COIL

Method

Mark’s rules, as written

COIL only lists a name when it clears the published SEPA / VCP checklist from Trade Like a Stock Market Wizard and Think & Trade Like a Champion. The base is read on the weekly chart. The 50/150/200 template and the buy are daily. Near-misses stay off the scanner.

Closed candles, then the trigger

Mark builds the list after the weekly close. A Wednesday bar with three days of volume is not a dry-up — it is an unfinished week. COIL drops the forming week from the pattern, the volume ratio, and the grade. You still see it on the chart (hollow).

A completed VCP is a Watch. The buy is Act now: a closed daily bar through the pivot at least 1.4× the 50-day volume. A poke above the high on quiet tape is not the trigger. Cheat is a separate, optional early entry — not a second official buy. The Lab only records Act now prints.

The cheat is optional

Mark sometimes buys tightness inside the base instead of waiting for the official pivot. The cheat is its own action, not a second Act now.

  1. Only on a completed VCP whose last coil is already tight (≤ 6.5%). Wide bases do not get a cheat.
  2. A 3–10 day pocket sitting under the pivot, in the upper part of the base, range ≤ 5.5%.
  3. The order is a close 10¢ through that pocket high. Volume does not need to be 1.4× — this entry is quieter on purpose.
  4. If the official pivot prints on volume, Act now wins. You are no longer cheating. The stop stays under the last coil, ≤ 8%.

Treat Cheat as permission to take an early swing on the best coils. Treat Act now as the system. The Lab still only scores the official buy.

Not just the S&P 500

He does not restrict himself to the S&P 500. Superperformance names are often mid-cap, small-cap, and names that never made an S&P index at all. He also does not trade pennies. The Desk now hunts US listed common stocks (Nasdaq, NYSE, NYSE American), then throws out anything below his liquidity floor: price ≥ $15, 50-day dollar volume ≥ $20M, 50-day volume ≥ 400,000 shares. Index membership is a label, not a gate. A name that drops out of the SmallCap 600 stays on the list if the tape is still liquid. Listings refresh weekly so IPOs can appear and delists disappear. The full hunt runs once after Friday’s cash close. That list is stored. Mid-week we only refresh Act now / Cheat on names already on the desk — we do not re-walk 5,000 charts for a forming week.

Trend template — all eight

Mark does not negotiate these. The old scanner allowed 7 of 9. That is gone. A name that fails any one check is not a setup.

  1. Price above the 150-day and the 200-day.
  2. 150-day above the 200-day.
  3. 200-day rising for at least one month — four to five months preferred, and required for A+.
  4. 50-day above both the 150-day and the 200-day.
  5. Price above the 50-day.
  6. At least 30% off the 52-week low — official template. Leaders are often 100%+ off that low. We do not buy bottoms.
  7. Within 25% of the 52-week high — A+ must be inside 15%.
  8. RS rating 70 or higher — 80+ for A+, 90+ is the concentration zone.

The VCP itself

  1. A leading advance first. The base has to pause a real Stage 2 move — at least 30% into the first peak. We do not buy bases off a low.
  2. Two to six contractions, each tighter, in one base. Classic is 3–5 waves. A March pullback plus a June flag after a new rally is two patterns, not one VCP. A two-wave name only prints if the last coil is ≤ 5.5%, volume is dry, and the stock is already near the high.
  3. Opening pullback 10–35%. Under 10% is not a base unless it is a 3-wave coil whose first dip is still at least 8% and whose last coil is ≤ 5.5%. Over 35% is usually damaged.
  4. Final coil ≤ 8% — ≤ 6% for A+. That last tight range is the line of least resistance.
  5. Higher lows through the base. A lower low is a breakdown, not a coil.
  6. Volume dry-up. Last-pullback volume ≤ 75% of the first (≤ 60% for A+). ATR and a quiet 10/50-day tape are A+ extras, not vetoes.
  7. Still in the base vs the pivot. Names can sit as Watch up to about 12% under the buy point. Failed breakouts and names already more than 5% extended are rejected.

Earnings and sales

SEPA is not a chart-only system. After the weekly coil clears, COIL checks the current quarter against the year-ago quarter. EPS Q/Q ≥ 20% is required when the number is on file. Sales Q/Q ≥ 20% is a quality / A+ extra — not a veto — as long as EPS clears. A blank vendor print leaves the box unchecked and does not wipe the name. A+ wants both lines at 25%+ when both numbers exist.

The stop

Mark is consistent here. The initial stop sits just under the last contraction low. That is the danger point — the coil is broken if price loses it. He also has a hard ceiling: never more than 7–8% from the entry. Average losses in his published work sit around 5–6%. If the structural stop is wider than 8%, he passes on the trade rather than inventing a looser risk.

COIL draws that stop on the chart. Watch names measure risk from the pivot. Act now measures from the breakout close. The Lab compares this stop to a flat 8% hard stop so we can see if the rule is too tight or too loose.

