The Valuator



The image to the left illustrates the expanded version of The Valuator.
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Selecting The Stocks To Track  To create the list of stocks to be tracked in The Valuator, we start with the Reuters database of over 8,000 stocks.  We filter out all preferred shares (there are thousands) because it is very difficult to find charting programs that recognize the symbols of preferred shares.  If a company has preferred shares, it has common shares.  We also filter out stocks that do not trade on the day we create or update our list.  Such stocks either have extremely low liquidity, the exchange has halted trading, or the stock has been de-listed.  The company may also be under investigation by a regulatory authority.  When we finish with the filtering, we still have more than 4,000 stocks.  We then rank the stocks in terms of the dollars traded per day.  Finally, we selected the 1,050 highest ranked stocks on the list.  Because of the daily dollar amount traded, we consider these to be the most important stocks traded on the market.  The number of stocks being tracked by us at any given time will vary because of mergers, de-listings, additions, etc.  This publication is updated weekly.

Explanation Of Column Contents

Alerts  If a stock can rise 10% or more before reaching its C.G., a “►” is displayed at the far left.  If a stock can rise 6% or more, before reaching its C.G., a “♦” is displayed at the far left.  However, a stock with an “♦” alert may continue rising after it reaches its C.G. and end up returning 20% or more, just as a stock with a “►” alert could end up returning 20% or more.  That’s because stocks swing above and below their C.G.  These indicators are not recommendations.  They only highlight stocks that might warrant further attention.  A stock that is flagged with “►” or “♦” may fall even further below the C.G.  These alerts are given so you can focus your attention better.  Monitor these stocks and wait for them to begin a definite uptrend before you consider them for purchase.  You should be interested only in stocks that are low and rising, not in stocks that are low and falling.  Even with low and rising stocks, there may be overhead resistance that would make a purchase inadvisable.  Always look at a chart before making a decision.  Look at the bottom half of the “Stock Alerts” page for examples of “setups.”  Learn how to identify resistance.  Read our tutorials.

Company Name & Symbol These headings should all be self-evident.    

Flags This column shows where a stock is in its cycle. “Flag” defines eight positions in a stock’s cycle: 1. “HF” = High and falling, 2. “OF” = Overpriced and falling, 3. “UF” = Under-priced and falling, 4. “LF” = Low and falling, 5. “LR” = Low and rising, 6. “UR” = Under-priced and rising, 7. “OR” = Overpriced and rising, and 8. “HR” = High and rising.  Refer to Column “G” for clarification.  It gives two price ranges for each stock.  If a stock is below its highest low, we consider it to be “under-priced” and give it a”U” label.  Likewise, if it is below its lowest low, it is “low” (“L”).  If it is above its lowest high, it is “overpriced” (“O”).  If it is above its highest high, it is “High” (H”).

10-Day Mom This column shows momentum. Here, it is the percentage change of the stock’s price over the last 10 days.

Probable Low – High  Two probable price ranges are displayed.  The top figures reflect the 90% distribution envelope about the C.G.  That is, there is a 90% probability that the high will be between the displayed low and high.  It does not mean there is a 90% probability that the stock will reach the high or low displayed, but only that it is most likely to range between these two levels, based on the pattern of the probability envelope of price action over the most recent 50 days.  The “mean” in this case is the 50-day moving average.  The bottom price range is based on calculating one standard deviation above and below the C.G.  There is a 68.26% probability that the price will range between these two extremes, and a 31.74% probability it will move outside this range (15.87% probability above and 15.87% probability below).  We dropped numbers to the right of the decimals.  We did not average up to the next round number. 

Price C.G. This is the price at our computed “Center of Gravity.”  For this publication, we use the 50-day moving average for the “Center of Gravity.”  Bear in mind that while many stocks swing above and below their 50-day moving average, this does not always happen.  Also, a stock can remain above or below its 50-day moving average for very long periods of time.  That’s why a person should do a little research before buying any stock.  Also, a person should not buy a stock without it having generated a buy signal or unless it has, among other things, positive momentum.  Another important factor is overhead resistance.  For example, we would consider it to be foolish to buy a stock for $50 a share if there is resistance at $51 a share.  Please see the “Stock Alerts” page for information about “setups.”  Focusing on “setups” can greatly reduce risk when buying stocks.

