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+--- Thread: Stage Analysis Beginners Questions (/Thread-Stage-Analysis-Beginners-Questions)
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RE: Beginners Questions - isatrader - 2013-09-20
(2013-09-20, 06:21 AM)JimStudent Wrote: First thanks for the site. I also appreciate your posts from the Trade2win site, especially the posts showing all the examples of stage analysis from the Global Trend Alert Newsletter.
Some of the things I am looking for might already be on one of the sites, maybe you could point me in the right direction. (I am real beginner, I'm just learning how to build charts.)
I would like to see how to build a chart from scratch like the ones you use from the Pro Real Time Software. How do I build a chart to make it identical to yours for the purpose of learning?
I would love to see a place on thread on the board that described all the technical indicators we are looking for from Stan Weinstein's method. Maybe a technical indicator would have a thread that told what it was, specifics on how to find that technical indicator, and what does that indicator tell us about the current market.
As I read chapter 8 on 'Using the best long-term indicator to spot bull and bear markets', Weinstein discusses the top 11 indicators of the 50 or 100 he follows. He describes the 30 wk ma, stage analysis, NYSE A/D line, A/D line American Stock Exchange, Momentum Index of the A/D line, Weekly new high / new lows, world markets, GM, Price Dividend Ratio, and contrary opinion. If each technical indicator had it's own thread (this is what it is, this is how you create it), then as we learned we could help keep the board up to date.
I would also love to see a thread on Sectors, I am in the U.S, but maybe we could have U.S and U.K. sectors (again the thread would be this is what the sectors are, and this is how you find and build their charts) As I learn how to create the charts and what to look for I would be glad to contribute to keeping them up to date.
Those areas would help us with the first two steps of Weinstein's system, checking the overall direction of the market and scanning the groups to know which ones to zero in on.
One other thread I would like to see is one place where all Stan Weinstein's resources are referenced. Examples would be all of the links to Global Trend Alerts that are posted - the March 2005 Global Trend alert and the interviews are examples that could be in the Weinstein Resources Thread.
Again thank you, and as I learn I hope I can contribute to the forum.
Hi Jim,
Thanks for posting for the first time and for all the ideas for the site. The site is a work in progress and I have a big to do list, so things will appear gradually over time. However, as you said chart setup etc has been covered a number of times but I don't have all of the links to hand, but I can certainly help you get your charts setup in the same way very easily.
Price
Create a weekly chart with a Bar chart setting, and add a 1 week moving average to it as well.
Then add a 10 week moving average and a 30 week moving average.
Finally set the Scale type to Logarithm Scale
Mansfield Relative Strength
The indicator is included in ProRealTime, so set the settings to Nbr periods to 52, and the multiplier to 100, and set it against the S&P 500 Index.
There is also a thread in the members section on How to create the Mansfield Relative Performance Indicator for people creating it in other software.
Relative Strength (Comparision)
Add the indicator and set the settings to compare against the set it against the S&P 500 Index and add a 52 week moving average.
Volume
Add the volume indicator and I've set mine with a 52 week moving average
Cumulative Force Index
There's a thread in the members board on the settings for this here: How to create the Cumulative Force Index indicator
I hope that helps and let me know if you have any more questions on the board or by private message if it's something you don't want to post for everyone to see.
Cheers
RE: Beginners Questions - JimStudent - 2013-09-22
Thank You.
RE: Beginners Questions - theory6453 - 2013-10-09
Isatrader and I were discussing yesterday about moving into a more defensive portfolio position now that the "Bear Confirmed" status on the moving average charts has been confirmed and a potential head and shoulders pattern is forming on the Dow charts. I'm curious to hear some feedback from the group on what going "defensive" in your portfolio means to you... Are you pulling money out of the market until we go back into a bull market or are you positioning your portfolio away from long positions and towards more shorts?
I think I am leaning towards the latter rather than pulling my funds out entirely but curious to know what others do.
Thanks,
RE: Beginners Questions - isatrader - 2013-10-09
(2013-10-09, 02:21 PM)theory6453 Wrote: Isatrader and I were discussing yesterday about moving into a more defensive portfolio position now that the "Bear Confirmed" status on the moving average charts has been confirmed and a potential head and shoulders pattern is forming on the Dow charts. I'm curious to hear some feedback from the group on what going "defensive" in your portfolio means to you... Are you pulling money out of the market until we go back into a bull market or are you positioning your portfolio away from long positions and towards more shorts?
I think I am leaning towards the latter rather than pulling my funds out entirely but curious to know what others do.
I think it depends entirely on what part of the method you are using, as if you are mostly a long only investor like me with a basic execution only account buying actual shares for the long term, then I've just got to sit through any pullbacks in my stocks and let the stop losses do their jobs, and trim any stocks that breakdown into Stage 4, as the transactions fees are high, and you shouldn't trade your investor positions. So I have to hold my nerve and follow the investor method.
So I see it as a time to start researching stocks that have had strong early Stage 2 runs, in the strongest sectors, that are now beginning to pull back for the first time on profit taking etc, but continue to show good relative performance and that have contracting volume for possible pullback entries if the Stage 2 run reasserts itself.
