In the 1980s, I joined Drexel Burnham Lambert... The investment bank was famous for its "junk bond" department. But it also had a quantitative-analysis department. That's where I met George...

Editor's note: We began a weeklong reflection on our investing approach yesterday... Chaikin Analytics founder Marc Chaikin discussed what he learned early in his decadeslong Wall Street career. This important lesson ultimately led to the Power Gauge's creation. Today's essay first appeared in the April 19 edition of the Chaikin PowerFeed. In it, Marc will share all the details about another period in his career that played a big role in this process.  And as you'll see, this "magic key" is as powerful as ever... George's 'Magic Key' Still Works By Marc Chaikin, founder, Chaikin Analytics In the 1980s, I joined Drexel Burnham Lambert... The investment bank was famous for its "junk bond" department. But it also had a quantitative-analysis department. That's where I met George... George was a "quant" with something truly special at the time – a quantitative database. Now, regular Chaikin PowerFeed readers know I learned about technical analysis all the way back in the late 1960s. That happened at Shearson, Hammill – the Wall Street firm where I started my decadeslong career. So with my love for the technicals, you better believe I made a point to seek out George when I started at Drexel Burnham Lambert. And it paid off big time... George mentored me in quantitative analysis. But that wasn't all... He also gave me access to his database. It was the "magic key." And as I'll explain today, his original research played a huge role in the development of the Power Gauge. The two factors he specialized in are now core components of the system... Recommended Links: How I Saved My Retirement and Stopped Worrying About Money Forever A reader came forward with his unique story of how he retired early and worry-free WITHOUT stocks... thanks to ONE single idea that anyone can use. Now he sees 16%-plus annual returns with legal protections... and he NEVER has to worry about another market crash. Get the full story today, and claim a holiday "bonus gift" that he negotiated on your behalf, right here. UPDATE: Market Meltdown 2023 What happens in the coming weeks could make or absolutely break your retirement. That's what history has shown when stocks are falling, inflation is rising, the Fed is raising rates, and economic activity is slowing. But Dan Ferris recently stepped forward with an insanely simple solution to protect your wealth. Full details here [important update]. At Drexel Burnham Lambert, I was the only retail stockbroker who could access George's magic key. Suddenly, I could combine my "relative strength" research with George's database for "earnings surprise" and "earnings estimate revision" research. And there was more data, too. George also had highly valuable information like "insider trading" activity. Amazingly, what George taught me back in the 1980s still works today... Analysts' estimate revisions are the single biggest short-term driver of stock-price movements. That's still true even with high-frequency trading and all the information available to folks on the Internet these days. In short, a virtuous circle exists for companies that exceed Wall Street estimates. It works in the other direction, too. Disappointing earnings reports – and importantly, how analysts react to them – drive downward price action in the markets as well. So I'm not exaggerating when I say that George gave me the magic key. I was able to take my research to the next level with that key. It gave me the confidence to go off and start an institutional brokerage firm in 1989 with a partner from Philadelphia. We had institutional clients like famous hedge-fund manager Steve Cohen. He used our research and analytics terminal to successfully build his multibillion-dollar hedge fund. With George's magic key, I went from burgeoning technical analyst to full-on quant. And I learned that multibillion-dollar hedge-fund managers would pay big money for my tools. Now, after leaving retirement about a decade ago, my focus in life is sharing those tools with individual investors. And the summation of those tools is the Power Gauge. In fact, the two factors that George specialized in – earnings surprise and earnings estimate revision – are core components of the Power Gauge today. At any time, investors can find out what these factors show for any of the more than 5,000 stocks in the system. George shared the magic key with me all the way back in the 1980s. It doesn't seem so long ago. But such is life. Importantly, this magic key led me to build a powerhouse quantitative-analysis firm. Some of Wall Street's most influential fund managers have relied on this data over the years. And as crazy as it might seem, George's magic key still works today. Good investing, Marc Chaikin Market View Major Indexes and Notable Sectors     # Hld:     Bullish     Neutral     Bearish Dow 30 +0.13% 8 21 1 S&P 500 -0.38% 121 270 106 Nasdaq -1.41% 20 57 23 Small Caps -0.65% 454 964 476 Bonds -1.98% Energy +1.07% 7 16 0 — According to the Chaikin Power Bar, Small Cap stocks remain somewhat more Bearish than Large Cap stocks. Major indexes are mixed. *  *  *  * Top Movers Gainers WYNN +4.47% VFC +4.18% LVS +4.17% STX +3.07% EL +3.02% Losers TSLA -11.41% MRNA -9.50% NVDA -7.14% ENPH -6.60% LUV -5.96% *  *  *  * Earnings Report Reporting Today Rating Before Open After Close No earnings reporting today. Earnings Surprises No significant Earnings Surprises in the Russell 3000. *  *  *  * Sector Tracker Sector movement over the last 5 days Energy +3.82% Utilities +2.44% Staples +1.78% Industrials +1.49% Real Estate +1.34% Financial +1.19% Health Care +0.97% Materials +0.68% Communication +0.51% Information Technology -1.74% Discretionary -1.96% *  *  *  * Industry Focus Innovative Technology Services 12 40 40 Over the past 6 months, the Innovative Technology subsector (XITK) has underperformed the S&P 500 by -15.56%. Its Power Bar ratio, which measures future potential, is Very Weak, with more Bearish than Bullish stocks. It is currently ranked #20 of 21 subsectors and has moved down 1 slot over the past week. Indicative Stocks RBLX Roblox Corporation UPST Upstart Holdings, In SNAP Snap Inc. *  *  *  * You have received this e-mail as part of your subscription to PowerFeed. If you no longer want to receive e-mails from PowerFeed, click here. 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