Moving Average

Minervini walks through four recent positions that broke out from valid bases but then showed violation patterns: Burlington showed only 2 up days out of 6, four lower lows, and rising volume on down days. Activision showed the classic distribution pattern of low volume out and high volume in, plus closes below the 20-day and 50-day moving averages. Z-lab showed no follow-through and four to five lower lows from day one. In all four cases, the violations appeared before the hard stop was hit, providing an opportunity to reduce or exit early. The lesson: getting stopped out quickly is a feature, not a failure.

"Would you rather have it stop you out three months later and get the same loss, but then you lost three months of time?"

Ryan's sell discipline works at two levels. For a stock just bought that fails: if it breaks back into the base after a breakout, it goes. For a stock with a significant gain: he watches for a change in the angle of ascent — when a stock that has been climbing steadily begins moving more vertically on high volume, the climax run is near; he trims into strength incrementally rather than waiting for an obvious top. For stocks already extended — UPSC went from 150 to 400 in three months — he advises watching for pullbacks near the 21-day moving average for possible re-entry, rather than chasing. The math of further upside versus a 30% correction changes dramatically once a stock has already made the big move.

After a pullback in SNDK, Ted explains his framework for re-entry: he waits for the stock to reclaim all key moving averages with all slopes rising before adding. He specifically uses the 20 SMA rather than the 8 or 21 EMA because the SMA keeps him out of false starts and reduces frustration — a principle he frames as maximizing reward-to-aggravation, not just reward-to-risk. The inside day low-volatility contraction, confirmed by his RMV indicator flashing below 5, is his precise entry signal. He never adds to a loser — averaging down is explicitly rejected. All position additions come into winning trades with confirmed momentum behind them.

As SNDK extended into a parabolic move, Ted's approach was to build a position cushion through partial sells at technical resistance and ATR extensions rather than holding everything for maximum gain. The mindset: 2.5% per month compounding equals roughly 35% per year, which is world-class portfolio management — the goal is to protect gains so the cushion allows more aggressive positioning later. A 10 ATR extension above the 50-day was his trim signal; a bearish engulfing candle on high volume warned of a potential reversal. His acknowledged lesson: he was undersized in this trade (one of the two best opportunities of early 2026), and a pyramid to 7.5% would have made the year in a single position.

Ted walks through the GLD trade as a case study in a non-earnings momentum setup: gold has no EPS, but it checks every other magic elixir criterion — narrative (de-dollarization, debt, geopolitics), liquidity, high linearity, and a 10-year cup-with-handle base. He initially passed on an earlier base feeling it was too slow, then re-entered when gold reclaimed all moving averages with tight volatility. Partial sells were triggered by ATR extension signals, and the final exit came when gold closed below the 10 EMA — coinciding with futures closing below the same level and a macro shock (hawkish Fed chair nomination + CME margin hike) that forced a liquidation cascade. The lesson: commodity trade exits require cross-referencing the futures chart, not just the ETF.

Ted quickly applies the same magic elixir framework to three more positions. Nugget (a leveraged GDX product) was a small starter at a 20/50 moving average reclaim with an RMV flash; it worked immediately and he pyramided into strength as a prior high became support. Silver (SLV futures) exhibited near-perfect linearity — consecutive tight flags holding the 10 EMA — and his one regret was not pyramiding more aggressively at all-time highs; a bearish engulfing triggered his first trim but he held through two 10-EMA undercut-and-reclaims before the final new high squeezed shorts. Palantir was an episodic pivot trade off a guidance beat: he bought the gap up and held a linear trend above the 10, trimming at the measured-move target.

Tito's framework has three layers. Right stock: relative strength versus the index, tight technical setups (bull flags, pennants, wedges), volume confirmation on breakouts, drying volume during bases, and multiple timeframe alignment. Right sector: identify leading themes and find multiple leaders in the same group. Right market: even the best setups fail at a higher rate when the indices are under their short-term moving averages. He cites Oliver Kell's price-cycle work as a significant influence on how he thinks about basin-breaks and wedge-pops.

"The three pillars: right stock, right sector, right market. Even the best setups tend to fail a lot more when the market is not supportive."

Tito describes his Apple earnings trade: he held options while the stock 'surfed' above its 10 and 20-day moving averages in the weeks heading into the report. Apple beat and guided up after hours. He had held options overnight that initially opened down 70-80% as the gap was digested, then watched the IV explosion add fuel as the market makers repriced. The segment covers when to hold into earnings versus when to sell before the event, and how to calibrate overnight risk with options.

"Coming into earnings, this is what Kristjan Qullamaggie calls surfing on the SMAs — you're just riding a trend that's still intact all the way to the catalyst."

Schwager traces trend following from Ed Seykota's era in the late 1960s — when running a simple moving average program on a brokerage firm's mainframe over the weekend was so unusual that the edge was enormous — to today, when every retail trader has access to the same tools and concepts. As trend following became widely known and universally taught, the edge degraded: more practitioners created more fake breakouts and shorter-term counter-trend moves that made staying in trends far harder. The underlying rationale still holds — real supply-demand imbalances take years to resolve, so genuine trends exist — but the return-to-risk ratio has compressed substantially and drawdowns have grown.

"Once it becomes too popular, you start getting a whole bunch of fake breakouts and very short-term wild swings. The trends are still there, but they become choppier — and the edge that once printed money is now much smaller."

