Invest and Trade Profitably with Jon Johnson

Education Center

Please explain more about the ECRI as a forecaster. Do we have access to these figures and their interpretation?

August 30, 2000

The Economic Cycle Research Institute puts out a weekly gauge of leading economic indicators and also calculates a 6-month leading indicator as well as an inflation indicator. There is a website at Not all of the information provided is free. You can get historical data free, but not the current data. The ECRI has […]

When you list a stock in your newsletter, and a buy point, and it doesn’t meet it in the first week, do you continue to watch it, and if it hits that buy point say a month later, then do you still buy it?

August 30, 2000

We always continue to watch stocks that have been in the reports even if they do not hit the buy points. Many times a stock will be in a base and looks close to breaking out, but needs more time. As long as the pattern holds, we will continue to look at the same buy […]

You often mention trading channels and I know you use TC2000 for charting. Could you share your settings for these channels? (envelope channels in TC?) And, do you ever use Bollinger Bands?

August 30, 2000

The channels we discuss are not generated by any charting service tools. What we are doing on these and what we teach in the online seminars is to draw a trendline for the stock or index. It could be an up trendline or a down trendline depending upon which way the stock or index is […]

Can you explain the advantage of and what exactly is a covered call and how to do it?

August 30, 2000

A covered call is where you sell a call option on a share of stock you own. What you are doing is selling the right to buy your stock at a specified price (the strike price) to someone else. Sounds pretty crazy at first, especially if you want to hang onto your stock. However, as […]

You have been referring to the small and mid-cap indexes frequently lately. What are the ticker symbols for them?

August 30, 2000

Predominantly we look at the S&P 600 (small cap) and S&P 400 (mid-cap) to get a look at what these stocks are doing. The S&P 600 ticker is $SML. The S&P 400 is $MID.

On your comments on SGI (The Daily, 4-1-02), you state it pulled back on higher volume to close with a doji. I thought we want to see the pull back on lighter volume? Is it the fact that it closed on a doji that the higher volume is good on this pull back?

August 30, 2000

Yes, you are correct on the general idea that pullbacks on higher volume are usually not a good thing. The reason SGI was more appealing Monday night is that it pulled back on low, below average volume the prior week, but the past two sessions it is trying to find support at the 18 day […]

I would like to know if you still consider a stock a buy if you miss the buy point on a gap up but the stock pulls back to the point during the day.

August 30, 2000

From your question I assume the point the stock pulls back to is the buy point. There is a reason we picked the buy point; usually it represents a break over resistance. When resistance is broken it is ‘soft’ support, i.e., it should hold as support on a test lower. It does not become ‘hard’ […]

Can you explain the term “DELTA”?

August 30, 2000

Delta is the measure of how much an option price changes for every move up or down in the underlying security. A delta of 1.0 means that for each $1 move in the underlying stock, the option moves $1 as well. A delta of 0.50 means for every $1 move, the option moves $0.50 in […]

Can you please tell me what web site I can go to that will tell me the volume & A/D line during the trading day on the NYSE and Nasdaq?

August 30, 2000

On the web you can get very current data on volume and advancers versus decliners at

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