IBDMeetUp

IBD MeetUp
Santa Claus Rally or a

Lump of Coal?
December 13, 2022
Roy Mattox Wesley Mattox, CFA, CMT

Chief Market Strategist Chief Technical Strategist
Portfolio Manager Portfolio Manager
(704) 619-7445 (704) 877-1762
Roy.Mattox@IFSInvest.com Wesley.Mattox@IFSInvest.com
Follow @RoyLMattox Follow @WesleyJMattox
Investors Business Daily
Charlotte Meetup Group
What We’re About
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We aim to educate and connect investors in a vibrant and active community in Charlotte. We focus on the combination of technical and fundamental analysis
featured in the book, "How to Make Money in Stocks" by William O'Neil. With IBD's educational support, members hone their investor skills and work to master
the intricacies of the stock market. We cover CANSLIM concepts exclusively in the monthly meetings and utilize educational material designed both for novice
and experienced investors. Members are encouraged to participate and discuss the current State of the Market as well as provide input on Leading Stocks in
Leading Groups in the Market.
2
Disclaimers
The content in this presentation or in Discussions on the Meetup website should not be considered as a recommendation to buy or sell a security. All information is intended for educational
purposes only and in no way should be considered investment advice. Integrated Financial Strategies, LLC does not endorse, recommend, advise, or in any way construe the discussions in the
Charlotte IBD Meetup group as investment advice to be relied on. Roy Mattox provides information solely for educational purposes based on his experiences, opinions, and actual trading history
over the past 30 years. As such, he is not compensated by anyone for hosting the discussion. These discussions are for educational purposes between members of the Meetup Group. Mr.
Mattox is strictly acting as a host and facilitator to provide meaningful discussions about individual stocks. Members of the group who provide input on individual equities is done, likewise, to
provide opinions of an educational nature and are not to be relied on as investment advice. All investments, especially stocks are speculative in nature and involves substantial risk of loss. I
encourage investors to invest carefully. I also encourage investors to get personal advice from their professional investment advisor and to make independent investigations before acting on
information that we may discuss. Much of our information is derived directly from information published by Investors Business Daily and which I believe is reliable, but is without independent
verification. Therefore, I cannot assure you that the information is accurate or complete. I do not in any way warrant or guarantee the success of any action you take from my comments. Past
performance is not necessarily indicative of future results. All investments carry risk and all investment decisions of an individual remain the responsibility of that individual. There is no
guarantee that systems, indicators, or signals will result in profits or that they will not result in losses. All investors are advised to fully understand all risks associated with any kind of investing
they choose to do. Hypothetical or simulated performance is not indicative of future results. Unless specifically noted otherwise, all return examples provided in the literature and publications are
based on hypothetical or simulated investing. I make no representations or warranties that any investor will, or is likely to, achieve profits similar to those shown, because hypothetical or
simulated performance is not necessarily indicative of future results.
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Current Quarterly Earnings growth of at least 25% for the past 2 quarters. Also watch for quarterly sales and profit margins that are
C growing.
A Annual Earnings growth of at least 25% for each of the past 3-5 years. Also watch for return on equity (ROE) of at least 17%.
N New — Look for companies with new products, new services, new conditions in the industry, new management, or new price highs.
S Supply and Demand — Look for big volume increases on days of upside trading.
L Leader or Laggard — Look for the top stocks, both fundamentally and technically, in the very best performing sectors and industry groups.
I Institutional Sponsorship — Watch what pension funds, mutual funds, banks and other institutions are buying.
M Market Direction — Three out of four stocks follow the market, therefore make sure the market is in a confirmed uptrend.
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Process Overview
Technical Fundamental Macroeconomic

Analysis Analysis Analysis
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Technical Analysis
Price Breadth Sentiment Ratio Analysis
• MACD • % of Stocks > 50-day MA • NAAIM Exposure Index • Growth vs. Value (IVW:IVE)
• Price Phase • % of Stocks > 200-day MA • VIX • Small Cap vs. Large Cap
(IWM:SPY)
• RSI • Advance-Decline Line • CBOE Put-Call Ratio
• Stocks vs. Treasuries
• Stochastics • New Highs / New Lows • ICE BofA U.S. High-Yield (SPY:TLT and RSP:TLT)
Index Option Adjusted Spread
• SK-SD • Bullish Percentage • Treasuries vs. Junk Bonds
• CFTC Non-Commercial Net- (TLT:JNK)
• Point & Figure Long Positioning
• ROC • Implied & Realized Volatility
• Trend
⮚ Short: 10-day EMA > 21-

