hit a 25-day high (or low) price, or at 0 if it has been below the 25-day high (or above the low) for 25 days. For a lot of stocks, these lines will cross frequently — for some that are consistently rising or falling, they might not cross in a year or more.

Trend-following has certainly led to lots of huge gains over the years, particularly for those who can buy on the way up and sell after it starts to go down and do so consistently over time, and there are hundreds of indicators and strategies that trend-following chartists use, and variations on all of them (what time period you use, what but it’s far from being my strength or area of interest. I don’t know whether the AROON indicator (or oscillator, which visualizes the data differently) will work better than any other charting indicators at measuring the strength or direction of a trend.

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So why do I mention it today? Because today I saw an ad from Keith Fitz-Gerald that said he just had a new indicator triggered last week, a new “X-pattern” on a stock that you should buy. So that I can sniff out for you, and we therefore get an actual stock to talk about and, for those who want to test this “X-pattern”, an example to consider.

Here’s how he put it in the email:

“Below is a stock chart for a company based out of Rochester, NY.

“As you can see, over the past few weeks it has fluctuated wildly.

“However, I believe I know exactly where this stock is going next – and that you can make a whole lot of money from it.

“In fact, I’m so confident that I’m putting $1.95 million on the line.

“You may think I’m crazy for doing this.

“But I’m not. You see, my team has spent the last six months investigating a single pattern that has been appearing alongside two to three stocks a month… every month… going all the way back to the bursting of the dot-com bubble, through the recession, all the way up to today.

“And it was spotted with the company in this chart.

“This same pattern has been detected with some of the market’s most exceptional windfalls, like 7,476% on Monster Beverage, 2,941% on Terra Nitrogen, 2,566% on Kingold Jewelry, and 1,478% on Radcom.”

I didn’t copy the chart, but I did check it to confirm — the stock he’s talking about here is Paychex (PAYX). The stock chart is an exact match, and it is a Rochester company. The AROON indicator for PAYX may have crossed on the bullish side over the last couple days, but if so that would mean you’re using a very short-term version of the indicator (like 15 days or so) — and if that’s what you’re using, then the up/down “X” of the crossing indicator would have happened a dozen times or so in the last six months. If you’re using a longer-term AROON indicator, like 25 days (which most of the chart systems default to) or longer, then PAYX has been in a positive trend on AROON for a month or more after doing a bit of back-and-forth crossover in January and early February.

So what does that mean? I have no idea. PAYX is at a 10-year high — so it doesn’t take a wizard to note that the trend is positive, but it might take an expert technical trader to get you in and out of bumps up and down over the next couple years. PAYX is, like its larger rival ADP, quite expensive and priced at a stiff premium to its growth rate. This is an HR outsourcing company, in case the name is new to you — they handle benefits outsourcing, HR, and payroll processing, particularly for small to midsize businesses who might not have big HR/Personnel departments. What will drive PAYX is the same thing that will drive ADP, broadly speaking: Employment and job creation, labor-law complexity, and short-term interest rates.

To simplify: If employment rises, they’ll collect more fee income for running payroll for their customers… if it becomes more complicated to deal with payroll laws and regulations (as with health insurance handling and tax law), they’ll get more new customers who want to outsource some of that headache… and if short-term interest rates rise, they’ll earn much more money on the brief window of “float” that they get to hold during the paycheck-generating process. (Like ADP, they collect money from the employer a day or two before it’s actually sent to the account of the employee or printed on a check, and earn some return on that money — or at least they did, when there was any money to be earned on very-short-term interest rates… even with low rates, though, that fund is more valuable than it might seem, because, like Warren Buffett’s famed insurance float, it refills itself every day with new employer money even as it disburses itself to the employees so you can, if you wish, consider it more of a steady asset to earn on than a liability to pay out. Like a dammed pond — it lets water out through the sluice every day and new water comes in every day, but the pond’s depth usually is pretty reliably within an expected range).