Once in a position, Kristjan trails his stop to the 10-day or 20-day moving average depending on how fast the stock is trending. He takes partial profits on the way up to reduce risk and lock in gains while keeping a core position running. When a stock he already owns forms a new consolidation and breaks out again, he treats that as a completely fresh trade with its own rules — the original position is managed separately. This framework keeps him from cutting winners too early or violating his risk rules when adding to a hot name. Using a trailing stop on each tranche means the worst outcome on any add is losing a defined amount, never letting a winner fully reverse.

With the broader market in a neutral state, Weinstein identifies where genuine leadership is showing up: biotechnology has been almost universally strong, semiconductors and AI-related names have been outstanding, and the Russell 2000 has finally broken above its 200-day moving average after a prolonged period below it. The Russell breakout is particularly meaningful — when small-cap stocks join the large-cap leaders, the rally becomes broader and more credible as a sustained move rather than a narrow tech-driven spike. This broadening of stage 2 action across sectors is what Weinstein looks for to confirm a genuine change in market character.

Weinstein explains why stage analysis creates the most favorable risk/reward environment for active traders. When a stock has been thoroughly destroyed during a stage 4 decline and has since built a base, the emergence into stage 2 with moving averages beginning to turn up creates an entry where the natural stop is close and the potential upside is large. Buying into stage 3 or stage 4 reverses this equation entirely: the easy move has already been made and downside risk far outweighs remaining upside. The system's entire edge comes from entering early in the cycle, before the crowd has recognized the opportunity.

Drawing on four decades of navigating every major market cycle, Weinstein argues that trader failure almost never comes from a bad system — it comes from overriding a good system when it becomes uncomfortable. His rules are deliberately simple: regardless of how good the fundamentals look, if a stock is in stage 3 or stage 4, stay away. If the moving averages are declining and price is below them, there is nothing to debate. He reflects on how his track record of catching every major bull and bear market since the 1970s came not from brilliant forecasting but from following a consistent, non-negotiable process through every uncomfortable moment.

In a live walkthrough of his Global Trend Alert newsletter recommendations, Weinstein reviews both successful positions and trades that did not work — narrating exactly what he sees and why each chart passes or fails his standards. He explains how the 50-day and 200-day moving averages define the structural backbone of any stage 2 setup, how the slope of those averages indicates stage health, and what distinguishes a genuinely high-quality base from a merely acceptable one. A chart that otherwise looks like a stage 2 setup but has nearby overhead supply — prior resistance from previous highs — gets downgraded: buyers will need to work through that supply before the move can fully materialize.

"It's not an A-plus chart because you do have supply."

Weinstein explains a fundamental change he has made to his exit rules to account for the dramatically higher volatility of modern markets. In earlier decades, his primary exit trigger was a close below the 150-day or 200-day moving average. Today, with stocks capable of dropping 20–30% in days rather than weeks, waiting for those slower signals means absorbing losses that are difficult to recover from. His updated rule: when a stock closes below the 50-day moving average, he exits immediately, without debate. He frames this not as pessimism but as adaptation — the mechanics of stage analysis remain intact, but the specific thresholds have been recalibrated to match the reality of how fast modern markets can move.

"I'm totally disciplined. I never argue with my system."

Weinstein walks through a series of charts to explain how gaps function as signals of institutional conviction. When a stock gaps up as it transitions from stage 1 to stage 2, confirmed by a move above its long-term moving averages, that breakaway gap is one of the strongest buy signals available. Even more powerful: when a subsequent pullback fails to fill that gap, it demonstrates that real demand stepped in and held price above that level. He notes that while roughly 90% of gaps eventually get filled, the 10–15% that do not — including a gap from 1962 on the Dow Jones that has never been filled — carry exceptional predictive power. News-driven gaps that fill quickly signal the opposite: the move lacked institutional backing.

"The 10 or 15% that don't get covered — that's a very powerful signal."

Weinstein continues the gap analysis, showing how the same gap pattern that signals a strong stage 2 entry becomes a warning when it appears in an extended stock. Using the Nvidia chart, he identifies how a third or fourth gap — appearing late in a significant move, far above the moving averages — shifts the probability from continuation to exhaustion. When that late gap is followed by a terrible close on heavy volume, the warning is clear. He explains that he trimmed Nvidia positions for clients on exactly this analysis, separating the short-term tactical view from the long-term thesis: Nvidia remains a strong company, but the technical evidence argued for reducing exposure after the exhaustion pattern appeared.

"That to me is an exhaustion gap. It's late in the move."

Weinstein walks through a series of stocks on his sell list, demonstrating the recurring patterns that signal stage 3 and stage 4 breakdowns: double tops followed by 50-day MA breaks, systematic series of lower peaks indicating distribution, and head-and-shoulders patterns that breach both the 150-day and 200-day moving averages. Each break of the 50-day MA is a warning — individually survivable but collectively diagnostic. He closes by introducing his 4B- rating: a stage 4 stock that has been thoroughly destroyed, built at least a small base, reclaimed the 50-day MA, and has room to run with no nearby overhead supply. For short sellers, the 4B- is the signal to cover; for aggressive early-entry traders, it marks the first point where a tentative long becomes defensible.

"Each one is a small warning — a warning heart attack."