A SignalEdge signal is not a hunch. It is what is left after a fixed set of rules has said no to almost everything. Here is the daily process, in the order it runs.
1. The scan: 104 companies
Every market day starts with the same universe of 104 large, liquid companies. The list does not change based on what is popular this week.
2. The SPY regime gate
If SPY is below its 200-day moving average, no new positions are opened, full stop. The broader market sets the weather, and we do not sail into storms.
3. Volatility contraction
For each remaining stock we look for volatility that is shrinking. A stock settling down after a pullback behaves very differently from one still swinging wildly.
4. The 7-day earnings blackout
Any company reporting earnings within the next 7 days is removed. Earnings moves are a coin flip we choose not to take.
5. The VIX gate
If VIX is at or above 35, nothing qualifies. Extreme fear means extreme unpredictability.
6. 2-day persistence
A setup must hold for 2 consecutive days before it counts. One good day is noise. Two is a pattern worth looking at.
7. The distribution-day overlay
We count SPY distribution days, sessions where the index falls on higher volume, over the last 25 sessions. At 8 or more, we stand aside even if everything else looks fine.
8. The Connors time exit
Exits follow a rule popularized by Larry Connors: a position closes on the first close above its 5-day moving average. No targets to tweak, no hoping. The rule decides.
What reaches you
If a stock clears every gate, it becomes a Research Opportunity in the Daily Brief, with every reading shown. If nothing clears, the Daily Brief says so and shows which gates stood in the way.
Discussion
Which of these gates would you have expected to filter out the most stocks? Share your guess in the comments.
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