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People use scanners to find gaps, new highs, breakouts, Bollinger band penetrations, or whatever. Why? They look for these situations because they often mark the beginning of a significant move or trend. Those with experience with most scanners know that there is usually a big difference between what they are looking for and the output of the scanner. Not only that, but the conditions searched for often fail to produce the new surge or trend.

However, If a new trend actually does develop after a gap up, a new high, a price breakout through resistance, a Bollinger band penetration, or whatever else a person might try to find with a stock scanner, that new trend will produce a moving average crossover early in its development. Scanning for moving average crossovers will detect all new trends regardless of how they get started.

This scanner's most sensitive crossover occurs when the 3-day moving average crosses the 10-day moving average. This system picks up a move at its earliest stage. We have added to this system a series of less sensitive (but perhaps more meaningful) crossover systems, including the 5-day moving average cross of each of the following: the 15-day, the 30-day, the 50-day, the 100-day, and the 150-day moving averages. We scan thousands of stocks. This set of six scanners covers a broad spectrum of crossovers and the collection as a whole acts as a kind of radar designed to pick up any significant movement. Each of the systems also requires a volume surge on the crossover day.

We use two volume measurements to screen “alert candidates.” The first of these is the 1-day change in volume. (See column 6 in the above image. Incidentally, that image was taken when the market was in decline.) For example, if an "Up” alert crossover has just occurred but the volume has declined, then the "Up” alert is not trustworthy. We usually require a minimum volume surge of 50%. However, we may modify this requirement as the situation demands. For example, 500 alerts are far too many to post, so we might require a much greater volume surge in order to reduce the size of the list (the market is probably booming and greater differentiation is needed). Other days we may lower the volume surge requirement. We indicate for each report the minimum volume surge requirement that was used. We also provide the actual volume surge numbers for each of the stocks in the report so you can be more demanding if you wish. The second way we use volume is by comparing the average volume for the last 3 days to the average as of 4 days before (column 7 in above image). If the average volume for the last three days has declined, an alert will not be generated because the volume decline renders the alert “untrustworthy.” The reason for using a 3-day average of the volume is that a volume surge sometimes occurs just before the day of the crossover instead of on the day of the crossover. This 3-day measurement should detect a volume surge even if it took place a day or two before the crossover. Because the average volume four days earlier would not reflect the recent volume surge, it serves as a good comparison reference for the last three days. Again, we provide the numbers so that you can be more rigorous in your requirements.

We also provide the price change for the day so you can use the magnitude of price change as a filter. Obviously, a crossover with a price surge is of greater interest than a crossover without a price surge. Such crossovers are also less likely to whipsaw. This metric could be used in combination with volume change/surge information.

In addition, the Welles Wilder Relative Strength Index (RSI) is provided for each stock that generates an alert. The reason for including the RSI is that it provides an additional screening mechanism for those who want it. If a stock has an upward surge during its crossover, the RSI will be higher than if it does not. For example, a person could "filter" through the stocks that have generated an "Up” alert by ignoring alerts that are not accompanied by a higher than average RSI reading. The threshold of what is acceptable could be set at any level. Higher RSI readings also tend to reduce the probability of a whipsaw.

The purpose of this scanner is to help you find any stocks that are just beginning a new trend. The components of our scanner all look for crossover events in either direction. The scanner generates an alert for each crossover, names the stock and gives its symbol, identifies the system that generated the alert, identifies the direction of the crossover, gives price and volume surge information, and provides a Relative Strength (RSI) measurement.

Scan results are posted daily for subscribers.

SKU	SS-001
Qty	1

Annual Fee: $125.00 Reduced Rate $75.00