The market handed you triple-digit gains in numerous gold stocks.
Heck, one stock ran from $25 to over $90. And I know a lot of traders are chasing it higher right now.
Bad idea.
Smart money is waiting for the pullback.
Sure enough, the Ghost Prints Console unveiled when and where they are ready to jump in.
Why the Magic Formula Works
There is a systematic way to find these magic formula stocks before they run. Joel Greenblatt proved it works when he wrote it up in his books. I'm using that method to build my 2026 watchlist.
The formula only tells you what to buy using just two metrics. Earnings Yield and Return on Capital. That's it.
Earnings Yield shows you valuation. But instead of the typical P/E ratio, the Magic Formula uses EBIT divided by Enterprise Value. This removes the effects of different capital structures and shows you the takeover value of the business.
Return on Capital shows you profitability. How effectively does management generate returns on invested capital? Every company needs capital. The question is whether they're generating returns above their weighted average cost of capital.
Rank companies by both metrics. Add the ranks together. Buy the top-ranked names. The formula finds quality businesses trading below fair value.
Don’t get it twisted, recognizing the moment when you're buying superior businesses at discount price requires patience.
AU is a great example to demonstrate.
The AU Setup: Perfect Fundamentals, Wrong Timing
AU (Anglogold Ashanti) ranks on my 2026 Magic Formula list. The fundamentals are solid. The valuation makes sense. The problem is the chart.
Look at the three-year weekly. The stock ran from $25 to $90. That move is unsustainable. When stocks extend this far this fast, they pull back. Always.
Apply Fibonacci retracements from the late 2024 low to the current high. Where does it get interesting? Around $65 minimum. That's where I start watching.
Could it go lower? Absolutely. $58 is reasonable. $48 isn't out of the question if we see real deleveraging in metals. The typical pullback is one-third to two-thirds of the move. That's your buying zone.
Today's Ghost Hour Showed Why Timing Matters
I closed BTG this morning for a 36% gain in Ghost Prints. We bought the $4.50 call, rolled it to $5. The stock stalled. Then I saw massive bearish prints hit GLD.
10,000 put spreads for this week. Another 10,000 for next week. Someone deployed serious capital betting on gold weakness. Silver followed with large put prints at the $61 strike.
That's the signal to take profits. Not to short gold or silver. Not to panic. Just to recognize when smart money is positioning for a pullback.
AU was down today. The stock everyone wanted to buy at $90 might be available at $65 soon. That's when the Magic Formula setup becomes tradeable.
The Discipline Gap
AU might be on the Magic Formula list. That doesn't mean I'm buying it at $90. I'm waiting. Watching for the technical setup to align with the fundamental story.
This is how you build a watchlist that makes money. Quality businesses. Reasonable valuations. Patient entries. Disciplined exits.
Most traders skip the waiting part. They see a stock on a list and buy it immediately. Then they watch it drop 30% while the fundamentals stay solid. The stock was right. The timing was wrong.
See it in Action
I just walked through the entire process in today's Ghost Prints session—from scanning the Magic Formula list to reading the institutional prints that signaled gold's pullback to closing BTG for 36% before the weakness hit.
The replay shows you exactly how to combine fundamental screening with options flow so you're buying quality at the right price, not chasing moves that are already over.
👉 Watch the Full Ghost Prints Replay Here
Brandon Chapman, CMT
Creator of Ghost Prints