So with employment trends certainly improving (more people working), and with short-term interest rates widely expected to rise, there’s quite a bit of optimism baked into PAYX. Maybe that’s as it should be, I can’t claim to have have researched the company thoroughly — the twice-as-big ADP is similarly valued at about 30 times earnings (and is at all-time highs), but PAYX is generally more profitable (it’s a less complex company, they don’t offer as many different services even though both are huge in payroll processing)… and both are expected to grow earnings at a 8-10% annual clip, which is phenomenal for a $20-40 billion company but not that exciting for a company valued at 30 times earnings. They’re also both being bought as “dividend growth” stocks — PAYX has the somewhat higher yield (3% versus 2.25%) and the less-perfect record of dividend growth (PAYX has paused their growth a few times and is a younger company, ADP has raised the dividend every year for 40 years now).

And yes, Paychex (PAYX) and ADP (ADP) have been generally stronger bets for far longer than the “upstart” HR outsourcing/payroll companies that have come public more recently, particularly those who use the word “cloud” in every other paragraph like Paycom (PAYC) and Workday (WDAY). I don’t know if that will continue or not, but so far investors have generally been better-rewarded by the established firms that are actually profitable.

We’ll open the week with that — what do you think? Is PAYX a buy either because it’s in a strong and positive trend or because you like the business? Have any interest in or expertise with the AROON indicator or other charting tools Fitz-Gerald might be using to identify his “X-Pattern” stocks? Let us know with a comment below…

(Our readers had some discussion of this “X-Pattern” a few weeks ago when it was first touted by Money Map, so I’ve appended that discussion they had to the end of this article to get you started. Enjoy!)



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Marc
Guest

This is my first visit to this website. This information that Keith describes in is video is based in the AROON indicator. If you have stocks that you like, you can apply this indicator free of cost on stockcharts.com. Simply enter the stock symbol and select AROON from among the many indicators that they provide and you will be able to obtain the AROON based chart.
Marc

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John
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John

But you also have to know what the “F score” of the stock is, and exactly how to apply or use this AROON indicator. Can you explain that to a person who needs to be told and showed?

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Marc
Guest

I neglected to reply to the second part of your question, (exactly how to apply or use this AROON indicator). I will attempt to do this. Once you have determined that you are interested in a stock, you can bring up the chart on stockcharts.com or on your preferred charting platform. All of Keith’s recommendations are based on the weekly charts, so you have to select the weekly option. You then go to the indicator section of the chart and select the AROON indicator and update the chart. The AROON indicator will appear above the chart and from there you… Read more »

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Graham
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Graham

Hello – Thank you for your comment. I would like to talk with you directly if possible. I was using Forex trading and was show how to manipulate the chart so it only shows red/green and when the red crossed the green you would buy/sell accordingly. This was done with monetary pairs – but I have a few questions with regards to stock trading. I would be happy to compensate you for your time. Please take this seriously as this is not a scam and I have 20 years of IT experience so I can understand the programs very well… Read more »

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William
Guest
William

Great information you supplied, I am curious as to your success and also if you have any other patters that indicate a direction. I am a option type person and follow Mathew at Top Gun Options Service and by that I mean about 2 or 3 times a year I will get his service for a month. M arc I also use Stock Carts .com and a couple other chart services and am always interested in what one thinks benefits them over the different services. Would you mind letting me know why you use Stock Charts verses other?
Thanks
William

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jabber texting
Member
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jabber texting

no, you only explained how to use the charting technology, but provided ZERO judgement clarification.

Felipe
Guest
Felipe

As a subscriber, were you told how to adjust aroon’s periods to match uptrends or downtrends? what period is used in weekly charts?

snoopworthy
Member
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snoopworthy

So, what is the F score?

Susan
Guest
Susan

John, what IS the “F score”??? and…where do I find it on the company’s site???…or do I need to go elsewhere to find it???…is it “THAT” difficult to explain???…is there a book or other direction, like a web site, you could recommend???…

Evan Branson
Guest
Evan Branson

Susan I just stumbled upon this X stuff spiel. It feels like its obviously a sales pitch. Trying to make u interested and then break it on you that you have to pay for something. People dont write in this style unless they are trying to sell something.- to the website: Its not nice to be so obfuscatory in your marketing strategy, guys. Tell you what, I can make your marketing more lucrative, and I’m not going to tell you now, but if you give me just a small consulting fee 🙂 then I think that we could make a… Read more »

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Dayton
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Dayton

How much will you charge? I am willing to give out advice for free and can assure you it is worth every penny of it.

