Summary
Phil Anderson uses the volatile April 2025 market (S&P 500 dropped ~14% in the first five days, recovered to close the month nearly flat) as a teaching moment on identifying stocks in the strongest position, drawing directly on Gann’s Truth of the Stock Tape (p. 93) and Wall Street Stock Selector (p. 72). He compares two mining stock positions — EVN and GMD — to illustrate relative strength through retracement depth and consecutive down-day behaviour. The email also adds four new stocks to the AUS and US watchlists, with the US additions offering a broader macro read on consumer caution and cycle positioning.
Key Claims
- The S&P 500 fell nearly 14% in the first five trading days of April 2025, then recovered to close the month less than 1% from its opening level — confidence: high
- Stocks in the strongest position lead bull markets and reveal themselves clearly during volatile periods (citing Gann, Truth of the Stock Tape, p. 93) — confidence: high
- EVN retraced approximately 45% of its April 7 rally gains and rarely made more than two consecutive down days, indicating relative strength — confidence: high
- GMD retraced approximately 65% of its April 7 rally gains and printed three consecutive down days, indicating it is in a relatively weaker position than EVN — confidence: high
- Gann’s observation about consecutive down days (Wall Street Stock Selector, p. 72) is described by Anderson as one of Gann’s most important and personally profitable insights — confidence: high
- Strength in discount retail stocks (e.g., OLLI) may signal consumers are becoming more cautious with spending — confidence: medium
- Consumer caution in spending, read alongside the real estate cycle, may be another sign that the cycle is approaching its end — confidence: medium
Mex Pete References
- GMD (Genesis Minerals): Broke out from a Mexican Pete pattern featuring a series of higher lows forming a basing pattern; has continued making higher lows post-breakout, allowing stop to be raised multiple times.
- EVN (Evolution Mining): Broke out from a Mexican Pete pattern featuring a series of higher lows forming a basing pattern; has continued making higher lows post-breakout, allowing stop to be raised multiple times.
- DUR (Duratec): Described as displaying higher lows and a flat top “characteristic of our Mexican Pete pattern”; near prior all-time high resistance at $1.75.
- TLC (The Lottery Corp): Described as displaying higher lows and a flat top characteristic of the Mexican Pete pattern; near prior all-time high resistance at $5.30.
- SKWD (Skyward Specialty Insurance Group): Added to US watchlist for a breakout; no explicit Mex Pete label used, but breakout-over-resistance framing is consistent with the pattern.
- OLLI (Ollie’s Bargain Outlet): Described as a Mexican Pete setup taking shape; watching for a move over $120.
Stock Picks / Signals
| Ticker | Exchange | Signal | Trigger Price | Notes |
|---|---|---|---|---|
| EVN | ASX | Existing long — hold | — | Stop raised multiple times; retraced ~45% of April 7 rally; rarely more than 2 consecutive down days |
| GMD | ASX | Existing long — monitor | — | Stop raised multiple times; retraced ~65% of April 7 rally; printed 3 consecutive down days; relatively weaker than EVN |
| DUR | ASX | Watch — buy on breakout | Over $1.75 | Higher lows + flat top; near prior all-time high |
| TLC | ASX | Watch — buy on breakout | Over $5.30 | Higher lows + flat top; near prior all-time high |
| SKWD | US | Watch — buy on breakout | Over $56.00 | Added to US watchlist |
| OLLI | US | Watch — buy on breakout | Over $120.00 | Discount retail; Mexican Pete setup forming |
Predictions / Forecasts
- If multiple discount retail stocks (like OLLI) continue to show strength, this may signal increasing consumer caution — framed as a macro indicator to watch, not a hard price forecast — confidence: medium
- Anderson suggests the real estate cycle is likely “towards the end,” using consumer behaviour signals as corroborating evidence — confidence: medium (directional, no specific date given)
- Implicit forward guidance: EVN is expected to be in a stronger position than GMD going forward, based on retracement depth and consecutive down-day analysis — confidence: medium
Notable Quotes
“If you can get the hang of this, then for longer term trading – and doing so whilst you’re still in your day job – this is the least stressful way of trading I have ever found. It just requires discipline to first, never guess, second wait for the set up to complete, and then third, always take your stop loss if the trade fails.”
“I always read that in conjunction with where I think we are in the real estate cycle. And this could be yet another sign of added significance of our place in the cycle – towards the end.”