Good afternoon, everyone. Welcome to our Getting Started with Stock Investing. Today, I' m Connie Hill. I' m happy to have you join me here today. You know, the market has maybe done some changes on us in the last recent little bit. The question you might be having is, well, has the trend really changed? And could I maybe have known about the change before it actually happened? And were there some signals and signs we could look at? So we' re going to use some of our technical analysis skills today to address that question and hopefully give you a little bit of confirmation as far as what is going on in the markets. Now, I have Lee Bohl in the chat to help me out and answer your questions.
So as you have him, go ahead and ask your questions. This is a beginning level class. There is no question that shouldn' t be asked. OK, it' s large or small. If you have a question, somebody else may have that same question. Now, if you' re listening to this on the recording, I know lots of you do. When you have a question, put your question in the comments section of the YouTube. Right. And we' ll go back as coaches and look at that throughout the week so you can get your questions answered pretty quickly there as well. Well, just a quick hello to some of our loyal, loyal folks here today. We' ve got Robert, Karen, Kevin, Wiley, Riceburg, Greg. And. And Sim, we' re happy to see all of you here. Well, let' s go through our disclosures and then we' ll get down to the fun of things here. So what we talked about today is intended to be.
I guarantee future results are successful. Investing involves risk, including the loss of principal. We will be using the paper money downloaded software here today. There' s a web version. There' s a mobile version. And so this is going to be the most robust love that typically you' re going to see us use in most of the classes. OK. Now, wanted to give you a quick announcement here. Some of you are aware of these workshops that are going on and we have new people joining us all the time, and so. You might not be as aware, but we' re going to be doing three live workshops over the next couple of months, two and a half, three months, and you are invited to come. It' s free to you.
You just have to show up. Usually, we' ll feature pretty good speakers, and we' ll have it in a nice hotel where you can participate and be around other people that are like-minded, that are learning to trade just like you are. So I highly recommend these events if you live near the area or if you just don' t mind hopping on a plane and heading to Chicago or wherever it might be, okay? I' m going to encourage you to do that. People absolutely love it. Now, where can you register to attend? You can see up here in the address, it says schwab. com/ slash events. I' m going to go to the calendar and show you. So let' s jump over there. I am at schwab.
com, and then you can see it says Schwab-Coaching here, and you can see kind of by default when you come in, it shows the webcasts as well as Schwab events. I' m going to click off the webcasts so that we' re only seeing the events. We had a virtual workshop last week, Monday through Wednesday, looks like they went Monday through Wednesday. That was a street smart edge to think or swim. We' re going to be doing another one starting on the 29th, but the first one of these that takes place in Arizona. So here on the 26th, click on it, and it' ll kind of give you some information. It' s a two-day workshop. It' s Friday and Saturday, and it kind of breaks up for you what' s going to be happening on Friday because that' s the technical analysis part.
The options portion will occur on Saturday, and so you' ll just want to register for the event, and maybe you need an email reminder. That' s fine as well, all right? But they do fill up quickly, so if you can' t register, you can do that. So if you kind of have an idea, you want to participate in one of those, make sure to sign up pretty quickly. Just going to check the chat here real quick. Let' s see. Wiley says, I' m in California in July. Well, I did meet Wiley in California. It wasn' t in July. I think we had nicer weather. I think it was maybe like September or something like that. Wiley says, ' I can' t believe how much they spent on educating us.' Yeah, we want you to be educated.
And we' re doing all sorts of things to help you get there and help your trading. I am going to mention one other thing since we' So, out here on the web, and that is those of you who maybe haven' t subscribed to the channel yet, do so in the bottom right-hand corner. It says subscribe with the YouTube logo. When you do, it makes it easier for you to find our content and what we' re about, okay? So I' m just going to refresh this, and you can see, well, you can' t see because I scrolled over it. We' re here on the Trader Talks channel, all right? And these were some things that were coming up before we got started here. So here' s our Getting Started class.
And then Monday morning, bright and early, right at the opening bell, we' ll have Trader Talks. We have a Trader Talk event every single day of the week, all right? So it' ll help you identify maybe some of the recordings if you want to do some binge-watching, right? Finding the different playlists. So it helps you find us, and it also helps the algorithm. So if you want to do some binge-watching, you can do that. So if you want to do some binge-watching, you can do that. So if you want to do some binge-watching, you can do that. So that our events will come up more frequently to people that are looking for them. All right. Let' s jump out to Thinkorswim.
