Tips for QuoteTracker (QT):
by Benmao
since QT is our default real-time charting software for real-time trading, i would like to share some tips below:
1) save currenrt QT setting;
When you receive a new QT layout file (*.slt),
try to save your current layout setting first
by go to "File" -> "Save Layout .." -> "Save as" then choose a filename.
2) load new QT setting:
then you can load the SLT file you receive, by going to "File" -> "Load layout ..." -> "choose layout", then pick the new layout file.
3) watch different ticker:
if you want to watch different stock ticker, such as from ES to spy, mouse click the chart first, then from keyboard enter "spy", it will give you a small menu to accept the change, just click save it will change the chart to spy.
4) bring up a new chart along with new setting:
if you want to bring up a new chart with different chart setting, mouse click a 5-min chart first, then right click your mouse, choose "save chart template" -> "create new template -> pick a template name, such as "my 5-min chart";
then mouse click the same 5-min chart, right click the mouse, then choose "new chart" -> "my 5-min chart", then it will bring up a new chart for your stock. then you can use that chart to add/remove indicator, or change the stock ticker, then save the chart template as different name, such as "my second 5-min chart".
5) if you like you current layout, then go to QT -> "File" -> "Save layout" -> "Save as..", then pick a file name, such as my-qt-setting-20090626.slt. then save it.
next time when QT is ran, by default it will bring up the last layout before exit.
Sunday, June 28, 2009
Tuesday, June 16, 2009
The Steps and early signals on Commodity Lead pull-back or crash
The Steps and early signals on Commodity Lead pull-back or crash, here is what we should learn from today's decisive pull back (20 points) June 15,2009
(1) Today's commodity move was signaled 3 days back (last Thursday) when gold dropped hard and broke trendline. This is early signal that commodities were in trouble. If we realize that, we should have shorted/put all commodities! From OIH, to POT, From GDX to FCX, OIL/Metal/Ag/Steel/Coal, etc, etc. If not Thursday, then Friday was the last chance to load commodity shorts/puts. I now believe last Friday was big Boys unload day, while they held OIL price steady.
(2) The second signal was TLT was not doing down after 30 yr bond auction. This means USD is hit the bottom (this one I did catch it and repeated saying I believe USD is going to bounce after bond auction) .
(3) The third, I also got this one: the low volume! it is now getting clear and clear that Fed Ben is pulling $ out of mkt that causing the liquidation drain. That means he will not pump stocks till get yields ($TNX) back to low 3's (now 37.13)
Monday, June 8, 2009
SRS 15 min EOD system (16/34 EMA)
Trading Rules:
Long
Entry: When the fast 16 EMA crosses above the slow 34EMA
Exit: When the fast 16EMA crosses below the slow 34EMA OR exited the last minute of the day (EOD)
Short
Entry: When the fast 16EMA crosses below the slow 34EMA
Exit: When the fast 16 EMA crosses above the slow 34EMA, go Long OR exited the last minute of the day (EOD)
$5,000 account starts 5/1/2009
Wednesday, May 20, 2009
How To Trade Breakouts
Wahaa said...
7 COMMON BREAKOUT PATTERNS.
Check your favorites stocks whether they have the following patterns:
http://ibankcoin.com/chart_addict/?p=818
-------------------------------------------------------------
http://breakpointtrades.com/watch_rules.htm
Some basic rules:
1. Volume is crucial. When looking at a chart for a good entry, the key to successful trading is an increase in volume. Chart breaks without volume have a much lower probability of success.
2. Only trade breakouts with an excellent volume % relative to their 60-day volume average. Some programs like Medved Quote Tracker will provide this information for you. The 60-day moving average can also be found on Yahoo Finance under detailed quotes. Trading breakouts with big volume % will greatly enhance your probability of a successful trade. This is especially true when day trading or swing trading. (Please note: Increased volume is not as important when shorting a stock.)
Here is a simple formula you can use to determine the volume % at any point during a trading day:
[Total volume / hours into the trading day] multiplied by 6.5 (trading hours in a day)
Here's an Example:
Stock ABC has a breakpoint of $10.25 with a 60-day average volume of 500,000 shares. At 11:30AM, stock ABC breaks the $10.25 price resistance (breakpoint) with a volume of 100,000 shares.
Does this breakout possess a high probability of success? The answer is NO. Even though ABC has broken out above the 10.25 resistance level, using the formula above, the adjusted volume of 325,000 shares does not meet or exceed the 60-day average volume.
100,000 / 2 = 50,000
50,000 x (6.5) = 325,000
3. It is a good idea to avoid entering new positions in the first 15 minutes after the market open.
4. Avoid holding a position into earnings as this can result in a major loss. A Positive earnings surprise can result in a significant gain, but the potential reward usually does not merit the risk.
5. Do not overweight your trading resources in one position.
6. Do not enter a position early. Wait for a pattern to setup, make sure it has above average volume, then only enter only after the price has traded through the breakout price.
7. It's a good habit to sell 1/2 your trading position on an initial move above resistance and reset stops at entry to ensure a profitable trade. Use mental stops to avoid large losses.rket open.
8. Avoid averaging down if a position goes against you. Maintain proper mental stops. If the stock moves back up, you can always reenter.
9. Keep your emotions even. Do not become exuberant when trades go well and do not become depressed when trades do not work. Maintaining an even temperament in the short term will enable you to trade for the long term.
7 COMMON BREAKOUT PATTERNS.
Check your favorites stocks whether they have the following patterns:
http://ibankcoin.com/chart_addict/?p=818
-------------------------------------------------------------
http://breakpointtrades.com/watch_rules.htm
Some basic rules:
1. Volume is crucial. When looking at a chart for a good entry, the key to successful trading is an increase in volume. Chart breaks without volume have a much lower probability of success.
2. Only trade breakouts with an excellent volume % relative to their 60-day volume average. Some programs like Medved Quote Tracker will provide this information for you. The 60-day moving average can also be found on Yahoo Finance under detailed quotes. Trading breakouts with big volume % will greatly enhance your probability of a successful trade. This is especially true when day trading or swing trading. (Please note: Increased volume is not as important when shorting a stock.)
Here is a simple formula you can use to determine the volume % at any point during a trading day:
[Total volume / hours into the trading day] multiplied by 6.5 (trading hours in a day)
Here's an Example:
Stock ABC has a breakpoint of $10.25 with a 60-day average volume of 500,000 shares. At 11:30AM, stock ABC breaks the $10.25 price resistance (breakpoint) with a volume of 100,000 shares.
Does this breakout possess a high probability of success? The answer is NO. Even though ABC has broken out above the 10.25 resistance level, using the formula above, the adjusted volume of 325,000 shares does not meet or exceed the 60-day average volume.
100,000 / 2 = 50,000
50,000 x (6.5) = 325,000
3. It is a good idea to avoid entering new positions in the first 15 minutes after the market open.
4. Avoid holding a position into earnings as this can result in a major loss. A Positive earnings surprise can result in a significant gain, but the potential reward usually does not merit the risk.
5. Do not overweight your trading resources in one position.
6. Do not enter a position early. Wait for a pattern to setup, make sure it has above average volume, then only enter only after the price has traded through the breakout price.
7. It's a good habit to sell 1/2 your trading position on an initial move above resistance and reset stops at entry to ensure a profitable trade. Use mental stops to avoid large losses.rket open.