day EM
⮚ Intermediate – 21-day EMA

> 50-day MA
⮚ Long – Above 30-week MA
Technical Analysis Fundamental Analysis Macroeconomic Analysis
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Fundamental Analysis
Investors Business Daily Current Quarterly Earnings growth of at least 25% for the past 2 quarters. Also watch for quarterly
• CANSLIM
C sales and profit margins that are growing.
• MarketSmith Annual Earnings growth of at least 25% for each of the past 3-5 years. Also watch for return on equity
• Composite Rating
A (ROE) of at least 17%.
• EPS Rank New — Look for companies with new products, new services, new conditions in the industry, new
N management, or new price highs.
• RS Rank
• Sales, Margins, ROE

S Supply and Demand — Look for big volume increases on days of upside trading.
• Investors.com
Leader or Laggard — Look for the top stocks, both fundamentally and technically, in the very best
• 3rd Party Research L performing sectors and industry groups.
Institutional Sponsorship — Watch what pension funds, mutual funds, banks and other institutions are
I buying.
Market Direction — Three out of four stocks follow the market, therefore make sure the market is in a
M confirmed uptrend.
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Macroeconomic Analysis
Hedgeye Research – Growth, Inflation, Policy Model
Quad 1 Quad 2
Growth Accelerating as Inflation Decelerates Growth Accelerating as Inflation Accelerates
Monetary Policy Bias: Neutral Monetary Policy Bias: Hawkish
Market Narrative: Goldilocks Market Narrative: Reflation
Quad 4 Quad 3
Growth Slowing as Inflation Decelerates Growth Slowing as Inflation Accelerates
Monetary Policy Bias: Dovish Monetary Policy Bias: Neutral
Market Narrative: Deflation Market Narrative: Stagnation/Stagflation
Source: Hedgeye Research; https://app.hedgeye.com/ 8

Quad 1: Goldilocks Quad 2: Reflation Quad 3: Stagflation Quad 4: Deflation
Best Asset Classes: Best Asset Classes: Best Asset Classes: Best Asset Classes:
Equities, Credit, Commodities, FX Commodities, Equities, Credit, FX Gold, Commodities, Fixed Income Fixed Income, Gold, USD
Worst Asset Classes: Worst Asset Classes: Worst Asset Classes: Worst Asset Classes:
Fixed Income, USD Fixed Income, USD Credit Commodities, Equities, Credit, FX
Best Equity Sectors: Best Equity Sectors: Best Equity Sectors: Best Equity Sectors:
Tech, Consumer Discretionary, Materials, Tech, Consumer Discretionary, Utilities, Tech, Energy, Industrials, Consumer Staples, Utilities, REITs, Health
Industrials, Telecom Industrials, Energy, Financials Consumer Discretionary Care, Telecom
Worst Equity Sectors: Worst Equity Sectors: Worst Equity Sectors: Worst Equity Sectors:
Utilities, REITs, Consumer Staples, Telecom, Utilities, REITs, Consumer Financials, REITs, Materials, Telecom Energy, Tech, Industrials, Financials,
Financials, Energy Staples, Healthcare Materials
Consumer Staples
Best Equity Style Factors: Best Equity Style Factors: Best Equity Style Factors:
Best Equity Style Factors:
High Beta, Momentum, Leverage, Secular Secular Growth, High Beta, Momentum, Low Beta, Dividend Yield, Quality,
Growth, Mid Caps Secular Growth, Momentum, Mid Caps,
Cyclical Growth, Small Caps Defensives, Value
Low Beta, Quality
Worst Equity Style Factors: Worst Equity Style Factors: Worst Equity Style Factors:
Worst Equity Style Factors:
Low Beta, Defensives, Value, Dividend Low Beta, Value, Dividend Yield, High Beta, Momentum, Cyclicals, Secular
Yield, Small Caps Small Caps, Dividend Yield, Value,
Defensives, Size Growth, Leverage
Defensives, Size
Best Fixed Income Sectors: Best Fixed Income Sectors: Best Fixed Income Sectors:
Best Fixed Income Sectors:
BDCs, Convertibles, HY Credit, EM $ Convertibles, BDCs, Preferreds, Long Duration Treasuries, Medium
Debt, Leveraged Loans Munis, EM $ Debt, Long Duration
Leveraged Loans, HY Credit Duration Treasuries, IG Credit, Munis
Treasuries, TIPS, Treasury Belly
Worst Fixed Income Sectors: Worst Fixed Income Sectors: Worst Fixed Income Sectors:
Worst Fixed Income Sectors:
TIPS, Short Duration Treasuries, MBS, Long Bond, Treasury Belly, Munis, IG Preferreds, EM Local Currency, BDCs,
Treasury Belly, Long Bond BDCs, Preferreds, Convertibles,
Credit Leveraged Loans, TIPS
Leveraged Loans, HY Credit
Source: Hedgeye Research; https://app.hedgeye.com/ 9