I kind of started this with, you know, things maybe have changed a little bit in the last couple of weeks. And could we have maybe known about trends changing? So we' re going to spend a little bit of time on moving averages and identifying trend changes here for a moment. And we' re, we' re also going to use the RSI. Now I have on the charts, and I' m going to just kind of go into my studies here and show you. I have a 10, which is a short-term moving average. These are all going to be simple. I have a 50, which is more of an intermediate moving average. A 100, a little bit longer term. 200, very long term. Okay. So we have all those moving averages on the screen.
I added RSI. And really, to pull these, to get the simple moving average, if you' re not familiar with it, just start typing in simp. Okay. You' ll see everything that has an S-I-M-P in it. And you can just find the simple moving average and bring it over a few times. Same thing on the RSI. Just type it in the search bar, unless you want to scroll down. And there you can see there' s our RSI. And when you grab the moving averages, then you' re going to personalize them and put in what period we' re looking for. So I double-clicked on that. Initially, it comes in at nine days. And I changed this one to be 200. All right. So as we look at the chart, 200 is down here.
100, the S&P 500 is getting closer to in the last couple of days. The red one is the 50. That' s our intermediate moving average. And the short-term one, that blue, is our 10-day moving average. And so when somebody says, well, did the trend change? It might be, well, which trend are you talking about? Are you talking about the short-term trend? Are you talking about the intermediate trend? By and large, we' re looking at, in most of the classes, we' re talking about the intermediate trend when we say, hey, has it changed? But it' s always a little bit of a lagging indicator. Meaning, say, for example, on this 200 -day moving average, it' s taking the last 200 trading days. All of them have equal weight.
So when the trend starts to change and price starts to maybe make lower lows and lower highs, it takes a while for this 200 -day moving average to change. The 10 reacts really quickly. The 50, not nearly as quick as the 10, but certainly a little bit fast, quite a bit faster, I should say, than, say, the 200 or the 100. So if we look at SPX, and I want some opinion here from you in the chat, do you think the trend has changed on SPX? Okay, I want you to just, the intermediate trend, do you think it has changed? While you' Re chatting into me, and let me just see if I need to cover any questions here. Shantha says, do these online classes cover classes there too?
I' m not sure how to answer your question there, because we have these webcasts throughout the week, right? And we' re really looking at current market conditions. Current status of maybe some of the trades we' ve been working with in our different classes. And the content and the information is similar in the sense that we' re talking about technical analysis, and those principles are general. For day one of the workshop, day two, option principles, option strategies. So yeah, there is some crossover, but it s kind of like you go there and you get a good feeling of it, right? You get a lot of information in those two, sometimes you're just like ready for it to be over by the time we get Saturday afternoon.
So I don't know if that's what you're meaning by that. If I need to be a little bit more clear, please tell me that. Now, Sim says the death cross with two of the moving averages. It can be called that. Yeah, what is the death cross? It' s going to be when a shorter term moving average crosses over a longer term. Typically, the one that I think is talked about the most is going to be when the intermediate moving average crosses down below a longer term moving average. Okay, so like a 50 crossing over a 200. Or it can be done with, I should say daily. Okay. Let' s see. Did the stop, did they stop the 1am? Workshops they had before I' m returning slowly, so I didn' t see them around 1am, probably for Sim.
Now, Sim, are you still in Holland? If you' re still in Holland, then your time is going to be way different than how we' re going to report it. Okay, because typically those those workshops, yeah, we start at nine in the morning, go till about four in the afternoon. Okay. So what do you think? Has it changed? Okay, so Chena said yes. Why this? Oh, you guys are just kind of having some discussion here. Any coming up in the New Jersey, New York area? Santa Claus, we could do go to New York quite a bit. I don' t know of anything on the docket. We were telling you the ones that we have absolutely scheduled and we know where they' re going to be and what what the days are and the hotel is booked and that type of thing.