8. Avoid averaging down if a position goes against you. Maintain proper mental stops. If the stock moves back up, you can always reenter.
9. Keep your emotions even. Do not become exuberant when trades go well and do not become depressed when trades do not work. Maintaining an even temperament in the short term will enable you to trade for the long term.
NYMO
McClellan Oscillator
Developed by Sherman and Marian McClellan, the McClellan Oscillator is a breadth indicator derived from each day's net advances, the number of advancing issues less the number of declining issues. Subtracting the 39-day exponential moving average from the 19-day exponential moving average of net advances forms the oscillator.
Similar to MACD, the McClellan Oscillator is a momentum indicator that is applied to the advance/decline statistics. When the 19-day EMA (shorter moving average) moves above the 39-day (longer moving average) EMA, it signals that advances are gaining the upper hand. Conversely, when the 19-day EMA declines below the 39-day EMA, it signals that declining issues are dominant. As a momentum indicator, the McClellan Oscillator attempts to anticipate positive and negative changes in the AD statistics for market timing.
Buy and sell signals are generated as well as overbought and oversold readings. Usually, readings above +100 are considered overbought and below -100 oversold. Overbought and oversold readings may vary among indices and historical precedent. Buy signals are generated when the oscillator advances from oversold levels to positive territory. Sell signals are generated on declines from overbought to negative territory. Traders may also look for positive or negative divergences to time their trades. A series of rising troughs would denote strength, while a series of declining peaks weakness.
Calculation
When calculating the McClellan Oscillator, the ratio adjusted index is often used for easier comparisons over long periods of time. The basic input for the ratio-adjusted version is no longer the daily advances minus declines. Rather, you
- Subtract declines from advances
- Divide the result by the total of advances plus declines, and
- Multiply that result by 1000. (Multiplying by 1000 is simply cosmetic and lets us work with whole numbers instead of decimals.)
The rest of the calculations for the Oscillator are the same.
Example
The above chart shows the breakdown of the McClellan Oscillator. The top window shows the 19-day EMA and the 39-day EMA of the NYSE advance-decline issues, and the lower window shows the ratio adjusted McClellan Oscillator line. Notice that the 19-day and 39-day EMA crossovers correspond with zero-line crossovers on the McClellan Oscillator.
StockCharts.com provides one-year charts of the McClellan Oscillator for the NYSE and NASDAQ markets.
MAD and MDD
BenMao said...
Any classmates here have info for how to the following patterns:
1) MAD;
2) MDD;
3) post MAD;
4) post MDD;
$SPX-Daily: To make it clear: MAD = $NYUPV:$NYDNV > 10; MDD = $NYDNV:$NYUPV > 10. All MADs and MDDs since SPX=666.79 have been identified on this $SPX Daily chart. Typically on the day after MAD or MDD a small body bar will form, meaning that the close price will be close to the opening price.
On this daily chart a decreasing volume pattern has been identified. Three similar occurrences are also marked, with the first (Feb, 2008) being a double top, the second and the third (May, 2008 and Aug, 2008) being rolling-over mid-term tops. Keeping in mind that near the top of 930.17 we have observed distribution occurring. If the 900 mark is going to be taken out together with selling-volume picking up, we have more reason to believe that the mid-term top is passed. However, another attempt can be made to retest 930 if the 900 level is hold.
Any classmates here have info for how to the following patterns:
1) MAD;
2) MDD;
3) post MAD;
4) post MDD;
$SPX-Daily: To make it clear: MAD = $NYUPV:$NYDNV > 10; MDD = $NYDNV:$NYUPV > 10. All MADs and MDDs since SPX=666.79 have been identified on this $SPX Daily chart. Typically on the day after MAD or MDD a small body bar will form, meaning that the close price will be close to the opening price.
On this daily chart a decreasing volume pattern has been identified. Three similar occurrences are also marked, with the first (Feb, 2008) being a double top, the second and the third (May, 2008 and Aug, 2008) being rolling-over mid-term tops. Keeping in mind that near the top of 930.17 we have observed distribution occurring. If the 900 mark is going to be taken out together with selling-volume picking up, we have more reason to believe that the mid-term top is passed. However, another attempt can be made to retest 930 if the 900 level is hold.
Small Cap & Large Cap Relationship
Overview:
During major market rallies, small caps usually lead the large caps.
As an example, if you see that the Market is rallying, but the Small Caps are lagging behind or falling, then the Market rally will likely end as well unless the Small Caps recover. Likewise, if the Market is falling, but the Small Caps begin to rally, this may be an idication that the Market Market correction may soon be over.
When the Ratio is trending up, small caps are leading and indicates the jmarket can support a rally.
Semiconductors and Nasdaq Relationship
Overview:
The Nasdaq and the Semiconductor Index are closely linked with one another, similar to the DOW and Transports. In other words, a major market trend cannot happen without one confirming the other. If you see a divergence take place between the Nasdaq and the Semiconductors, then something has to give, in other words, these two sectors can only diverge for so long.
As an example, if the Nasdaq is rallying, but the Semiconductors are falling behind or breaking down, then the Semiconductors need to rally soon, otherwise the Nasdaq will soon breakdown as well and the rally will end. Likewise, if the Nasdaq is falling, but the Semiconductors begin to rally, this may be an indication that the Nasdaq will soon recover and rally as well.
When using this indicator, look for divergences between the Nasdaq and the Semiconductors as an early indication that a major trend change is about to take place
When the Ratio is trending up, then the market can support a rally.
DOW Theory
DOW Theory - DOW Jones and Transports Relationship:
DOW Theory states that the DOW Jones Industrials is closely linked with the Transportation Sector. In other words, a major market trend cannot happen without one confirming the other. If you see a divergence take place between the DOW Jones and the Transports, then something has to give, in other words, these two sectors can only diverge for so long.
As an example, if the DOW is rallying, but the Transports are falling behind or breaking down, then the Transports need to rally soon, otherwise the DOW will soon breakdown and the rally will end. Likewise, if the DOW Jones is falling, but the Transports begin to rally, this may be an indication that the DOW Jones will soon recover and rally as well.
When using this indicator, look for divergences between the DOW Jones and the Transports as an early indication that a major trend change is about to take place
Transports / DOW Ratio
The direction is what is important: When the direction is up, the Transports are outperforming the DOW, which is healthy
Here's a real word example of how to use the DOW Transports as an indicator with respect to the DOW:
In the chart below, the Transports began to breakdown in late January 2003 and underperform the DOW. This was a big red flag that the DOW would soon follow.
Following the sharp breakdown in the Transports, the bounce ocurred followed by another downtrend which began in mid February. This second breakdown finally caused a subseqent breakdown in the DOW.
Following the weakness in the Transports, the DOW finally broke down in early March.
http://breakpointtrades.com/indicator_DOW.htm
DOW Theory states that the DOW Jones Industrials is closely linked with the Transportation Sector. In other words, a major market trend cannot happen without one confirming the other. If you see a divergence take place between the DOW Jones and the Transports, then something has to give, in other words, these two sectors can only diverge for so long.
As an example, if the DOW is rallying, but the Transports are falling behind or breaking down, then the Transports need to rally soon, otherwise the DOW will soon breakdown and the rally will end. Likewise, if the DOW Jones is falling, but the Transports begin to rally, this may be an indication that the DOW Jones will soon recover and rally as well.
