The SCMV (Small Cap Momentum Value) Weekly system was started December 1, 2006 as an experimental stock screen on the Trade 4 Cash blog. The screen was executed weekly, and blog readers were updated on its progress. Eventually, the screen grew into a full trading system, and became an official system in the Trade 4 Cash lineup in May, 2007.

Since the system was started in December, 2006, it has been one of the most popular systems at Trade 4 Cash Pro.

System Description and Objectives

The SCMV Weekly system searches for small and micro cap stocks with a strong combination of fundamentals and price momentum. Stocks must satisfy each of the following criteria to be purchased by the system:

• Low Market Capitalization
• Low Price/Sales Ratio
• Low Debt/Equity Ratio
• High Revenue Growth Year over Year
• High 12 month Price Appreciation
• High 3 month Price Appreciation
• Sufficient Average Daily Volume
• Stock Price between $1 and $20
• Some, but not too much Institutional Ownership

Conversely, a stock that is currently held by the system will be sold if any of the above criteria is no longer satisfied. (Exception – a stock will not be sold simply for having its share price exceed $20.) Stocks are typically held for several weeks at a time, but can occasionally be sold after only 1 week in the portfolio.

The objectives of this system are a) achieving capital growth during bull market periods, and b) maintaining capital preservation by holding cash through bear markets. New stocks are purchased only during bull market periods. As the market turns bearish, current holdings are sold individually when they fail to meet the above screen criteria. Through extended bear markets, therefore, the system will eventually sell all holdings, and be 100% in cash. As the next bull market emerges, the system will immediately begin searching for new buy candidates.

This system is designed for a portfolio size of up to 10 stocks, but may hold fewer stocks at any given time if new buy candidates cannot be found by the system. There are no pre-determined profit targets for stocks purchased by the SCMV Weekly system.