 % To C.G. (or, “% To Center of Gravity”)  This is the distance of the stock from the “Price of Greatest Probability.”  If you take a wire or string and stretch it so that it is tightly drawn between two points, then pluck it, the string will vibrate up and down, repeatedly moving across an imaginary straight line connecting the end points of the string.  When the string stops vibrating, it will be perfectly aligned with that imaginary line.  The “Price Center” is the “Center of Gravity” (C.G.), “price of Greatest Probability,” or “target Price.”  For our model, this is what we use for “Fair Value.”  However, it is based on statistics, not on the ruminations of an analyst. It is based on the laws of probability and the actual just-taken measurements of the stock’s behavior  The assumption is that prices tend to “vibrate” or swing above and below the average price.  After all, a moving average is, by definition, the mean of all the points in a given period of time.  That makes the average the level of highest probability in that given time period.  We refer to the center about which all price swings converge as the “Center of Gravity” or “CG”  A stock is much more likely to move to its CG than to any other price, including its current price (unless it is at its CG)  A reading of 15% means that the stock must rise 15% to reach its “Center of Gravity.”  A reading of -15% means that the stock must decline 15% to reach its point of equilibrium.  A strong negative reading means that the stock has been very strong recently.  See if it has a high “Strength Rank.”  If it does, treat it as you would any high strength stock.  We post the C.G. for each stock tracked as well as the median for the entire group of stocks covered.  This indicator can be used to locate stocks that are “under-priced” and that therefore have appreciation potential (by returning to their CG).  Thus, the indicator can be used in more than one way.  Never use it in isolation from other analysis.  For example, just because a stock has a large number here does not mean it is ready to return to its CG.  Just because it has a large negative reading does not mean it will continue rising.  Look at the entire picture, not just at one indicator.  Also, look for the combination of a rising 50-day moving average and a decent “% to C.G.”  While a stock may return to its C.G. even if the 50-day moving average is declining, your chances are much better with a rising 50-day moving average.  [Note: stocks with high “Strength Rank” in a rising market will tend to have a strongly rising 50-day moving average.  Check it out.]  Also bear in mind that if a stock has a rising 50-day average, the stock is generally rising faster than the average.  If the average is falling, the stock is generally falling faster than the average.  Also, stocks above their C.G. will tend to get support at the 50-day moving average if they decline to that level.  Stocks below their C.G. will tend to encounter resistance at the 50-day moving average if they rise to that level.

Hi PE – Lo PE   Here we take the earnings over the last 12 months and compare that figure with the high price and low price over the same period to compute an approximate high PE ratio and lo PE ratio for the last year.  Some like to take the average of the low and high figures as an estimate of “Fair Value” relative to earnings.  Thus, the high PE would indicate “Very Overvalued” and the Low PE would be “Very “Undervalued.”  The region between the average PE and the High PE would be the overpriced range.  Thus, the distance the current PE is above the average PE is the amount the stock is overpriced relative to fair value.  A similar approach could be used for the range between the average PE and the Low PE in determining the amount a stock is undervalued.   

P.E. Ratio  This is the current PE-ratio.

Last Signal  This column reports the last signal generated by Donchian’s dual moving average crossover system.  If the 5-day moving average last crossed from above to below the 20-day moving average, the word “SELL” will be displayed.  If the latest cross of the 5-day moving average was from below to above the 20-day moving average, the word “BUY” will be displayed.  These are not recommendations.  Rather, they are the signals generated by Donchian’s system. If the crossover occurred months ago, but there have not been any crossovers since, the latest signal will continue to be displayed.   

14-Day RSI  Wilder’s 14-day Relative Strength Index.

Strength Rank % This is a percentile ranking.  For example, 90% means the stock is stronger than 90% of the stocks being covered.  It measures recent stock strength and gives greater weighting to stocks that show more consistency in their recent performance. A proprietary algorithm is applied to at least 4 separate measurements to derive this figure, and then the combined scores are ranked relative to each other. We have made extensive use of “Strength Rank” in developing our own watch lists.  We track the stocks identified by The Valuator as having a high Strength Rank and monitor some of the strongest, waiting for pull-backs.  Even when investing in these stocks, investors should wait for a pullback (they should try to time their entry to coincide with when the stock has pulled back to its rising trend-line and then wait for a “trigger event.”  The trigger event would be a sign that the stock is rebounding off its rising trendline.  In other words, new buyers are accumulating the stock.  Some stocks highly ranked in this column may have simply gapped to a higher level because of speculation related to a possible takeover by another company. Such stocks may have limited upside potential. Whether or not this is the case for a particular stock can be determined by a visual inspection of its chart. We tend to avoid stocks that have suddenly started trading at a much higher price.

Value Rank is the percentile ranking of the “% To C.G.” figure in the table.  That is, it ranks the figure in that column in comparison with all the other “% To C.G.” readings.  [Note: Percentile ranks are always positive, even if what is being ranked is negative.]

Std Dev  This is the standard deviation of the stock over the last 50 trading days.  This figure can be used to position stop losses based on the stocks own normal volatility.  Usually traders multiply this number by a certain amount (1.5, 2.0, 2.5, etc.) then subtract the result from the recent high, low, or close to locate the sop loss. Experiment a little to see what multiple of this figure works best for you.    