When using this indicator, look for divergences between the DOW Jones and the Transports as an early indication that a major trend change is about to take place
Transports / DOW Ratio
The direction is what is important: When the direction is up, the Transports are outperforming the DOW, which is healthy
Here's a real word example of how to use the DOW Transports as an indicator with respect to the DOW:
In the chart below, the Transports began to breakdown in late January 2003 and underperform the DOW. This was a big red flag that the DOW would soon follow.
Following the sharp breakdown in the Transports, the bounce ocurred followed by another downtrend which began in mid February. This second breakdown finally caused a subseqent breakdown in the DOW.
Following the weakness in the Transports, the DOW finally broke down in early March.
http://breakpointtrades.com/indicator_DOW.htm
Percent of stocks above 50MA and 200MA
Overview:
The percentage of stocks above and below the 50 MA and 200 MA can indicate the overall health of the Market.
However, a very useful way to use these charts is to determin the direction becaue these charts are directly correlated to their respective index.
For example, if you see positive divergence developing in the MACD in the chart of the % of stocks above the 200 MA, then you know there is a strong possibility that the index will soon experience a rally.
Normal technical analysis can be used on these following charts to predict market movement.
http://breakpointtrades.com/indicator_percent.htm
The percentage of stocks above and below the 50 MA and 200 MA can indicate the overall health of the Market.
However, a very useful way to use these charts is to determin the direction becaue these charts are directly correlated to their respective index.
For example, if you see positive divergence developing in the MACD in the chart of the % of stocks above the 200 MA, then you know there is a strong possibility that the index will soon experience a rally.
Normal technical analysis can be used on these following charts to predict market movement.
http://breakpointtrades.com/indicator_percent.htm
VIX and VXN Indicators
VIX (S&P) and VXN (Nasdaq) Indicator - measures market psychology
Overview:
The VIX or Volatility index is ratio of put options to call options. It is a useful indicator because it indirectly measures market psychology. The VIX is like a contrarian indicator, when it's low, it means that more people are buying call options, and thus are bullish on the market. Contrarian theory tells us that the majority of people are wrong about the stock market, therefore when the masses are overly bullish, the market is usually topped out and about to tank, and vice versa.
It is the direction, not the level, that is the most important. The VIX is inversely correlated with the Market. For example, by using technical analysis, if you decide the VIX is going to fall in the short term, the market will usually rise, and vice versa. Normal pattern or technical analysis can be preformed on the VIX an attempt to decipher market direction.
Also, levels over 40 are considered oversold, and levels below 20 are considered overbought. The old saying applies, when the VIX is low it's time to go, when the VIX is high, it's time to buy. However, the VIX can remain in extreme levels for a long time. Therefore, it is best to deciper the direction of the VIX rather than the level.
http://breakpointtrades.com/indicator_VIX.htm
Overview:
The VIX or Volatility index is ratio of put options to call options. It is a useful indicator because it indirectly measures market psychology. The VIX is like a contrarian indicator, when it's low, it means that more people are buying call options, and thus are bullish on the market. Contrarian theory tells us that the majority of people are wrong about the stock market, therefore when the masses are overly bullish, the market is usually topped out and about to tank, and vice versa.
It is the direction, not the level, that is the most important. The VIX is inversely correlated with the Market. For example, by using technical analysis, if you decide the VIX is going to fall in the short term, the market will usually rise, and vice versa. Normal pattern or technical analysis can be preformed on the VIX an attempt to decipher market direction.
Also, levels over 40 are considered oversold, and levels below 20 are considered overbought. The old saying applies, when the VIX is low it's time to go, when the VIX is high, it's time to buy. However, the VIX can remain in extreme levels for a long time. Therefore, it is best to deciper the direction of the VIX rather than the level.
http://breakpointtrades.com/indicator_VIX.htm
Bullish Percent Index (BPI), BPCOMPQ, BPSPX, BPNYA
Overview:
The Bullish Percent Index (BPI) is a popular market breadth indicator that is calculated by dividing the number of stocks in a given group (an exchange, an industry, etc.) that are currently trading with Point and Figure buy signals, by the total number of stocks in that group. Bullish Percent levels that are above 50 and especially 70% are considered overbought, whereas levels below 30% are considered oversold. Strong buy signals occur when the Bullish Percent Index falls below 30% and then reverses up by at least 6%. Conversely, promising sell signals occur when it goes above 70%, and then reverses down by at least 6%.
However, the direction of the BPIs are the most important:: The direction of the BPI is directly proportional to the market direction, i.e. when the direction of the BPI is up, so is the market, and vice versa. Therefore, use trend reversals to indicate subsequent reversals in market trends. Useful ways to accomplish are to use moving average crossovers, Parabolic Sar, postiive divergence in the MACD, and level of Stochastics.
NASDAQ - BPCOMPQ
Short Term Uses Parabolic SAR to identify changes in direction.
Also look for positive or negative divergence in the MACD as well as important Stochastics levels of 20 and 80
Long Term Daily Uses 20 EMA to identify changes in direction.
Also look for positive or negative divergence in the MACD as well as important Stochastics levels of 20 and 80
Long Term Weekly Weekly chart: Uses Parabolic SAR to identify changes in direction
S&P 50 - BPSPX
Short Term Uses Parabolic SAR to identify changes in direction. Also look for positive or negative divergence in the MACD as well as important Stochastics levels of 20 and 80
Long Term Daily Uses 20 day EMA to identify changes in direction. Also look for positive or negative divergence in the MACD as well as important Stochastics levels of 20 and 80
Long Term Weekly Weekly chart: Uses Parabolic SAR to identify changes in direction
http://breakpointtrades.com/indicator_bullish.htm
The Bullish Percent Index (BPI) is a popular market breadth indicator that is calculated by dividing the number of stocks in a given group (an exchange, an industry, etc.) that are currently trading with Point and Figure buy signals, by the total number of stocks in that group. Bullish Percent levels that are above 50 and especially 70% are considered overbought, whereas levels below 30% are considered oversold. Strong buy signals occur when the Bullish Percent Index falls below 30% and then reverses up by at least 6%. Conversely, promising sell signals occur when it goes above 70%, and then reverses down by at least 6%.
However, the direction of the BPIs are the most important:: The direction of the BPI is directly proportional to the market direction, i.e. when the direction of the BPI is up, so is the market, and vice versa. Therefore, use trend reversals to indicate subsequent reversals in market trends. Useful ways to accomplish are to use moving average crossovers, Parabolic Sar, postiive divergence in the MACD, and level of Stochastics.
NASDAQ - BPCOMPQ
Short Term Uses Parabolic SAR to identify changes in direction.
Also look for positive or negative divergence in the MACD as well as important Stochastics levels of 20 and 80
Long Term Daily Uses 20 EMA to identify changes in direction.
Also look for positive or negative divergence in the MACD as well as important Stochastics levels of 20 and 80
Long Term Weekly Weekly chart: Uses Parabolic SAR to identify changes in direction
S&P 50 - BPSPX
Short Term Uses Parabolic SAR to identify changes in direction. Also look for positive or negative divergence in the MACD as well as important Stochastics levels of 20 and 80
Long Term Daily Uses 20 day EMA to identify changes in direction. Also look for positive or negative divergence in the MACD as well as important Stochastics levels of 20 and 80
Long Term Weekly Weekly chart: Uses Parabolic SAR to identify changes in direction
http://breakpointtrades.com/indicator_bullish.htm
NASI (Nasdaq) and NYSI (NYSE)
Definition:
The NASDAQ McClellan Summation Index ($NASI) and the NYSE McClellan Summartion Index ($NYSI) look at the gap between the number of advancers and decliners on the Nasdaq and NYSE to give a net positive or negative number that indicates how overbought or oversold the market on a given day.