Typical Bear Market Levels
Source: Ciovacco Capital Management 10

Past Earnings Recessions

Peak Month Trough Month Months of Contraction Quarters of EPS Decline EPS % Change
Aug-57 Apr-58 8 4 (17.0%)
Apr-60 Feb-61 10 7 (11.7%)
Dec-69 Nov-70 11 5 (12.9%)
Nov-73 Mar-75 16 4 (14.8%)
Jan-80 Jul-80 6 4 (4.6%)
Jul-81 Nov-82 16 4 (19.1%)
Jul-90 Mar-91 8 10 (36.7%)
Mar-01 Nov-01 8 5 (54.0%)
Dec-07 Jun-09 18 7 (91.9%)
Feb-20 Apr-20 2 4 (32.5%)
Average EPS Recession Lasts 10.3 Months

Average EPS Decline of 29.5%
Averages EPS Declines Excluding 2000/2008 of 18.7%
Source: Factset, NBER, D.A. Davidson 11

2008 VIX 2022 VIX
12
Volatility Needs to Come Down for Sustainable Uptrend
13
500
50
5,000
10
15
20
0
5
1967
1968
1969
1970
1971
1972
1973
1974
1975
1976
1977
1978
1979
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
S&P 500
1996
1997
Fed Funds Rate
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
S&P 500 and Fed “Pivots”
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
14
S&P 500 (1999-2002)
15
S&P 500 (2006-2009)
16
S&P 500 (Today)
17
0%
2%
8%
(4%)
(2%)
4%
6%
10%
12%
14%
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
CPI y/y % Change
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
Source: BLS
18
Inflation Forecasts
10.0%
9.0% Headline CPI YoY 8.6%

8.3%
Hedgeye Estimates - Nowcast Model 8.0%
8.0% 7.5%
Hedgeye Estimates - Comparative Base Effects Model
7.0% 6.7%
Bloomberg Consensus Estimates 6.5%
6.1%
6.0%
5.3%
4.9%
5.0% 4.6% 4.6%
4.3%
4.0% 3.7%
3.0%
2.0% 2.1%
1.9%
2.0%
1.2% 1.2%
1.0%
0.4%
0.0%
4Q19 1Q20 2Q20 3Q20 4Q20 1Q21 2Q21 3Q21 4Q21 1Q22 2Q22 3Q22 4Q22E 1Q23E 2Q23E 3Q23E
Source: Hedgeye Research 19

Markets Pricing in 50bp Rate Hike in December
80%
20%
Source: CME Group 20

Fed Funds Futures Next Year

5.50%
5.07% 5.07%
5.01% 5.02%
5.00% 4.95%
4.82% 4.81%
4.65%
Expected Fed Funds Rate
4.50% 4.44%
4.00%
3.50%
3.00%
December-22 February-23 March-23 May-23 June-23 July-23 September-23 November-23 December-23
Federal Reserve Policy Dates
Source: CME Group 21