Then we then we let you know about it. Just know we go there frequently. As well as say, DC, we also cover some Florida areas, Atlanta, so just kind of a mix throughout the country and the bigger, the bigger cities. Okay. Well, I m going to tell you if the SPX that maybe things have changed a little bit. Now, if you' re having a hard time, maybe your eyes aren' t totally getting the higher highs and higher lows. You can go back to these moving averages to help you to determine, Hey, is something changing here, okay? So up here, we have a high, and then we have a second high, and they' re about the same. This is a few pennies more, right? This is a few more points higher, but they' re essentially the same.
And then I would say right here was the previous low. And so when we' re looking to see, you know, when the market kind of pulls back, did it go beyond, I' I just gonna use that same circle, did it go beyond this previous low? And the answer is yeah. So we have a lower low. And then if you' re looking at maybe say this candle and this candle, they attempted to rally on that day. It just didn' t get very far. And so we' ve got a couple of lower highs if we' re to kind of micromanaging the candles there a little bit. And so I would say, yeah, the intermediate term on the SPX changed. What about the Dow? Let me change something here. We' re gonna use a couple of things.
Let' s see the Dow Jones Industrial Average is on here. The 10-day has moved down past the 50 and it' s down below the 100. So I would say it s even weaker, even though it was just, well, still March 21st. So within the month, it had made a new all -time, high, but yeah, lower lows and lower highs. The one that' s, let' s look at NASDAQ here real quick as well, because it too is pulling back. And you guys have probably noticed a lot of tech, technology stocks have been basically retracing. Now I want to talk a little bit about the RSI and how it can help us. Okay, the RSI is an oscillator and it gives us an idea of the momentum and is the momentum building, is the momentum building, is the momentum slowing down.
And one of the really nice things about the RSI is it can clue us in when there' s a divergence. Well, what' A divergence? A divergence is when the price does one thing like making higher highs and higher lows, but the oscillator doesn' t. In fact, maybe it goes opposite. And so this is really pretty evident here on the NASDAQ where we were seeing these higher highs and higher lows, but down here on the RSI, I can draw a downward trending line, downward sloping line, because the highs, when we got a high on the price, the RSI, we would expect it to be higher. We would expect it to be doing similar things that the stock is doing. But when it doesn' t, that' s what we call a divergence.
Okay, so it' s kind of reacting in an opposite way. And so here where we were getting higher highs and higher lows, but the RSI was not, but the RSI was getting higher highs and higher lows, but the RSI was not, it was getting lower peaks. That is a divergence as a yellow flag that says, hey, something might change here. But our divergence can go on a long time before the trend actually changes. And sometimes it doesn' t change, but it can be a little bit of a warning to us that things are weakening. Okay, so here on the NASDAQ, could we have known beforehand that maybe it was going to be weak? Certainly we could have, because this first lower high on the RSI, I was back in February, February 9th.
This one got a little bit lower, that was March 1st. Okay, so while the price is continuing to go up, it went down. And that' s one thing you can look for on market indexes, as well as your own individual stocks. Let me check the chat here for questions. I think that I told you Lee Boll was here. He was going to help me out answering your questions. So let us know. Shetha says the RSI shows oversold. Yeah, it shows oversold and overbought. And so if you come down here, see this purple line in the RSI grid? That 70 line is when the RSI goes above it, we call that overbought. When it goes down below the 30, which it looks like it got to today, looks like it got to 30.
13, okay? So once it crosses that 30, that then it goes into what we consider an oversold range. And sometimes there' s negative connotations about that oversaw or overbought, oversold. And so I want you to think of overbought as buyers are in control and oversold as sellers are in control. But then once they kind of go past those points, the 70 and the 30, we' re watching to see if any weakness, creeps in, all right, like a divergence, something of that nature. Let' s see, what else do we have here? Okay, so it' s out right there at the 70 and 30. One index we haven' It looked at yet is the Russell 2000. Now the Russell 2000, I would say overall, has been a little bit weak for the last couple of years.
And it was nice when it finally had a nice little run after kind of being the biggest loser. For several months on the end. And then, so it had a nice little run here at the end of the year. And then it had a nice little run here the first part of this year. In fact, it went back and had a high here at the over 2000. But the pullback that we' ve seen, generally when markets fall or pull back, they go down a lot more quickly than they went up, okay. There' s an old saying that says, price or trend. We' ll say, price. It climbs up stairs, meaning kind of methodical and slow, but falls out windows, right? Sometimes it' s like boom, boom, boom, and it' s down.