Using the NASI and NYSE:
The NASI is very good at predicting the intermediate Nasdaq trend of about 1 - 3 months as is the NYSI for the NYSE. Buy and sell signals are triggered when the the NASI and NYSI change direction.
The NASI is very useful as a general market indicator and could be used to swing trade QQQ, NQ futures, or an agressive growth mutual fund.
The NYSI is very useful as a general market indicator for the NYSE.
Use the following as buy/sell triggers to determine a change in the NASI and NYSI trends:
1. 5 MA crossover or Parabolic SAR buy/sell signal:
2. MACD crossover:
3. Stochastics crossover of 20 for a buy signal or below 80 for a sell signal
CHART OF THE NASI:
NASI Uses the 5 MA as a buy signal, but can whipsaw quite a bit.
NASI Uses Parabolic SAR for crossovers, less sensitive than the 5 MA, Can still whipsaw quite a bit to give buy/sell signal back to back
NASI USES a wider Parabolic SAR for crossovers - Much less noise but buy/sell signals can be delayed slightly, very little whipsaw
CHARTS OF THE NYSI:
NYSI Uses the 5 MA as a buy signal, but can whipsaw quite a bit.
NYSI Uses Parabolic SAR for crossovers, less sensitive than the 5 MA, Can still whipsaw quite a bit to give buy/sell signal back to back
http://breakpointtrades.com/indicator_summation.htm
The NASDAQ McClellan Summation Index ($NASI) and the NYSE McClellan Summartion Index ($NYSI) look at the gap between the number of advancers and decliners on the Nasdaq and NYSE to give a net positive or negative number that indicates how overbought or oversold the market on a given day.
Using the NASI and NYSE:
The NASI is very good at predicting the intermediate Nasdaq trend of about 1 - 3 months as is the NYSI for the NYSE. Buy and sell signals are triggered when the the NASI and NYSI change direction.
The NASI is very useful as a general market indicator and could be used to swing trade QQQ, NQ futures, or an agressive growth mutual fund.
The NYSI is very useful as a general market indicator for the NYSE.
Use the following as buy/sell triggers to determine a change in the NASI and NYSI trends:
1. 5 MA crossover or Parabolic SAR buy/sell signal:
2. MACD crossover:
3. Stochastics crossover of 20 for a buy signal or below 80 for a sell signal
CHART OF THE NASI:
NASI Uses the 5 MA as a buy signal, but can whipsaw quite a bit.
NASI Uses Parabolic SAR for crossovers, less sensitive than the 5 MA, Can still whipsaw quite a bit to give buy/sell signal back to back
NASI USES a wider Parabolic SAR for crossovers - Much less noise but buy/sell signals can be delayed slightly, very little whipsaw
CHARTS OF THE NYSI:
NYSI Uses the 5 MA as a buy signal, but can whipsaw quite a bit.
NYSI Uses Parabolic SAR for crossovers, less sensitive than the 5 MA, Can still whipsaw quite a bit to give buy/sell signal back to back
http://breakpointtrades.com/indicator_summation.htm
Sunday, May 17, 2009
DRYS quick move on May 13-15, 2009
QQQ said... May 12, 2009 6:11 PM
got a note from a shipper guy, buy shipping stocks if you still can trade now: DRYS, @7.04
QQQ said... May 13, 2009 9:39 AM
stopped out DRYS
QQQ said... May 15, 2009 9:37 AM
in DRYS long 6.55 stop 6.25
$BDI keeps up so does shipping and ag sectors. DRYS for quick catch the run
QQQ said... May 15, 2009 10:56 AM
take 1/2 DRYS off, 7.40, good enough for 15%. Remain 1/2 DRYS with stop at 7
QQQ said... May 15, 2009 12:22 PM
exited final 1/2 DRYS at 7.17, still good gain from 6.6
Our member said...
i followed ur drys call to enter @7.04, and stopped out at 6.4 (i made it wider since i did not want to be stopped out.) lost 60. fri, i saw u entered drys @6.55. i put order to buy at 6.6, no luck. 6.8. no. 6.9 no. 7.08 I got it. lunch time, u sold at 7.4. i sold mine at 7.21. made 10. total lost 50.
however, it seemed y** did get stopped out since he saw BDI up. if we did the same based on BDI, instead of stop-out on wed, added more on thur, we would won.
Please listen QJ's comments on Sunday Class
5/17 Sunday TA Class Prep
got a note from a shipper guy, buy shipping stocks if you still can trade now: DRYS, @7.04
QQQ said... May 13, 2009 9:39 AM
stopped out DRYS
QQQ said... May 15, 2009 9:37 AM
in DRYS long 6.55 stop 6.25
$BDI keeps up so does shipping and ag sectors. DRYS for quick catch the run
QQQ said... May 15, 2009 10:56 AM
take 1/2 DRYS off, 7.40, good enough for 15%. Remain 1/2 DRYS with stop at 7
QQQ said... May 15, 2009 12:22 PM
exited final 1/2 DRYS at 7.17, still good gain from 6.6
Our member said...
i followed ur drys call to enter @7.04, and stopped out at 6.4 (i made it wider since i did not want to be stopped out.) lost 60. fri, i saw u entered drys @6.55. i put order to buy at 6.6, no luck. 6.8. no. 6.9 no. 7.08 I got it. lunch time, u sold at 7.4. i sold mine at 7.21. made 10. total lost 50.
however, it seemed y** did get stopped out since he saw BDI up. if we did the same based on BDI, instead of stop-out on wed, added more on thur, we would won.
Please listen QJ's comments on Sunday Class
5/17 Sunday TA Class Prep
Friday, May 15, 2009
TA Tips
----------------------------------------------------
Market Indicators
Sector
----------------------------------------------------
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- StockCharts's ChartSchool
- DecisionPoint's TA Course
- The Investment FAQ TA Basics
- TASC Traders' Glossary
Market Indicators
- Percent of stocks above 50MA and 200MA
- VIX and VXN Indicators
- TRIN and TICK
- Breadth Indicator
- Bullish Percent Index (BPI)
- NYMO
- NASI (Nasdaq) and NYSI (NYSE)
Sector
----------------------------------------------------
-----------------------------------------------------------------------------------
----------------------------------------------------------------------------------
- TA Tip (1) About Gaps and Day Trading Critical Time Spots
- TA Tip (2) 尾盘拉升
- TA Tip (3) Intra-day Measured Move for Exit Target
- TA Tip (4) How Gap Up Open Can Kill Us
- TA Tip (5) Mkt Sense: Easy Come, Easy Go (Mid-term View of SPX)
- TA Tip (6) Use Breadth Indicator
- TA Tip (7) Follow Big Boys
- TA Tip (8) Path to Success
BDI
转自 Youfala，posted by BrainTeaser
Real Time BDI index update link(given by 老姜 @HT)
http://www.dryships.com/pages/report.asp
Why is it important?
