C4 Mook Bouncer scan (free download)

The C4 Mook bouncer scan is a scan I run in my ThinkOrSwim side bar along with several other scans. If the scan “triggers” for any stocks trading in the US stock market, the ticker symbol will be automatically added to the “C4 Mook bouncer” watch list.  I have that watch list linked to one of the charts displaying in my ThinkOrSwim platform layout. I can then click on a stock in the watch list and it will show the chart for that stock in the chart window that it is linked to.

This scan filters out low float/low volume stocks. This keeps the amount of “triggered” stocks down, and also eliminates stocks that are very hard to get in and out of due to lack of liquidity.  What is scan is searching for are stock that are selling off (on a daily chart), and volume has increased in the last 3 hours (capitulation).  Once it has sold off and the sell orders start to “dry up,” buyers could step in and create a “bounce”.  These buyers may be Mutual /Hedge Funds, that want to increase their position, taking advantage of the discounted price to accumulate stock and increase their position. Or, long & short term short sellers who have reached their target price and are now buying to cover and take profit.

This scan is used to trigger stocks and create a watch list of “in-play” stocks.  Once a ticker is on the watch list you will need to look at the chart and determine why it’s moving, where the price is it relation to its 52 week highs/lows, and many other factors. This scan trigger is NOT a signal to buy or short the stock… If only it were that easy.  This watch list just gives you a sub-set of stocks to focus on, that are in-play for the day that they trigger.  You can have secondary triggers within that sub-set of stocks, that are a LONG or SHORT signal. Usually if I’m looking for a bounce to go LONG after this scan triggers, I will look at support and resistance. The first bounce usually is not a signal to buy. If it bounces, then retraces back to the previous line that it bounce off of,  then bounces again past the high of the first bounce (with volume), it may be a good sign of strength. That is my technical reason to go LONG.  But I also need a fundamental reason.  I need to know why the stock is selling off.  If I believe the reason for the sell off is justified and people are actually trying to get out of this stock, I will go SHORT on a bounce, after I see some weakness with volume.

After the scan triggers, I will look at a number of factors to determine if there is a trade to take where I believe I have an edge. If I don’t believe I have an edge I will not take the trade. Never take a trade out of boredom or just following someone else into a trade. These are the things I look at after the scan triggers to determine if (a) there is a trade there and (b) if its a LONG of a SHORT:

  1. News/Why the stock is moving? (look at: twitter, financial news website)
  2. Percentage of float short. This is important. It shows how many people don’t have faith in this company. Also, how many people need to cover (could create a squeeze). (look at: Yahoo finance, Google Finance, Finviz)
  3. P/E ratio. Is the company under or over valued? (look at: Yahoo finance, Google Finance, Finviz)
  4. Time of Day.  Most volume happen in the first and last hour. A move on higher volume has more strength. A lower volume move may be someone trying to manipulate the price to actually go the other way (get in of out). Also if it’s near the end of day or end of week people may not want to risk being long/short ver night or other the weekend.  Day-traders want to close their positions and be flat at the end of the day. (look at:hours left in trading day/ days left in week)
  5. Earnings. If the move is due to earnings. Is the move justified. If it an over/under reaction. Is the price being manipulated by longs/shorts. (look at: earning report, twitter, financial news website)


Or just copy and paste this link into your ThinkOrSwim application:

Go to setup>open shared item>paste link into box. Detailed instructions