Good afternoon, |
Some folks in the chat this morning asked if they could get a copy of the presentation from our morning show. |
We covered a lot in the morning session — from trading around the 20-day simple moving average, to the financial health scores that help you avoid landmines and find high-quality momentum trades, especially as volatility begins to surface in new corners of the market. |
I've included the key slides below — along with a bit of added context and commentary that didn't make it onto the deck. |
This is the technical backbone of everything we talked about today. |
The 20-day simple moving average (20-SMA) isn't just a technical curiosity. It's a behavioral anchor — fund managers, CTAs, and algos treat it as a dynamic support/resistance level. |
If price is above it, that tends to trigger trend-following flows and momentum buying.
If price breaks below, funds often move to cash or flip to short exposure. |
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A lot of people dismiss simple trend signals like the 20-SMA as "too basic."
But the academic literature disagrees — and has for decades. |
The key point here is that moving average strategies outperform random timing. They work across markets and timeframes, especially when paired with fundamentals. |
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You don't need complex indicators.
You need tight rules and fast decision-making. |
As I said on the show, a tight stop — around 2% below the 20-SMA — gives you control.
It's not about being right every time. It's about staying small when you're wrong and leaning in when the setup is right. |
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The 20-day SMA gives us a clean signal for timing — but once that trigger hits, you still need to ask: is the stock worth holding? |
That's where these metrics come in. They help you assess financial strength, balance sheet stability, and the odds that a company can actually follow through when momentum shows up. I'm not looking for perfection — just strong fundamentals and no red flags. |
The Piotroski F-Score |
This one's all about financial strength.
The F-Score gives you a simple way to assess whether a company is improving — operationally, financially, and strategically. |
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If a company scores 8 or 9 out of 9, that's a sign of solid financial health — not just value on paper, but value with traction. |
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To check an F-Score, just Google the ticker symbol and the words "F-Score."
GuruFocus and UncleStock typically have it listed. You'll need an account for full access, but many scores are free on search. |
The Altman Z Score |
This one gauges bankruptcy risk — pure and simple. |
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A score above 2.6 = healthy.
A score below 1.8 = warning sign. |
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When you pair the Z-Score with the F-Score, you get a much clearer view of who's safe and who's skating on thin ice. |
The Beneish M Score |
This one's forensics.
It was designed to catch companies cooking their books — before the fraud becomes obvious. |
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When the M-Score crosses above -2.22, it's time to dig deeper.
Some of the biggest blow-ups of the last two decades gave M-Score warnings well before the collapse. |
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The Ohlson O Score |
Sometimes the Z-Score isn't enough — especially in mixed-asset or capital-intensive businesses.
The Ohlson O-Score gives another take, using logistic regression to estimate bankruptcy probability. |
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It's useful across sectors and flags trouble that other models might miss — especially when paired with revenue deterioration. |
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The S Score |
This one's a bit more proprietary — it's used by quants and hedge funds to identify short-squeeze setups.
Think of it as a pressure gauge. |
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You won't find a public "S-Score," but you can build your own version just by watching these metrics.
Stocks with long days-to-cover and rising momentum can spike violently when liquidity flips. |
The point of today's session wasn't just to throw more indicators at you — it was to show how price action and fundamental structure can work together. |
The 20-SMA gives us a clean signal.
The F-Score, Z-Score, M-Score, O-Score — those give us confidence in the quality of what we're trading.
And in this kind of market, quality matters. |
Use these tools to filter out the noise, tighten your risk, and give yourself a clearer edge. |
We'll keep refining the process from here, particularly as shifting volatility continues to shape how and where opportunity shows up. |
Stay positive, |
Garrett Baldwin |
P.S. We'll dig into more of this tomorrow — including how to combine these metrics with live setups and what to watch as volatility picks up. Bring your questions, and we'll slow it down where we need to. |
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