The relation between BDI and other sections.
http://www.investmenttools.com/futures/bdi_baltic_dry_index.htm#bdi_sp
BDI上升说明了什么?
老姜said...
BDI干货海运指数与经济活动有很大关系。除了铁矿外，还有农药，煤,等和其它的。BDI开始上升，说明了经济活动开始转热。股市如何走，当然是跟着经济走。
Real Time BDI index update link(given by 老姜 @HT)
http://www.dryships.com/pages/report.asp
Why is it important?
The relation between BDI and other sections.
http://www.investmenttools.com/futures/bdi_baltic_dry_index.htm#bdi_sp
BDI上升说明了什么?
老姜said...
BDI干货海运指数与经济活动有很大关系。除了铁矿外，还有农药，煤,等和其它的。BDI开始上升，说明了经济活动开始转热。股市如何走，当然是跟着经济走。
Wednesday, May 13, 2009
Bollinger Bands
TA_Wen said...
BB(N, K) consists of a) a middle band being an N-period simple moving average, b) an upper band at K times an N-period standard deviation above the middle band, and c) a lower band at K times an N-period standard deviation below the middle band. Usually we choose BB(20, 2).
We expected that the price is oscillating between upper BB and lower BB. In another words, after the price LEAVES upper BB, we expect its next stop will be on lower BB, and vice versa.
An fast movement on the downside will expand BB range since the N-period standard deviation (sigma) increases. After that, if the price continues dropping with its momentum decreasing, sigma decreases so BB band (upper-lower) tightens. The follow-up of 50ema typically lags but it will catch up. If BB tightens faster than 50ema, the 50ema will fall below lower BB. This is purely a result of parameter selection for the indicators. BUT:
1. As the price stays below 50ema, the declining 50ema acts as a natural resistance;
2. As the price touches upper BB, it can stay there for a short while but it has the tendency to leave upper BB and go reaching lower BB.
Adding 1 and 2: it will be hard for the price to penetrate 50ema while sticking to to upper BB. So the upside profit could be rather limited even with positive divergence.
A chart for today's spy may help explaining it better:
http://stockcharts.com/h-sc/ui?s=SPY&p=5&yr=0&mn=0&dy=2&id=p79800031269&listNum=1&a=166538664
For 50ema below lower BB, back test some "gap-up" days and you will see. On those days you will find negative divergence but they couldn't play out.
BB(N, K) consists of a) a middle band being an N-period simple moving average, b) an upper band at K times an N-period standard deviation above the middle band, and c) a lower band at K times an N-period standard deviation below the middle band. Usually we choose BB(20, 2).
We expected that the price is oscillating between upper BB and lower BB. In another words, after the price LEAVES upper BB, we expect its next stop will be on lower BB, and vice versa.
An fast movement on the downside will expand BB range since the N-period standard deviation (sigma) increases. After that, if the price continues dropping with its momentum decreasing, sigma decreases so BB band (upper-lower) tightens. The follow-up of 50ema typically lags but it will catch up. If BB tightens faster than 50ema, the 50ema will fall below lower BB. This is purely a result of parameter selection for the indicators. BUT:
1. As the price stays below 50ema, the declining 50ema acts as a natural resistance;
2. As the price touches upper BB, it can stay there for a short while but it has the tendency to leave upper BB and go reaching lower BB.
Adding 1 and 2: it will be hard for the price to penetrate 50ema while sticking to to upper BB. So the upside profit could be rather limited even with positive divergence.
A chart for today's spy may help explaining it better:
http://stockcharts.com/h-sc/ui?s=SPY&p=5&yr=0&mn=0&dy=2&id=p79800031269&listNum=1&a=166538664
For 50ema below lower BB, back test some "gap-up" days and you will see. On those days you will find negative divergence but they couldn't play out.
Tuesday, May 12, 2009
DE option trading on May 11, 2009
QJ said...
DE, Sep 25P and 35P both strike were buyToOpen last Friday, see OI on DE Sep. so it is a short.
I am trying, DE sep 35P to 38P, only at bid side or 5-10 cents lower to see if they can fill any today
Update on second day
Long DE Sep. 35P 2.20 current 2.35, 36P 2.55, current 2.70
Wahaa said...
I followed you on DE trade after I checked the charts. But I didn't buy put. I sold Sep 50 calls.
DE, Sep 25P and 35P both strike were buyToOpen last Friday, see OI on DE Sep. so it is a short.
I am trying, DE sep 35P to 38P, only at bid side or 5-10 cents lower to see if they can fill any today
Update on second day
Long DE Sep. 35P 2.20 current 2.35, 36P 2.55, current 2.70
Wahaa said...
I followed you on DE trade after I checked the charts. But I didn't buy put. I sold Sep 50 calls.
AXL big move on May 8, 2009
Peter said... May 8, 2009 10:57AM
I'm trading AXL today, in at 2.12, limit just triggered at 2.80. I should have set it at 3.5 area.
TA_Wahaa said...
Peter, how did you pick axl?
Peter said...
It's in my "speculation chamber" in the last few days, among about 20 of volume movers.
I missed LJPC on Wed (0.20) since I was with my mother in law in the hospital (she is under a cancer surgery and treatment).
I liked AXL because of its ER issued on Tue. The bottom line, it's making more net than a year ago, when the price was at 25. I really should have a core position and DT on top of it. This stock may have potential to approach 10, unless of course there is one big bearish market move again.
TA_Wahaa said...
Wow, Peter's AXL goes to MOON now!
TA_Wahaa said...
Peter, how do you choose "speculation chamber" ? Please share with us:-)
Peter said...
LEA is in the same business of AXL and had a nice run yesterday (there is a follow through today too). But I like AXL' fundamentals better.
