[isatrader]

No, I spent 2 years automating the Stages and determined that the combined neutral approach is the most accurate way of doing it. As Stage 1 and 3 are almost identical in terms of the technical attributes (it's the historical price action that helps differentiate them and external factors not on the chart, but when a stock chops around in a broad base for many months, and sometimes years, the historical differences disappear), and so other platforms that attempt to show them separately almost always get them wrong. And constantly have stocks in Stage 3 on every significant pullback in Stage 2, and also rarely in Stage 1. And when they base for long periods they get it completely wrong.

So determining Stage 1 and Stage 3 separately is a discretionary part of the method that still requires the human eye, as you need to assess the price, volume, relative strength and much more in the developing base structure, as well as its historical price action to help to determine if its distribution or a re-accumulation base, as well as numerous external factors such as the various market breadth indicators, group strength and the Stage and position of the overall market (i.e. the forest to the trees approach). This is an advanced skill that takes years to develop. So automating it would only be possible with much more advanced AI in my opinion. But nothing that's available currently could do it accurately. As there's too many variables, from multiple sources, to consider that only the humans can do currently.

The other issue is the implied bias that it adds. As if something says it's Stage 3, then the user makes the assumption that it is the top, and so will be looking for reasons to sell. But a lot of neutral periods are just pauses in a longer term advance, and so end up resolving to the upside. As the distribution is absorbed and turns back to re-accumulation, and then makes a continuation breakout to new highs. And vice versa in Stage 1.

So combining Stage 1 and 3 into a single Neutral Stage is significantly more useful and accurate for an automated approach. As it gives the user a chance to assess the base structure properly without the implied bias of calling it Stage 3.

It also simplifies things into just 3 major periods:
Uptrend = Stage 2
Downtrend = Stage 4
Neutral = Stage 1/3

I think this why other sites have failed to automate the Stages accurately, as there's still a discretionary element in determining Stage 1 and Stage 3, that current technology can't achieve yet. Maybe it will be able to in future. 10+ years ago on this forum, I always said that automating the Stages wasn't possible because of the discretionary element required. But automating Stage 2 and Stage 4 has always been possible. But automating Stage 1 and Stage 3 "accurately" still requires the human eye and judgement for the time being. So combining them was the compromise necessary to achieve the most accurate automated Stages available.

Hi David,

I have a request. Can you bring back the color yellow on your charts and for Tradingview to indicate a stock is in Stage 3 instead of having blue as neutral for stocks in either a Stage 1 or Stage 3? This would be much easier to read and see when a stock enters Stage 3.

Thanks