sjanus11
Member
👍10
sjanus11

Susan, I just stumbled in from Keith’s site (Money Map Press) about his “X” pattern, and was checking over here. Anyway about the “F” score. I’ll copy some text (Below) from the site. I guess just Google the guys name below and you can find more on “F” score. And to all yes Keith is asking “Just” $1995.00 To learn the secrete your self. I’m still in his 30 day trial period for money map press.com, and so far I have to admit it’s not bad. What I mean is I’ve came over here and back checked a few of… Read more »

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jabber texting
Member
👍-12
jabber texting

yes, it is more frippery for money

Irfan
Guest
Irfan

Susan, the “F-score” generally refers to the “Piotriski F-Score”, which is an indicator of financial health that’s based on 9 accounting factors. It is from a paper by a professor named Joseph Piotroski. It’s nothing proprietary, and if there aren’t any websites that display it for free (i’m not sure off the top of my head), it can quite painlessly be calculated for a given stock from freely available data. I hope that helps.

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ryan
Guest
ryan

I don’t think the f score has any great impact, other than keeping you away from companies that are unsound. The indicator is a standard indicator that is readily available

jabber texting
Member
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jabber texting

Are you new to the interweb? The etiquette here insists you provide some linkage or better information than vagaries especially if you have solved a problem in a thread.

Joel
Guest
Joel

I agree … and my apologies for not reading your comment first before posting mine! You said it first….

Marc
Guest

It is interesting that they add the “F Score” to their process. Determining the “F Score” on your own requires some effort. One way to do it is to use the Value Line Investment Survey (VLIS), which is generally available in public libraries. It contains data going back many years and with some effort you can determine the F score. However, you would need to know which stocks to investigate. For this one would need a stock selection process. The Value Line investment Survey, does this in a way because of its ranking of stocks relative to their timing and… Read more »

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Mike
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Mike

Marc- I believe I read someplace that the starting point before going through the F Score exercise is the lowest 20% of stocks of price to book value. that seems to make sense, as the object is to find value stocks (mostly among small cap stocks, as the market is going to be a lot more efficient with large caps). Your thoughts?

Marc
Guest

I would be unable to answer this question with a great deal of authority. I trade mostly based on technical analysis (TA). I do not ignore the fundamentals, but once it is established the the fundamentals are in order, then I trade on the basis of TA. However, I searched for the relative importance of book value and found the following link at the Investopedia website, which expounds on book value and its pros an cons as a tool for determining the value of a stock. You may find it to be of interest.
http://www.investopedia.com/articles/fundamental/03/112603.asp

Marc

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Steve
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Steve

Marc are you still reading on this site, if so I have a question. Today is dec 3 2016 let me know if you see this, I will be checking daily thankyou steve

vikalp
Guest
vikalp

You can see the F score of any company on gurufocus.com. No need to calculate.

Jennie
Guest
Jennie

Thanks guys for all your help here. Now how do I put the aroon indicator together
with the F score?

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ryan
Guest
ryan

Instead of the f score, modify the settings. They have suggested using 100 periods. Start with that. Then tweak it and backrest on several charts.

But remember it is only an indicator

BK2 Trading
Guest
BK2 Trading

I would love to understand how to find F score. I have visited this site, but do not see where I can find these scores already calculated. Can you help?

L Tran
Guest
L Tran

go to gurufocus.com, enter the ticker symbol in the search window and look at the financial strength indicators.

ryan
Guest
ryan

Gurufocus is great, very good for quickly finding all fundamentals you will ever need

Branson
Guest

thank you.

jabber texting
Member
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jabber texting

why are you posting as a guest?

MP2
Guest
MP2

Today in repitching the whole hour long X-Factor (my term) video the email seemed to vaguely recommend CHLN Which just had a nice bounce, 2.90 Wed am, 3.69 Thurs am, peaked at 5.69 today now in the 4’s, but he didn’t say if the magical ex had been seen recently for this stock instead leading into the same usual video and picture and I didn’t even look at pricing this time. I did finally get in on this “join for free for three months pay us $19 for this report” routine and got some postal mail from them. There’s about… Read more »

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Tom
Guest
Tom

I get the same e-mails. So Shah recommends a stock with an average daily trading volume of 11,000 shares and a $2 price to tens of thousands of people and it goes up? What does that sound like to you?

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Dr. Altaf
Guest

X pattern – which 2 lines. Red is =? Green=?. We cannot know from any chart pattern. Any one kind will those 2 lines that meet please?