Monday, May 11, 2009
Links
Sector View and Charts
(0) Simple Stock Scan:
http://stockcharts.com/def/servlet/SC.scan
(1) Group1: Trading Systems
SPY-60min Main system for swing trade
SPY-30min Array of moving averages
SPY-15min DT system on MA cross
SPY-5min DT system MA cross and 50ema
FAS-5min, SKF-15min, SDS-15min, SRS-15min
DXD-60min, SDS-60min, SKF-60min, SRS-60min, QID-60min
SRS-Daily-Renko, UYG-5min-Renko
SKF-Daily-Renko, SKF-60min-Renko
SPX-15min-Renko, SPX-5min-Renko
FAZ-5min-Renko, FAS-5min-Renko
(2) Group2: Mkt Indicators
All-Index-Daily, $SPX-W, $SPX, $SPX2, $OEX, SPX-Weekly-STO-Cross, SPX-Daily-STO-Cross, $INDU-W, $INDU, $COMPQ-W, $COMPQ, $RUT-W, $RUT, $SSEC-W , $SSEC, $HSI, XIU.TO, $TSE
$INDU-60min, $SPX-60min, $COMPQ-60min, $NDX-60min, $RUT-60min,
$VIX, $TICK, $BPCOMPQ, $BPSPX, $BPNYA, $BPENER, $BPFINA, $NYMO, $NYSI, $NYSI-W, $BDI, $BKX
(3) Group 3: Important ETFs
QQQQ, XLF,USO, XLE, OIH, XLI, XLY, DBA, DBC, XLB, XHB, USD, UUP, FXE, $TNX, TLT, TBT, FXI, FXP, CAF
(4) Group4: $INDU and Dow30
$INDU, AA, AXP, BA, BAC, C, CAT, CVX, DD, DIS, GE, GM, HD, HPQ, IBM, INTC, JNJ, JPM, KFT, KO, MCD, MMM, MRK, MSFT, PFE, PG, T, UTX, VZ, WMT, XOM
(5) Group5: Sector Leaders
Financials:GS, JPM, WFC, BAC, STI, C, COF, CME, ICE, MA, V
Tech:AAPL, AMZN, PCLN, GOOG, QCOM, PALM, BIDU, RIMM, ORCL, ISRG, VMW, SOHU, NFLX, NTES
Energy: XOM, CVX, COP, PTR, SGR
Agriculture: POT, MOS, MON, MOO, AGU, FEED
Solar: FSLR ,STP, YGE
Steel: X, NUE, CLF, AKS, SID
Metal: GLD, GDX, GOLD, ABX, AUY, SLV, BVN, RTP, FCX, PCU, TCK, BOOM
Shipping: GNK, DSX, DRYS, EXM, NM
Coal: MEE, JRCC, KOL, YZC
Websites and Blog Lists
Websites
(1) SPX-Heat-Map
(2) Intra-day-ISE
(3) Earning Watcher
(4) COT-Weekly-Update
(5) The Market Ticker
Chart Sites:
(1) Cobra Charts
(2) AstroCycle.net
(3) Matthew Frailey Public Charts
(4) My Public Chart List
Blogs
(1) Cobra's Marget View
(2) Daneric's Elliott Waves
(3) Crude Oil Trading Small Specs
(4) Allan's Blog
(0) Simple Stock Scan:
http://stockcharts.com/def/servlet/SC.scan
(1) Group1: Trading Systems
SPY-60min Main system for swing trade
SPY-30min Array of moving averages
SPY-15min DT system on MA cross
SPY-5min DT system MA cross and 50ema
FAS-5min, SKF-15min, SDS-15min, SRS-15min
DXD-60min, SDS-60min, SKF-60min, SRS-60min, QID-60min
SRS-Daily-Renko, UYG-5min-Renko
SKF-Daily-Renko, SKF-60min-Renko
SPX-15min-Renko, SPX-5min-Renko
FAZ-5min-Renko, FAS-5min-Renko
(2) Group2: Mkt Indicators
All-Index-Daily, $SPX-W, $SPX, $SPX2, $OEX, SPX-Weekly-STO-Cross, SPX-Daily-STO-Cross, $INDU-W, $INDU, $COMPQ-W, $COMPQ, $RUT-W, $RUT, $SSEC-W , $SSEC, $HSI, XIU.TO, $TSE
$INDU-60min, $SPX-60min, $COMPQ-60min, $NDX-60min, $RUT-60min,
$VIX, $TICK, $BPCOMPQ, $BPSPX, $BPNYA, $BPENER, $BPFINA, $NYMO, $NYSI, $NYSI-W, $BDI, $BKX
(3) Group 3: Important ETFs
QQQQ, XLF,USO, XLE, OIH, XLI, XLY, DBA, DBC, XLB, XHB, USD, UUP, FXE, $TNX, TLT, TBT, FXI, FXP, CAF
(4) Group4: $INDU and Dow30
$INDU, AA, AXP, BA, BAC, C, CAT, CVX, DD, DIS, GE, GM, HD, HPQ, IBM, INTC, JNJ, JPM, KFT, KO, MCD, MMM, MRK, MSFT, PFE, PG, T, UTX, VZ, WMT, XOM
(5) Group5: Sector Leaders
Financials:GS, JPM, WFC, BAC, STI, C, COF, CME, ICE, MA, V
Tech:AAPL, AMZN, PCLN, GOOG, QCOM, PALM, BIDU, RIMM, ORCL, ISRG, VMW, SOHU, NFLX, NTES
Energy: XOM, CVX, COP, PTR, SGR
Agriculture: POT, MOS, MON, MOO, AGU, FEED
Solar: FSLR ,STP, YGE
Steel: X, NUE, CLF, AKS, SID
Metal: GLD, GDX, GOLD, ABX, AUY, SLV, BVN, RTP, FCX, PCU, TCK, BOOM
Shipping: GNK, DSX, DRYS, EXM, NM
Coal: MEE, JRCC, KOL, YZC
Websites and Blog Lists
Websites
(1) SPX-Heat-Map
(2) Intra-day-ISE
(3) Earning Watcher
(4) COT-Weekly-Update
(5) The Market Ticker
Chart Sites:
(1) Cobra Charts
(2) AstroCycle.net
(3) Matthew Frailey Public Charts
(4) My Public Chart List
Blogs
(1) Cobra's Marget View
(2) Daneric's Elliott Waves
(3) Crude Oil Trading Small Specs
(4) Allan's Blog
Sunday Class
QQQ's classroom's 6 graduatation requirements
1. Good technical analysis ability
2. Great sense of mkt moves
3. Understand the relationship on various mkt actions
4. Knows how to control emotions
5. Knows when to be aggressive, when to just give up, knows how to protect ourselves
6. Know what mktMM and normal average traders are thinking, and use those "common sense" to win over them.
Trading rules
http://www.cnbc.com/id/28390714
http://stockcharts.com/help/doku.php?id=chart_school:trading_strategies:richard_rhodes_tradi
http://epowerage.com/tradingrules.aspx
http://www.thestockbandit.com/TradingRules.htm
http://www.stressfreetrading.com/Article-on-Stock-Market/stock-trading-rules.html
http://www.amazon.com/s/ref=nb_ss_b?url=search-alias%3Dstripbooks&field-keywords=trading+rules
Key points:
(a) Position Control: Account size and positioning to control the risk, there is NO mean to "all in".
(b) Entering Rule: (i) Reward/Risk=3:1; (ii) Obvious TA long and short signals
(c) Set Stops: Depends on your time frames, set DT or swing position stops at support (long) and resistance (short)
(d) Exit Rule: (i) Move stops and let it run; (ii) Take profit on extrames (10% for a few minutes, 20% in a day, too good to be true, can't believe trading is so easy......, when that happens, remember take profits, Trading is simple, but not easy, it is never wrong to take profits.)
Key points Again:
(a) 必须遵守纪律
(b) 必须做好功课
(c) 戒慌，慌者乱，乱者输
(d) 戒贪，不要急于想发大财，每天赚$300, 一年就是7万5千
--------------------------------------------------------------------------------------------------
A credit 理念 for trading account management
(a) 25,000 for example your first 5% is: 25000*0.05=$1250, so you only have $1250 to mess up. Any position you plan to enter, need calculate the maximum loss limit that can not exceed $1250. For Example: You want buy XYZ at $40, and you know the risk of XYZ is it can go $35. with $1250 in mind, you can only buy 250 shares of XYZ. After you enter XYZ at $40, you can NOT enter any other position until the XYZ trade complete. Because you do not have extra credit!
(b) Assume above trade ended with you sold XYZ at $42, you got 250*2=500 profit. Now your account is $25500, You now have $1275 credit that you can mess up with.....
(c) Assume a few days later, say your acct grows to 27,000. NOW reset your credit above your original investment. Now your credit is $2000. This makes sure your account remains positive. You are NOT allowed to mess up more that your credit!