However, if you are a short term trader then you can increase non-correlated exposure, decrease volatility, put tighter stops on longs, use trendline stops, sell leaders & laggards on breakdowns, reduce exposure to offensive sectors, initiate shorts in weak sectors etc. Although personally I'd be inclined to take a gradual approach to anything, as we are not in Stage 4 currently, just a developing Stage 3 under the surface of the market, which generally means volatility in both directions imo. So it's important to have a plan, so you don't do anything on impulse.
RE: Beginners Questions - goodtyneguy - 2013-10-09
The same answer as isatader with regard to investor positions the only difference is I have three positions in commodities which I regard as a good diversification away from equity markets. Having said that, if we are to experience a similar crash to that of 2008 or worse then that will not apply. I fear that we are in the not too distant future going to be experiencing either a crack up boom or a severe crash worse than 2008. Both will be followed by a deflationary depression lasting many years, a la Japan. If this were the case then we would see investor positions dropping through their stage 1 bases. I cannot let that affect my investing in case I am wrong but I have compromised by not having taken full long investor positions as per the method and I can always add to them using a compromised trader method if I'm wrong.
With regard to shorting as an investor, I am very reluctant to sell short any stock unless we are in a confirmed bear market or there are other intermarket relationships at play e.g. interest rate markets rising affecting highly leveraged REITs and home builders to perhaps a lesser extent . I think doing otherwise lowers ones edge too much.
It was difficult watching my account drop by 4% on my trader plays yesterday observing the trader methods rules for the placing of stop loses. What I have to consider, is that I was up about 13% over a six week period and only one of my stops on seven positions has been hit. My account is down a little further today but I intend to stick with the stops as per the methods rules for these positions. Hopefully I will still be in the game until the huge rally comes after the inevitable debt ceiling raise is approved.
Owing to the crazy things that are going on with the fed and politics - as above and what we touched upon in the elite members area - going forward I envisage taking a bigger proportion off or perhaps my whole position off on stocks that advance quickly to lock in some quick profits. I particularly like the pocket pivot purchase method for entry founded by Morales & Kacher. It came about for finding low risk entry points in the type of back filling markets we have been seeing for a while now. So to summarise as far as trader plays are concerned it will be quick hit and run type trades on the long side I will be looking for until we emerge from "no mans land".
RE: Beginners Questions - theory6453 - 2013-11-03
This P&F chart for POT seems to be giving me conflicting info so I'm hoping I can get some help interpreting it. I am currently short in POT. The P&F pattern is "High Pole Warning". Stockcharts explains the High Pole Warning (HPW) saying:
The high pole warning is given when a chart rises above a previous high by at least 3 boxes but then reverses to give back at least 50 percent of the rise. The reversal implies that the demand that was making the prices rise has given way to supply pressure. The pattern is a warning that lower prices could be seen in the future.
(http://stockcharts.com/school/doku.php?id=chart_school:chart_analysis:pnf_alerts#high_pole)
My confusion is that the chart is also showing a a Bullish Price Objective of $41.51 so I'm struggling with why I am getting a Bearish chart pattern (HPW) with a Bullish price objective. I would think that the HPW would more likely confirm a Bearish price target. POT appears to be in a Stage 4 right now which is why I went short.
Thanks in advance...
RE: Beginners Questions - isatrader - 2013-11-03
(2013-11-03, 06:13 PM)theory6453 Wrote: This P&F chart for POT seems to be giving me conflicting info so I'm hoping I can get some help interpreting it. I am currently short in POT. The P&F pattern is "High Pole Warning". Stockcharts explains the High Pole Warning (HPW) saying:
The high pole warning is given when a chart rises above a previous high by at least 3 boxes but then reverses to give back at least 50 percent of the rise. The reversal implies that the demand that was making the prices rise has given way to supply pressure. The pattern is a warning that lower prices could be seen in the future.
(http://stockcharts.com/school/doku.php?id=chart_school:chart_analysis:pnf_alerts#high_pole)
My confusion is that the chart is also showing a a Bullish Price Objective of $41.51 so I'm struggling with why I am getting a Bearish chart pattern (HPW) with a Bullish price objective. I would think that the HPW would more likely confirm a Bearish price target. POT appears to be in a Stage 4 right now which is why I went short.
Thanks in advance...
The reason for the bullish price objective is that the last buy or sell signal it gave was a buy signal when it made a double top breakout on the previous column of Xs.
A High pole patterns is not a direct indicator to sell, it is instead a warning of a potential downward reversal, as the price has moved below 50% of the most recent up move as measured by the previous column of Xs. So in this case what you are seeing is a stock that's below it's Bearish Resistance Line (i.e. in a downtrend), that had given a short term buy signal within the overall downtrend, and is now warning that that short term buy signal could fail and hence could continue lower. But high pole patterns are generally more significant at tops, on parabolic moves up and sudden reversals below 50% of the previous column, and not minor moves like this one.
Also, if you move back to view the traditional P&F chart, there was no short term buy signal given and it's still showing as in a downtrend with heavy resistance above.
Basically it's in Stage 4 still, so place your stop loss where you are comfortable and let it play out imo.
RE: Beginners Questions - BoyPlunger - 2013-11-21
With the bull market obviously well under way are you guys mainly looking for stage 2 continuation plays or are you finding stage 1 plays too?