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ryan
Guest
ryan

Its a standard indicator, called the a room, simply set it up and backtest

Dr. Altaf
Guest

Folks !
All I could see discussing about Fees & if successful or not. I feel all the talents are here who are well versed & experienced. Could you not find when the X is formed following which (certainly will be on the net) chart we may get X patterns? When X is formed which 2 signals meet? (Red=? & Green=?). Then may be we may find a result. Please do that research & put your valuable feedback for all’s benefits. Thanks & appreciate!

ryan
Guest
ryan

They actually tell you the formula in the email, its the aroon indicator, simply modify the settings and backtest

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Robert Reilly
Guest
Robert Reilly

we need an abbreviation PAD for pump & dump

nruas toj
Guest

is this company legit ?? is it a scam ?? should I invest time & money into this business ??

twodleoo
Guest

This SEC filing from CHLN on Nov 2 announces they are having a special meeting in China to vote to delist this stock.

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smandell
Member
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smandell

Hello, All. Fascinating Discussion.
This is an indicator I could grow to love.
May I suggest P&D for Pump & Dump?

Dayton
Guest
Dayton

OK, so I stupidly bit on this guy’s scrod and so far, have not had one winner in his stable of recommendations. He also recommends a 25% stop loss be place on one’s purchases which I think insures a 25% loss. Pump and dump seems possible although I have no idea how you could pump and dump based on any picking based on indicators. I have also been following other picks that I did not buy and they are also all in loser status.

jeff
Guest
jeff

You purchased the Keith Fitzgerald High Velocity Profit ? and it is bs? Please let me know if this is right. I am interested in this program or was I should say. Too good to be true huh? Hope to hear from you. Jeff

Carol
Guest
Carol

I actually got in on the 3 mths for $19 to try it out. His first action to take was to buy in NPTN as long as it was below $10.50. I bought at $9.69 and so far it has been going up. He states that the next X may not be for 16 mths so I put in for a year to start. I am hoping it works out as all I hav read so far is negative comments but not sure this was from people who followed his instructions completely.

MePerson
Guest
MePerson

If you held NPTN until the reversing X-cross you would have lost a lot of money.

ryan
Guest
ryan

Jeff, all he has done is modify the settings for the aroon indicator. The indicator is available in any good charting software. With all indicators you should play with the settings to find what best lines up with the security highs and lows. As I said, its an indicator, not a guarantee, a useful tool that may help you. If you want some good free advice use YouTube, start with Stephen Bigalow, Wendy Kirkland, metastock, by time you go through the info that is freely available you wont want to pay these people. If your serious spend the money on… Read more »

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jabber texting
Member
👍-12
jabber texting

What are the comparison criteria for scanning and charting software?

anonimouse
Guest

so then why not bet on the opposite of their recommendations if they are always wrong……? if recommendation says stock XYZ is going to go up (and all their recommendations always lose or opposite to what they say) then buy puts instead……if they recommend its going down, buy itm(in the money) or ntm (near the money)calls …further protect yourself and sell a call a few dollars higher than the call you bought (this just limits the profit if it goes up) then again im not always a successful options trader

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Big Bertha
Guest
Big Bertha

I only found two stocks that are at a loss. All the others were going up.

At the end of the day, being a newb that I am at this, its a subscription to having someone tell you what stocks to buy ,at what amount, and when to sell. This is using some formula some guy did back in the 90’s.

jabber texting
Member
👍-12
jabber texting

which guy

Carol
Guest
Carol

How many stocks have u bought from Keith Fitz recommendations? Have u lost in all of them? I just started and want to know if I need to get out before losing. So far my one stock is going up. So I can get out before a loss. But originally Keith had said to plan to stay in for 16 months.

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charles Weiler
Guest
charles Weiler

Carol — you have it all correct. The buy or sell patterns have no date certain… The X-pattern stocks with high F scores have clear trend lines, either up or down. The patterns are based on a significant amount of trends and can cross to “sell” in a few days or a few years. (I just found this Kieth Fitz page and have not listened to his sales video.) You can find the same X – pattern stock analysis today at http://www.oilandenergyinvestor.com with Dr. Kent Moors. (for a faster rendition – start the video; then hit the exit key; then… Read more »

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