(d) Ok, Back to (a), what if you loss? Your first trade made you loss 1250, now your acct becomes (25000-1250)=23750, your next trade credit=$1188. If you made another trade and lost $1188 again. STOP trading for 3 days and figure out what you did wrong.
This method enforces discipline you need to start. It keeps remind you YOU DO NOT ALLOW TO LOSS MONEY.
This method, your account grow slowly at the begining, but with winning trades starts grow, and your skills and confidence grows as well as .your credit.
-----------------------------------------------------------------------------------------------
Paltalkroom: qqqllc
Time: 8:30am-10am Pacific Time, 11:30 am-13 pm Eastern Time
2009
1. Good technical analysis ability
2. Great sense of mkt moves
3. Understand the relationship on various mkt actions
4. Knows how to control emotions
5. Knows when to be aggressive, when to just give up, knows how to protect ourselves
6. Know what mktMM and normal average traders are thinking, and use those "common sense" to win over them.
- 学作股市滑头
- 炒股一则是炒心态，另一则就是炒技术
- Topic on trading techniques (1)
- New Year Rules: Time Tested Classic Trading Rules
Trading rules
http://www.cnbc.com/id/28390714
http://stockcharts.com/help/doku.php?id=chart_school:trading_strategies:richard_rhodes_tradi
http://epowerage.com/tradingrules.aspx
http://www.thestockbandit.com/TradingRules.htm
http://www.stressfreetrading.com/Article-on-Stock-Market/stock-trading-rules.html
http://www.amazon.com/s/ref=nb_ss_b?url=search-alias%3Dstripbooks&field-keywords=trading+rules
Key points:
(a) Position Control: Account size and positioning to control the risk, there is NO mean to "all in".
(b) Entering Rule: (i) Reward/Risk=3:1; (ii) Obvious TA long and short signals
(c) Set Stops: Depends on your time frames, set DT or swing position stops at support (long) and resistance (short)
(d) Exit Rule: (i) Move stops and let it run; (ii) Take profit on extrames (10% for a few minutes, 20% in a day, too good to be true, can't believe trading is so easy......, when that happens, remember take profits, Trading is simple, but not easy, it is never wrong to take profits.)
Key points Again:
(a) 必须遵守纪律
(b) 必须做好功课
(c) 戒慌，慌者乱，乱者输
(d) 戒贪，不要急于想发大财，每天赚$300, 一年就是7万5千
--------------------------------------------------------------------------------------------------
A credit 理念 for trading account management
(a) 25,000 for example your first 5% is: 25000*0.05=$1250, so you only have $1250 to mess up. Any position you plan to enter, need calculate the maximum loss limit that can not exceed $1250. For Example: You want buy XYZ at $40, and you know the risk of XYZ is it can go $35. with $1250 in mind, you can only buy 250 shares of XYZ. After you enter XYZ at $40, you can NOT enter any other position until the XYZ trade complete. Because you do not have extra credit!
(b) Assume above trade ended with you sold XYZ at $42, you got 250*2=500 profit. Now your account is $25500, You now have $1275 credit that you can mess up with.....
(c) Assume a few days later, say your acct grows to 27,000. NOW reset your credit above your original investment. Now your credit is $2000. This makes sure your account remains positive. You are NOT allowed to mess up more that your credit!
(d) Ok, Back to (a), what if you loss? Your first trade made you loss 1250, now your acct becomes (25000-1250)=23750, your next trade credit=$1188. If you made another trade and lost $1188 again. STOP trading for 3 days and figure out what you did wrong.
This method enforces discipline you need to start. It keeps remind you YOU DO NOT ALLOW TO LOSS MONEY.
This method, your account grow slowly at the begining, but with winning trades starts grow, and your skills and confidence grows as well as .your credit.
-----------------------------------------------------------------------------------------------
Paltalkroom: qqqllc
Time: 8:30am-10am Pacific Time, 11:30 am-13 pm Eastern Time
2009
- 6/6 Sunday TA class: stucked? can not sell?
- 5/17 Sunday TA Class Prep
- 5/3 TA Class
- 4/26 Sunday TA class
- 4/12 TA Class Prep
- 4/5 TA Class Perp
- 3/29 TA Class: What we had and what we are looking...
- 3/22 Short Sunday Session for MKT Overview
- 3/15 Sunday TA class Prep
- 3/8 Sunday Class
- 3/1 Sunday TA Class Text and MP3
- 2/22 Sunday Class Summary: Text And Audio
- 2/8 Q&A Session
- 2/1 TA Class Prep
- 1/24-1/25 Weekend Discussion and Renko charts buy and sell signals
- 1/11 TA Class Prep
- 1/4 TA class
Sunday, May 10, 2009
FAQ - Bonds
lite1067 said...
QJ, yes, HY bonds are rallying.
For HY bonds, its spread has dropped dramatically since 12/15. For medium-term HY bonds, its spread over treasury has dropped from 2167 to 1819 bp. Multiplied by duration, you get the 20+% total return since Dec/15. This is a lot for bonds.
The underlying reason is as you stated. People are thinking the realized default rate will be much lower than the implied default rate. I remember I posted on HT or here before, people had priced in 80% 1929 depression in corporate bonds by mid-Dec. And I think I mentioned before (here and HT), if we don't get 1929 type depression, 2009 will be a great year for corporate bonds (IG and HY), not treasury.
But again, bond is not for DT, or even short term ST. These bond ETFs have very limited liquidity.
QQQ said...
Lite, Thanks for your comments on HYG, I was thinking buy it while it was 75, because chart suggests it is going higher, but because I don't understand it, I left it.
when mky consolidates, I have all my eyes and glasses looking at its action around 50ema. if they are accumulating, they won't break it too much on the down side tickle. also VOLUME, down on light vol, up on high vol tells the story also.
---------------------------------------------------------------------------------------
zippo said... March 27, 2009 11:09 PM
QJ, I am confused about the AGG, TIP, TLT. I thought they are all bond and should go with the same trend. But they appear behavior differently. I was thinking about parking some of my 401K money in the bond for the time being, especially in the inflation protected funds. Hope you or lite can help me on this. Thx.
what I mean is that why TIP and AGG drop some much last Oct., while TLT did not. With recent TIP spike (and Gov money printing), do you see inflation is coming sooner than later?
lite1067 said...
zippo,
let me try my best to explain without typing too much.
AGG = whole bond market including treasury (30-40%) + mortgage + corporate bonds
TIP = 7yr treasury + CPI (last oct when deflation was surfaced, CPI was negative and thus hurt TIPS). The duration corresponding TIP is about 5 years.
TLT = 20+yr long term treasury (the duration is 15years)
Right now, as fed keeps printing $$, we are in an inflationary environment where equity will outperform bond. If I have to choose among these three, TIP is the best bet as it combines the safety + inflation protection + less interest sensitivity than TLT . But again, you can use commodities and REITs for better inflation hedge.
For most people here with limited capital and short-term invest horizon, equity is arguably the better vehicle. But for mid or long term investment where you like to reduce the volatility of your portfolio performance to achieve an 'optimal' asset allocation, a combination of equity/fixed income/alternative investment such as commodities should be a good choice.
QJ, yes, HY bonds are rallying.
For HY bonds, its spread has dropped dramatically since 12/15. For medium-term HY bonds, its spread over treasury has dropped from 2167 to 1819 bp. Multiplied by duration, you get the 20+% total return since Dec/15. This is a lot for bonds.