How a human actually acts

  1. Only when the general market is Stage 2. That means the averages are stacked (50 above 150 above a rising 200) and price is holding them. A down week is noise. The stock rule “30% off the 52-week low” is not applied to SPY — an index at new highs often has not run 30% from its yearly low. If the 200-day structure breaks, he sits. If only the 50-day is lost, he gets cautious.
  2. Watch all week. Buy the print, not the idea. A coil is a watchlist item. The official order is a closed day through the pivot on ≥ 1.4× volume. A Cheat is optional — only if the 3–10 day pocket has already been taken out.
  3. Stop is already drawn — last coil low, ≤ 8%. Size so that one stop is about 1% of equity: shares = (equity × 1%) / (entry − stop). If the stop is wider than 8%, pass.
  4. After ~1R or 8–10% in your favour, raise the stop to breakeven. Then trail. We do not auto-trail; that is your job.
  5. Still read the weekly yourself. The machine will miss some of Mark’s discretionary A+ names and will also refuse pretty flags that are not VCPs. Empty is a valid day.

How we grade

Every listed name already passed the required boxes. Grade separates the best from the merely valid:

  • A+ — 3+ waves, final ≤ 6%, volume ≤ 0.60, quiet tape, 200-day rising four months, within 15% of the high, EPS & sales 25%+ when known, RS line within 8% of its 6-month high, RS 80+ after the universe rank.
  • A — full required template, constructive coil, dry contractions. Classic 3-wave names land here if they miss one A+ extra.
  • A− — still rule-complete. The floor. We no longer hide a valid coil behind a second score cut. B and C do not print.

RS rating is a 1–99 rank of six-month return versus the rest of the liquid names that passed the tape that week, applied after the full scan. Names that then fall under 70 are dropped. A+ names under 80 are demoted to A. The RS line (price vs SPY) is a separate quality read: leaders usually coil within 8% of that line’s 6-month high. We do not knock a valid VCP off the list just because the RS line is not at a new high — that only blocks A+.

Group stance is a note, not a box. After each pass we rank sectors by median six-month return and mark the top third leading, the bottom third lagging. Mark concentrates in leading groups; he does not throw out a valid coil just because the sector is average.

The boxes we tick

  • Price ≥ $15 — Mark’s published floor. He does not buy cheap/illiquid names.
  • Institutional liquidity — 50-day dollar volume ≥ $20M and share volume ≥ 400k. No penny tape.
  • Stage 2 trend template — All 8 Trend Template checks from Trade Like a Stock Market Wizard (daily 50/150/200).
  • 200-day rising (1 month) — The 200-day average must be trending up for at least one month.
  • 200-day rising (4 months) (A+ extra) — Preferred: 200-day rising for 4–5 months. Required for A+.
  • Within 25% of 52-week high — Official template: the closer to a new high, the better.
  • Within 15% of 52-week high (A+ extra) — How Mark actually concentrates: leaders sitting near highs. Required for A+.
  • At least 30% off 52-week low — Official template: at least 30% above the 52-week low. Best names are often 100%+.
  • VCP visible on the weekly — Mark finds the base on closed weekly bars. The forming week is displayed, not counted.
  • Prior leading advance — The base must pause a real Stage 2 move — at least 30% into the first peak.
  • 2–6 contractions — Classic VCP is 3–5 waves. Two-wave only if the last coil is extremely tight.
  • Each pullback tighter — Defining VCP rule: successive contractions get smaller. No mid-base expansion.
  • Opening pullback 10–35% — Under 10% is not a base. Over 35% is usually damaged / wide-and-loose.
  • Final coil ≤ 8% — Line of least resistance. A+ requires the last contraction ≤ 6%.
  • Higher lows — Each trough holds above the prior trough — constructive, not a breakdown.
  • Volume dry-up — Last-pullback volume on closed weeks ≤ 75% of the first. A+ wants ≤ 60%.
  • Volatility contracting (A+ extra) — 14-day ATR at or below the reading from 20 days ago. Quality read, not a veto. Required for A+.
  • Quiet tape into the pivot (A+ extra) — Closed-week volume and range stay compressed. A+ extra — the required tape rule is contraction dry-up.
  • Act now — close through pivot on volume (A+ extra) — The system buy: a closed daily bar through the pivot at ≥ 1.4× the 50-day volume.
  • Cheat — take out the 3–10 day high (A+ extra) — Optional early entry. Tight 3–10 day pocket under the pivot, then a close 10¢ through that high. Not the official buy.
  • Stop under last coil ≤ 8% (A+ extra) — Mark’s initial stop sits just under the last contraction low. If that is more than 8% from the entry, he passes.
  • Actionable (not extended / failed) — Mark does not chase >5% past the pivot or buy failed breakouts. Watch may sit up to ~12% under the buy point.
  • Outperforming the market — Must not be a clear 6-month laggard. Official RS 70 floor is applied after the universe rank.
  • RS rating ≥ 70 — Universe percentile of 6-month return. Official floor 70; A+ needs 80+.
  • RS line near 6-month highs (A+ extra) — Quality read, not a knockout. Leaders usually coil with the RS line within 8% of its 6-month high. Required for A+.
  • EPS Q/Q ≥ 20% — Latest quarter vs year-ago quarter when the number is on file. A blank vendor print is not a veto.
  • Sales Q/Q ≥ 20% (A+ extra) — Sales should confirm earnings. Quality / A+ extra, not a knockout, as long as EPS is 20%+.
  • EPS & sales ≥ 25% (A+ extra) — How he concentrates: both lines 25%+ in the current quarter. Required for A+ when both numbers exist.

COIL does not place orders, size positions, or know your risk. Treat every hit as a candidate for your own work.