Okay, so the Russell 2000, we can see definitely below the 100 earlier this week, getting here to the 200. Now, sometimes we' ll see bounces at the 200. Sometimes that can be a place where value investors are like, okay, things are at a bargain, whether it' s on an individual stock or it' s on an index, and so buyers can come into the picture. Now, two weeks ago, I showed you a scan, and it was a scan that we could use for some stocks on our watch list to keep an eye and see if we maybe got an entry signal on them. I' m going to go to that scan real quickly. I don' t want to rebuild it, okay, but feel free to take some notes.
This is the scan we' re looking for stocks. Over $7, we' re looking for a PE ratio between 7 and 80, return on equity at least 15%, and then we wanted the stocks to have at least 500,000 in volume. You can have a lower threshold. I didn' t really mean to change that, so let me fix it. Alright, $500,000, and then we were looking for trends. We were looking for an intermediate trend, right? That' s what 65 bars are. It' s about a quarter, and we Re looking for the stocks to be up 5% there, and then 15% here, and 5% on a shorter-term moving average time frame, 21 days. That' s about a month, okay? We' re looking for several factors.
Now, I just ran this scan a few minutes ago. Let' s see. Get a couple more right now. Looks like we have 19 stocks that came back. The thing that I found interesting is I thought, well, I wonder how this compares. Okay, so I saved that watch list, all right, from that. Let' s see here. Let me see what questions I need to address. Oh, I like that hazard sign RiceBirds put out in the chat. Yes, at least to me, it looks like a hazard sign. Okay, so I do have a couple of things here. We' re going to go to the charts. We have our moving average. We' re going to go to the charts. We have our moving averages.
We have our RSI section down here, and I' m going to bring up our growth stocks watch list, and I' ll show you. It was this exact one, growth 4, 5, 24. That was two weeks ago on Friday when we had our class, okay? So this is the watch list on that day. Now, I' m going to do a little sorting on it. I' m going to sort it by the one month, and I' m going to start at the, I' ll start at the bottom, okay? Might not be the right way to sort it. I mean, it' ll be okay. I was playing with it in a different order than this, but has the trend changed here on Gap? Now, just answer to myself, or you feel free to chat it in, okay?
But I know there' s a lot of questions. A little bit of a lag from when I asked you until you actually hear it. Has the trend on Gap changed? Well, it' s not looking like it' s up here anymore, and it looks like if I were drawing in, say, a resistance line, we talked about support and resistance a lot last week. If I were to draw in maybe where that old resistance was, we would expect it to be the new support, and it looks like it dropped down below it, and it' s sitting around the hundreds. So I would say on GPS, yeah, trend. It' S probably changed, and you might not want that on your watch list anymore, okay? How about MSTR? This is Micro Strategies. You know, right?
When was the peak here? This was on March 27th, so it hasn' t even been a month. Had this nice little peak. Our 10-day is heading down, short-term moving average. Our 50 technically is still going up, okay? There' s a little bit of a lag before it gets to the micro-strategies. So I would say on GPS, yeah, trend. Moving averages that go out a little bit further in time. But if we were to say, well, where was the peak? Where did the previous peak? Where' s the previous low? You know, I' d say here was the previous low, and up here was the peak. And when it went past this area here, where that lower low was, went past it, then we' re like, oh, we' re getting lower lows.
And some people, if they' re watching the candles, really tight, they may say, well, this was an attempted run up here. They might say that is a lower high than up there, okay? So yeah, we' re starting to see lower lows and lower highs. When that happens to maybe a stock on your watch list, then you might say, okay, it doesn' t go on the watch list right now. It doesn' t belong. We' Re only looking for upward trending stocks, or maybe those are starting to go a little bit sideways, but still maintaining higher highs and higher lows. But those that have really violated it, it' s like, no, no, they' re off the list, okay? What if you' re in a trade and the trend changes? Has that happened to anybody before?
Yeah. Yeah, and I mean, even your paper trades that you' re practicing with. Yeah, it can happen, which is why we talk about, and we' re going to get into more next week, about why we decide where we need to get out when we get in. Where it' s not doing us any favors to continue to hold on to it, because we don' t need to hold on and ride the whole wave back, right? So you Rekindle of like back to your beginning point, or even maybe in a little bit of a loss.