3m and 10yr Treasury Yields
22
Yield Curve (10yr – 2yr)
23
Long-Term Yield Curve (10yr – 2yr)
24
Charlotte Meetup Group S&P 500
25
Charlotte Meetup Group QQQ
26
Charlotte Meetup Group FFTY
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Charlotte Meetup Group Nasdaq & MACD
28
Charlotte Meetup Group Nasdaq & RSI
29
Charlotte Meetup Group Nasdaq & MA Crossovers
30
Charlotte Meetup Group Nasdaq & 30-Week Moving Average
31
Charlotte Meetup Group S&P 500 and % Above 50-Day
32
Charlotte Meetup Group S&P 500 and % Above 200-Day
33
Charlotte Meetup Group Nasdaq and % Above 50-Day
34
Charlotte Meetup Group Nasdaq and % Above 200-Day
35
Charlotte Meetup Group S&P 500 & Advance/Decline Line
36
Charlotte Meetup Group Nasdaq & Advance/Decline Line
37
Charlotte Meetup Group Nasdaq & Net New Highs
38
Charlotte Meetup Group Nasdaq & Net New Highs (5 Years)
39
Charlotte Meetup Group Nasdaq & Net New Highs (20 Years)
40
Charlotte Meetup Group McClellan Oscillator & S&P 500
41
Charlotte Meetup Group VIX & S&P 500
42
Charlotte Meetup Group VIX & S&P 500 (5 Years)
43
Charlotte Meetup Group Nasdaq & Active Manager Exposure
44
Charlotte Meetup Group Nasdaq & Bulls vs. Bears
45
Charlotte Meetup Group Nasdaq & Net AAII Bull/Bear Sentiment
46
Charlotte Meetup Group 5-Day MA Put/Call Ratio
47
Charlotte Meetup Group 5-Day MA Equity Put/Call Ratio
48
Charlotte Meetup Group High Yield Spreads vs. S&P 500 (Daily)
49
Charlotte Meetup Group High Yield Spreads vs. S&P 500 (Weekly)
50
Charlotte Meetup Group All-World Index (ex-US)
51
Charlotte Meetup Group Bitcoin
52
Charlotte Meetup Group Ethereum
53
Charlotte Meetup Group Gold (Daily)
54
Charlotte Meetup Group U.S. Dollar (Weekly)
55
Charlotte Meetup Group WTI Crude
56
Charlotte Meetup Group TLT
57
Charlotte Meetup Group Barclays High Yield Bond ETF
58
Helpful Investor Resources
Buy How to Make Money in Stocks by William J. O’Neil

Investors.com
MarketSmith
For more information or a complimentary consultation, please feel free to contact us directly at (704) 643-5000 or email us at roy.mattox@ifsinvest.com or
wesley.mattox@ifsinvest.com
For more details on how we manage money on a discretionary basis for our clients at Integrated Financial Strategies click here.
Roy Mattox Wesley Mattox, CFA, CMT

Chief Market Strategist, Portfolio Manager Chief Technical Strategist, Portfolio Manager
Email: Roy.Mattox@IFSInvest.com Email: Wesley.Mattox@IFSInvest.com
Office: (704) 643-5000 Office: (704) 643-5000
Mobile: (704) 619-7445 Mobile: (704) 877-1762
Twitter: @RoyLMattox Twitter: @WesleyJMattox
59

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IBD MeetUp

Santa Claus Rally or a

Roy Mattox Wesley Mattox, CFA, CMT

What We’re About

Technical Fundamental Macroeconomic

⮚ Short: 10-day EMA > 21-

⮚ Intermediate – 21-day EMA

⮚ Long – Above 30-week MA

Technical Analysis Fundamental Analysis Macroeconomic Analysis

• Sales, Margins, ROE

Technical Analysis Fundamental Analysis Macroeconomic Analysis

Technical Analysis Fundamental Analysis Macroeconomic Analysis

Source: Hedgeye Research; https://app.hedgeye.com/ 8

Technical Analysis Fundamental Analysis Macroeconomic Analysis

Source: Hedgeye Research; https://app.hedgeye.com/ 9

Typical Bear Market Levels

Source: Ciovacco Capital Management 10

Past Earnings Recessions

Average EPS Recession Lasts 10.3 Months

Source: Factset, NBER, D.A. Davidson 11

2008 VIX 2022 VIX

Volatility Needs to Come Down for Sustainable Uptrend

S&P 500 (1999-2002)

S&P 500 (2006-2009)

S&P 500 (Today)

9.0% Headline CPI YoY 8.6%

Source: Hedgeye Research 19

Markets Pricing in 50bp Rate Hike in December

Source: CME Group 20

Fed Funds Futures Next Year

Federal Reserve Policy Dates

Source: CME Group 21

3m and 10yr Treasury Yields

Yield Curve (10yr – 2yr)

Long-Term Yield Curve (10yr – 2yr)

Buy How to Make Money in Stocks by William J. O’Neil

Roy Mattox Wesley Mattox, CFA, CMT

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