The QualityDip Ledger

Rules v1 · effective Nov 1, 2026 · fixed in advance

1. Universe: the companies on the QualityDip watchlist: AVGO, AMZN, MSFT, KLAC, AMAT, ANET, COST, V and BE (BE: founder holds shares).
2. Trigger: the daily close is at least 5% below its Market Value, and Market Value has had at least 5 trading days to form since the last thesis-changing filing. Also tagged if the close is below the DCF value or the FCF value.
3. Entry price is that day’s close. The benchmark entry is SPY’s close the same day.
4. Cooldown: at most one alert per company per 30 calendar days, unless a new thesis-changing filing resets its Market Value.
5. No exits are called. Returns are tracked since the alert, plus fixed marks at 30, 90 and 180 days.
6. Changes: a rule change creates a new version. Old alerts keep their version. Nothing is deleted. A correction is a new row that points to the old one.

Reversal Signal Rules v1 (published as “Bottom Rules v1”) · effective Nov 1, 2026 · fixed in advance

1. Universe: every US-listed stock worth $20B or more that passes four quality checks: it generates cash (positive free cash flow, or operating cash flow of at least 20% of sales), earns a good return (ROE of 12%+ or ROIC of 10%+), sales are not shrinking year over year, and debt is manageable (net debt under 3× EBITDA; banks and insurers exempt). 333 companies today; we also track 667 more for reference (the next-largest US-listed companies, popular names and reader requests), which never trigger alerts.
2. It must already be a dip. Dip watch: 15%+ below its 52-week high and under its 50-day average, or 7%+ below its Market Value. Deep dip: 25%+ below its 52-week high and under its 200-day average, or 20%+ off the high and 12%+ below Market Value.
3. R1 Capitulation reversal: a capitulation day (volume at least 2× normal, down 2.5%+, a new 20-day low) in the last 10 sessions, no lower low since, and price trades above that day’s high. Alerted intraday the moment it happens. Entry is the alert price. Stop: below the capitulation day’s low.
4. R2 Reversal candle at value: a bullish engulfing or morning-star candle at a 20-day low, while the stock is in a Deep dip or 5%+ below its Market Value. Judged on the final daily close. Entry is that close. Stop: below the pattern’s low.
5. R3 Oversold momentum turn at value: the MACD (12, 26, 9) crosses up while it is deeply negative (below −2% of price), with the stock in a Deep dip or 5%+ below its Market Value. Judged on the final daily close. Entry is that close. Stop: below the 10-day low.
6. One alert per company per rule per 20 trading days. Returns are tracked against SPY from the alert like every other Ledger row. A stop level is information, not an order; no exits are called.
7. Backtest, 2017–2026, these ~330 companies: the three rules caught the actual low (no lower low in the next 10 trading days) 53–73% of the time, against about 42% for simply buying the first day of a Deep dip. On 60-day returns against SPY they did not clearly beat that simple baseline (+3.7% to +4.5% vs +3.6% on average), and the test is flattered by survivorship: these are today’s strong companies. The rules are about timing and a defined stop, not a promise of profit.