Avg True Range  The Average True Range (ATR) is a measure of the average change in price from one day to the next. The ATR does not take the actual change in closing price each day and average those changes. Instead, the ATR is determined by computing the maximum of several ranges from one day to the next. This range is generally greater than the actual change in closing price and it factors in any price gaps from one day to the next.  The Average True Range (ATR) we post is the average of the True Range of a stock over the most recent 14 days.  This figure, or a multiple of this figure, if often used to determine the placement of a stop loss.

Who is Winning?  This is located at the top right corner of the spreadsheet.  This indicates the ratio between positive momentum stocks and negative momentum stocks.

In the above graph, positive numbers represent potential gains.  A stock showing +34% is below its C.G. and must rise 34% to reach its “Center of Gravity.”  Look for stocks that have a positive number for potential gain that also have positive momentum.


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Published by Dr. Winton Felt

Dr. Winton Felt Educational background. Dr. Felt did his graduate level studies in Systems Engineering/Applied Mathematics, English, Management, and Clinical Psychology. During a good portion of the time he was involved in his graduate studies, Dr. Felt also operated his own business, teaching advanced reading and study techniques at four colleges in Southern California, and conducting special classes for various Christian organizations. General history of securities-related experience. Felt began his study of security trading patterns (emphasizing the “point-and-figure” method and outcome probabilities associated with various patterns) when he was in his early 20's. He became a professional in the financial services industry in 1985. He did his basic brokerage training at Merrill Lynch and achieved perfect scores on the “Series 7” in the areas of “Portfolio Analysis” and “Investment Strategies.” At Merrill Lynch he became the “Mutual Fund Coordinator.” A few years later, he was recruited by Bateman Eichler, Hill Richards (Everen Securities) to finish the development of a stock-trading system and to use it in managing a pooled account. He then founded Asset Management Systems and continued his work on the development, analysis, and evaluation of investment disciplines and strategies. He used multivariate analysis to test the profitability of more than 50,000 investment strategies. He then used the results of his analyses to design high total-return strategies. He also wrote algorithms to enable a computer to search through thousands of stocks to identify those that have any of a variety of behavior patterns known as "setups," price and volume configurations that most often occur shortly before a price surge. Dr. Felt created the Market Bias Indicator (MBI), also known as the Felt Oscillator, the Force of Trend (Group Pressure Gradient) indicator, and a procedure for discovering what he calls "Key Intraday Levels." He managed portfolios, created investment disciplines, created the publication originally known as Value Indicator (later renamed The Valuator), created what was originally a 70-page weekly publication known as StockAlerts (our present StockAlerts subscription service is a derivation and subset of this no longer available publication), and was the founder of Stock Disciplines, LLC. Work and licenses before becoming the principal officer of Stock Disciplines, LLC. Dr. Felt has held various licenses as an investment professional. During the years immediately before he became the principal officer of Felt Financial, LLC. (through which he managed investment advisory accounts), Dr. Felt held a “Series 7” General Securities license and was registered with the NASD. He also held a “Series 24” license issued by the NASD. A “Series 7” will qualify a person to be a “Registered Representative” or “Investment Broker,” and is the license held by the more qualified “brokers” at major brokerage houses. This license is a prerequisite to sitting for the “Series 24” exam. The “Series 24” license is required for those who supervise other brokers (securities regulations stipulate that every Broker/Dealer firm must have at least one individual who is licensed as a "General Securities Principal"). Having both a “Series 7” and a “Series 24,” Dr. Felt had the NASD designation “General Securities Principal” (it should be noted that registration and licensing by the State of California, the SEC, or the NASD does not represent a mark of approval or endorsement by these regulatory bodies, but that certain standards of knowledge and other requirements have been satisfied). During this time, Dr. Felt was affiliated with Titan Value Equities Group, Inc. as a Registered Representative, a Registered Principal, an Advisory Associate, and as the manager of an Office of Supervisory Jurisdiction. Felt Financial, LLC. (of which Dr. Felt was the principal officer), remained in the investment advisory business as a Registered Investment Advisor until December 31, 2005. After that date Felt Financial, LLC. became Stock Disciplines, LLC., and the firm (and Dr. Felt) stopped providing investment advisory services (use the link below for more on why the advisory business was abandoned). Dr. Felt has also conducted investment strategy seminars and tutorials for investors and brokers. Past Affiliations. Biola University in La Mirada, Asset Management Systems located in Costa Mesa and Newport Beach, and Felt Enterprises with primary locations in Oceanside and Carlsbad in California, USA. Articles Published. To see a few articles written by Dr. Felt, click on Articles. If you know or have ever met Lawrence, Carolyn, Winton, Shirley, Wendy, Anthony, Larry, or Gail, we have a message for you. Read The Message For more on Dr. Felt's strategy testing and why he stopped managing money for others, see item #10 after clicking on Leaving the advisory business. Return to About Us for information about the company. View