The following describes my interpretation of the trading approach described by Jack Hershey on Usenet, several MSN Web Sites, and the EliteTrader.com web site. The contributions of Jack Hershey, Don Cameron, David Marshall, Nwbprop, Vorzo, JVBraun, inandlong, Max Gainz, Supahfly, and many others have also been included to clarify or to augment the process with automation. Many thanks to all for the many hours of work freely contributed by everyone involved.
The âJack Hershey Equities Methodâ seeks to produce a trader who can reliably make 10% about every two weeks (6-8 trading days) trading equities either part-time or full-time. One can obtain background information, and a complete discussion (both supporting these methods and decrying these methods) available at the following web sites, discussion threads, and / or Google Archives:
http://groups.msn.com/JackHersheysStrategies/general.msnw?action=get_threads
http://sputnick5.www8.50megs.com/
http://mycoolstars.hypermart.net/
http://groups.msn.com/ShortTermStockTrading/_homepage.msnw?&pps=k
http://www.elitetrader.com/vb/showthread.php?s=&threadid=23543
http://www.elitetrader.com/vb/showthread.php?s=&threadid=21354&highlight=Hershey+Equities
http://tinyurl.com/6956z
I strongly urge reading the enormous volume of information supplied by Jack Hershey and others archived at the above locations. After reviewing the above web pages and an entire library of documents associated with The Jack Hershey Equities Method, you may notice two variations on âcreating the initial universe of stocks.â The first method utilizes TC2000 software and numerous equations to develop the various lists. Jack has described this method in the past, but currently teaches his methods utilizing the stocktables.com web site. The following procedure involves using the stocktables.com web site as well.
Log onto the
http://www.stocktables.com web site. You can utilize the two-week free trial to avoid paying for a subscription. The following settings will produce a list of stocks we will call the âinitial universe.â
RS > 80
EPS > 90
Dollar min 10
Max dollar 50.
All is everywhere else.
Sort by % Volume Change.
Your initial list of stocks should total near 100. Alter the RS and EPS settings to achieve the number. We now create three lists. Each list signifies a score for the individual stock. The scoring process uses the Price, Volume and Accumulation / Distribution relationship. Jack Hershey uses a binary scoring system. The stocktables.com web site version of Jackâs Methods creates three lists already scored â zeroâs, oneâs and sevenâs.
The First list of 10 stocks comes from the bottom of the list working your way up, filtering out stocks with Volume < 200,000. The Second list of ten stocks comes from the top and working down, selecting only stocks with price gains. The Third list of 10 stocks comes from the middle of the stocktables.com chart where the volume change is zero. Take five stocks above and five below the middle zero selecting stocks that have greater than 200,000 volumes.
The short list from the bottom I entered as portfolio "1's". The short list from the top I entered as portfolio "7's".
1's are the bottom ones. The top ones are 7's. The middle ones are 0's
Then rank all thirty of the above stocks (three lists of ten) using:
http://www.wealth-lab.com/cgi-bin/WealthLab.DLL/editsystem?id=32994
Stocks that return no rank are given a rank of zero. Keep all the stocks that have a rank (other than zero), and sort them from highest to lowest rank.
You will then have created your top 10 "Hotlist"
Then you must: Eliminate any stocks that do NOT:
1. Have a float less than 60,000,000
2. Have a float greater than 5,000,000
3. Have a 65-day average volume above 200,000 shares
4. Have positive EPS.
****Remember: The above 4 points MUST apply to the stocks you KEEP. If the stock doesn't have the above 4 criteria, you MUST eliminate the stock from your Hotlist.
Mark the Dry Up (DU) Value for each Hotlist Stock. When a stock reaches DU Volume on a particular day, then reaches the same volume by 11:00 AM the next day, while in an uptrend, it is a signal to go long the stock. First: MACD (5,13,6) needs to be in the green. Second, I want to see The Stochastic (14,1,3) in the 75 range or higher. Third, price should be increasing. Sell in 4 days OR when the stock appreciates to 10%.
Stops should be placed at 5% below the equity price.
Each day, work through the above procedure - saving the Hotlisted stocks into a file called âFinal Universe.â As you add more and more Hotlist stocks to this file you will notice the number of stocks increasing in your âfinal universe file.â Run these stocks through the Chart Script at WealthLab.com to determine dry up levels for these stocks as well. Stocks in both your âFinal Universeâ and the Hotlist file should be monitored for buying signals. Stocks in the final Universe that lose their rank should be eliminated.
The first day you run through the above procedures, you will only have the âHotlistedâ Stocks to evaluate. Each consecutive day, as your âFinal Universeâ of stocks grows, you will have an increasing number of possible buying opportunities.
Currently, my âFinal Universeâ contains 32 stocks. When a stock appears in my daily Hotlist NOT appearing in my Final Universe, I add that stock to the Final Universe list for daily evaluating. When a stock loses its ârankâ (by failing to maintain 5 cycles of 20% price improvement in a six month period) I remove that stock from my universe list.
The above is an overview of the methods I use. A more detailed explanation can be found within the many documents and posts located at the above web sites. Should anyone require additional clarification on any of the procedure or methods listed above, please feel free to ask me to explain in greater detail.
