“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.
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 ve