Invest and Trade Profitably with Jon Johnson

Education Center

How do you determine the exact buy pivot point of any stock breaking out of cup w/handle?

August 30, 2000

The buy point is based on the theory of the pattern. The idea behind a base is that it weeds out those that do not want to hold the stock for the long term. As the stock works through the base more and more shorter term holders get out. As the stock makes its way […]

Love your table, but I cannot tell whether the plays are puts or calls in the cases of “Test BO”, “cup hdl”, “Test 18 or 50”, etc. Could you explain these further?

August 30, 2000

Puts are under specific headings, usually just ‘put.’ We do have other put designations that we use at times. These are ‘D Wedge’ for descending wedge; ‘Dbl Top’ for a double top; and ‘H&S’ for head and shoulders. Each of these are bearish patterns representing downside opportunities. We usually designate them as ‘put’ in the […]

I have heard from others to always exit a pre-split play before the split date, to be out no later than the pay date–no matter what. Do you ever take this stance as well?

August 30, 2000

Static approaches to the market usually land you in trouble. We are always looking at the dynamic processes in the market, and playing pre-splits is no different. In an established bull market, the ‘typical’ split play is to get in before the announcement to get any upside on the bullish news. As we have seen […]

Can you tell me how the exact pivot point is determined?

August 30, 2000

The pivot point is a phrase that is equivalent to the ‘buy point’ on the reports. The buy point was named this by many traders as it is said to act as the crucial point that ‘pivots’ a stock out of its prior range and over the resistance that is at the top of that […]

Would April 15 (tax day) have any effect on selling pressure from institutions this week?

August 30, 2000

Tax selling is something that occurs before the end of the taxable year. April 15 is the date set by the government for individuals to pay their taxes. Thus it has no real significance as far as institutions moving in or out of stocks.

Can you explain what a mixed shelf is? For example, Raytheon announced a $3 billion mixed shelf.

August 30, 2000

A “mixed shelf” has to do with the registration of securities with the SEC. When a company does a “shelf registration,” they are registering securities to issue at some future, undetermined date as needed from time to time, saving them from having to update the registration statements every time there is an issuance of securities […]

Last week you described seeing a buy program kick in. How do you know when a buy program is initiated?

August 30, 2000

Many times in a dull market that is trending steadily in one direction you will suddenly see a spike in activity in the other direction. There are normally the usual bumps up or down in an intraday downtrend or uptrend, but when a big spike comes in from nowhere, that is something that indicates a […]

Why do you like to go so far out (month-wise) when you offer a stock that is optionable?

August 30, 2000

One thing we have found over the years is that time can be your friend, particularly when the market is choppier as we have seen of late. With options one of the things you are paying for is time. The more time you buy before expiration, the more you pay for the option. Many option […]

How can we tell which stocks are for trades and which are for long term holds?

August 30, 2000

In the market that we have had we have been very reluctant to hang onto many positions longer term with breakouts racing up for a good gain and then turning over and giving it all back. Thus we are taking gains on nice moves on breakouts and the other moves we are investing in. We […]

How should your readers go about choosing the stocks to invest in from the newsletter?

August 30, 2000

Our method of investing and making money in the market is different from many places. Most brokers or managers want you to buy into a stock and sit in it for a long time. You buy it at a low, ‘value’ price, and sit on it until the rest of the market decides to buy […]

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