---
title: "A Tool Check to Prevent a Zag When the Market Zigs"
url: https://stacklist.com/card/cdc6304a-6c65-43f3-b7f1-868c5c12432d
source_url: "https://www.linkedin.com/pulse/tool-check-prevent-zag-when-market-zigs-david-m-aferiat/?trackingId=HFwq%2BAgkQ%2B2%2BoxBcyU6UUg%3D%3D"
stack: https://stacklist.com/c/education/stack/3701d09f-5d84-426c-aef0-e129d294445b
summary: "Tool to Prevent Zags When the Market Zigs compares Trade Ideas' SCoRe rating system with IBD's Smart Select Composite Rating, demonstrating how SCoRe's dynamic, multi-timeframe technical approach better captures market volatility compared to IBD's fundamental-focused model. SCoRe updates during live market hours and incorporates technical metrics across multiple timeframes, making it more responsive to short-term price fluctuations than IBD's weekly or daily updates."
tags: "stock-rating, technical-analysis, market-volatility, score-vs-cr, trading-tools"
key_entities: "Trade Ideas SCoRe (technology), IBD Smart Select Composite Rating (technology), Trade Ideas (organization), Investor Business Daily (organization), Andy Lindloff (person), technical-analysis (concept), fundamental-analysis (concept)"
classification: "analysis"
content_hash: "sha256:d651f34b65bbfcf3a8e4ede6548af5deb9bfd869ebcf0ad211641dba9184dc73"
acp_version: "0.2"
token_counts_approximate: 1189
visibility: public
agent_accessible: true
status: "final"
---

# A Tool Check to Prevent a Zag When the Market Zigs

A comparison between Trade Ideas' SCoRe and IBD's Smart Select Composite Rating reveal how each rating system handles the market's volatility and sharp turns. Welcome to a stock rating system that may look familiar at first glance, but is soup-to-nuts improved over the tool many with die-hard habits use. And it won't smudge your fingers. We took a look at Investor Business Daily (IBD)'s rating system, threw it away, and came up with something more useful. I make way below for my colleague and world-class educator and grizzled market veteran, Andy Lindloff, and his findings. The Trade Ideas’ SCoRe (Stock Composite Rating) is a proprietary formula that measures a stock's strength along technical, fundamental, and non-structured dimensions. We employ over 17 metrics to measure each SCoRe. A stock can have a SCoRe range of 30 to 100. Unlike the other rating systems which publish weekly or daily, the SCoRe is dynamic, and updates during live market hours. SCoRe incorporates multiple sources of data including fundamental metrics and non-structure data sets like social media, earnings, and more. Because of a strong emphasis on strength and weakness, measured over days and weeks in the formula, technical play a key role in determining the rating and lead to better decision-making. Specifically we use price relative to many long and short term moving averages, position in long and short term range filters, moving average crossovers, and more to measure a stock’s strength/weakness against potential volatile market conditions. IBD’s Smart Select CR (Composite Rating) is a proprietary rating system that is more fundamentally based scoring stocks from 1 to 99. CR uses the a collection of parameters which include: Earnings Per Share (EPS) with an emphasis on profit growth over the last two quarters, relative technical strength compared to other stocks over the last 12 months, sales growth, profit margins, and return on equity. Smart Select CR also incorporates accumulation/distribution metrics and relative strength compared to others in the same industry. Because of its emphasis on fundamental data and little to no exposure to technical metrics, IBD’s ratings are less likely to fluctuate for days and consider timely changes to market behavior. Trade Ideas’ SCoRe combines shorter time frames with longer ones to assure that any price fluctuation on any time frame can cause a change in the stock’s rating. Consequently, SCoRe’s intraday updates makes it an accurate forecaster of present and shorter time frames. This is very important, especially to traders/investors that may not yet have a good grasp of reading charts, understanding technical analysis, or inexperienced at handling market volatility . Here is a great example: On Nov 5, IBD had a Smart Select CR on the symbol HIIQ of 99 (the highest rating a stock can have). You can see on the chart below that on this date, HIIQ was on its second day of intense selling, but it maintained its high Smart Select CR. As you can see in the Trade Ideas’ Top-list (Scan) below, on Nov 1st, just 2 trading days before the selloff commenced in HIIQ, Trade Ideas had a SCoRe of 83. Just 2 days later, the SCoRe had dropped to 64 by the end of the trading day. And keep in mind, this almost 20 point drop reflected in the SCoRe the same day , adjusting lower throughout the trading session as the stock plummeted. In summary, IBD Smart Select CR is a good tool for finding value and opportunity based on previous performance found in the company’s recent earnings report, relative strength, and previous period metrics discussed above. This predominately fundamental model might have advantages when it comes to investing or trading in longer time frames but be subject to less accuracy as a result. Due to the lack of technical metrics on multiple time frames, this approach lacks the ability to timely inform of an internal break down of a stock’s technicals.  Conversely, Trade Ideas SCoRe strength lies in its real-time component and the implementation of many technical metrics (both short and long term time frames). It also includes important fundamental metrics such as EPS, revenue growth, cash to debt ratio, and even some social media stuff. The SCoRe is second to none when it comes to quickly evaluating a stock’s strength/weakness because of its sensitivity to all time frames. It can be useful on all time frames and is definitely superior when evaluating a stocks potential on shorter time frames (day trading, swing trading). If you’d like to try out the Trades Ideas’ SCoRe and its Artificially Intelligent virtual trading assistant HOLLY, you are invited to subscribe to a Premium subscription here .