The underlying reason is as you stated. People are thinking the realized default rate will be much lower than the implied default rate. I remember I posted on HT or here before, people had priced in 80% 1929 depression in corporate bonds by mid-Dec. And I think I mentioned before (here and HT), if we don't get 1929 type depression, 2009 will be a great year for corporate bonds (IG and HY), not treasury.
But again, bond is not for DT, or even short term ST. These bond ETFs have very limited liquidity.
QQQ said...
Lite, Thanks for your comments on HYG, I was thinking buy it while it was 75, because chart suggests it is going higher, but because I don't understand it, I left it.
when mky consolidates, I have all my eyes and glasses looking at its action around 50ema. if they are accumulating, they won't break it too much on the down side tickle. also VOLUME, down on light vol, up on high vol tells the story also.
---------------------------------------------------------------------------------------
zippo said... March 27, 2009 11:09 PM
QJ, I am confused about the AGG, TIP, TLT. I thought they are all bond and should go with the same trend. But they appear behavior differently. I was thinking about parking some of my 401K money in the bond for the time being, especially in the inflation protected funds. Hope you or lite can help me on this. Thx.
what I mean is that why TIP and AGG drop some much last Oct., while TLT did not. With recent TIP spike (and Gov money printing), do you see inflation is coming sooner than later?
lite1067 said...
zippo,
let me try my best to explain without typing too much.
AGG = whole bond market including treasury (30-40%) + mortgage + corporate bonds
TIP = 7yr treasury + CPI (last oct when deflation was surfaced, CPI was negative and thus hurt TIPS). The duration corresponding TIP is about 5 years.
TLT = 20+yr long term treasury (the duration is 15years)
Right now, as fed keeps printing $$, we are in an inflationary environment where equity will outperform bond. If I have to choose among these three, TIP is the best bet as it combines the safety + inflation protection + less interest sensitivity than TLT . But again, you can use commodities and REITs for better inflation hedge.
For most people here with limited capital and short-term invest horizon, equity is arguably the better vehicle. But for mid or long term investment where you like to reduce the volatility of your portfolio performance to achieve an 'optimal' asset allocation, a combination of equity/fixed income/alternative investment such as commodities should be a good choice.
Trading System
Peter said... March 6, 2009 10:51 AM
I'm experimenting a 5-min trading system I twigged last night, engaging VIX, $TICK, AND $MYADV.
Here is a link using FAZ as example (you need StockCharts subscription).
http://stockcharts.com/h-sc/ui?s=faz&p=5&yr=0&mn=0&dy=3&id=p22591172507
Things to see:
1) RSI stays most below 50% is bearish (like yesterday), mostly above 50% is bullish (like Wed)
2) Looking at EMA50 for general trend of the day
2) VIX - needless to say, but this chart makes it easier to reference
3) When $TICK touches -1000 - over sold, +1000 over bought, likely to reverse the trend
4) $NYADV is even a better reference to show bullishness/bearishness (we are neutral right now), and try to trade only with a trending market
5) STO/MACD for entry/exit decisions and confirmation
--------------------------------------------------------------------------
Sun
Using TRIX(9,5), MFI(35）, Full Stochastic(60) and SMA5 ONLY may provide better signal in daily charts. You may have a try.
I'm experimenting a 5-min trading system I twigged last night, engaging VIX, $TICK, AND $MYADV.
Here is a link using FAZ as example (you need StockCharts subscription).
http://stockcharts.com/h-sc/ui?s=faz&p=5&yr=0&mn=0&dy=3&id=p22591172507
Things to see:
1) RSI stays most below 50% is bearish (like yesterday), mostly above 50% is bullish (like Wed)
2) Looking at EMA50 for general trend of the day
2) VIX - needless to say, but this chart makes it easier to reference
3) When $TICK touches -1000 - over sold, +1000 over bought, likely to reverse the trend
4) $NYADV is even a better reference to show bullishness/bearishness (we are neutral right now), and try to trade only with a trending market
5) STO/MACD for entry/exit decisions and confirmation
--------------------------------------------------------------------------
Sun
Using TRIX(9,5), MFI(35）, Full Stochastic(60) and SMA5 ONLY may provide better signal in daily charts. You may have a try.
Wavelet Analysis
Peter said...
Classmates here knew that I was intrigued by "wavelet analysis" of stock chart and have been looking for resources to experiment.
I have found a site that offers such product with more advanced techniques than I initially envisioned, such as pre-regression, multiple smoothing algorithms and automatic seasoning identification in addition to the core FFT process.
The site offers a demo on daily chart, and it looks it went through the recent history with remarkable accuracies on stocks I've tested.
To the mkt's near future, interestingly enough, it PERSISTENTLY points to a big rally. Unlike most, if not all, TA indicators in time domain which changes/adjusts instantly as time goes, frequency domain based analysis seems to be constant and not influenced by day-to-day, hour-to-hour events, news, and market jitters - only time will tell its effectiveness.
I have been following it for only a week, so I'm waiting for it to prove itself. You can take a few test drive too if you like. Here is the link.
http://www.ipredict.it/OnlineDemo.aspx
I traded two hands of FAS yesterday, partially because the site's prediction on FAS. but each time was stopped out by its new lower lows. I realized that I was against the intraday trend, in which the stops are difficult to set - there were few opportunities that I could find an entry and instantly be able to stop loss at or near my cost.
So even my short-term (one to two weeks) view on the market and financial is bull biased (could be completely wrong), I've decided not to DT against trend. I will trade the chart, not the prediction. I had three hands of FAZ today and the entries were easy, two wins and one push. Each time I was able to set stops at or above my cost, even with the 3x power.
Classmates here knew that I was intrigued by "wavelet analysis" of stock chart and have been looking for resources to experiment.
I have found a site that offers such product with more advanced techniques than I initially envisioned, such as pre-regression, multiple smoothing algorithms and automatic seasoning identification in addition to the core FFT process.
The site offers a demo on daily chart, and it looks it went through the recent history with remarkable accuracies on stocks I've tested.
To the mkt's near future, interestingly enough, it PERSISTENTLY points to a big rally. Unlike most, if not all, TA indicators in time domain which changes/adjusts instantly as time goes, frequency domain based analysis seems to be constant and not influenced by day-to-day, hour-to-hour events, news, and market jitters - only time will tell its effectiveness.
I have been following it for only a week, so I'm waiting for it to prove itself. You can take a few test drive too if you like. Here is the link.
http://www.ipredict.it/OnlineDemo.aspx
I traded two hands of FAS yesterday, partially because the site's prediction on FAS. but each time was stopped out by its new lower lows. I realized that I was against the intraday trend, in which the stops are difficult to set - there were few opportunities that I could find an entry and instantly be able to stop loss at or near my cost.
So even my short-term (one to two weeks) view on the market and financial is bull biased (could be completely wrong), I've decided not to DT against trend. I will trade the chart, not the prediction. I had three hands of FAZ today and the entries were easy, two wins and one push. Each time I was able to set stops at or above my cost, even with the 3x power.
Market Cycle
Kevin said...
John Murphy once put up a graph showing sectors peaking vs the market cycle: XLF leading, then XLI, finally XLE. When XLE peaks, XLF is already down for a while. This market reflects that sequence, in a shorter time frame.
Kevin said...
i don't know how to upload the exact graph right now. but the "perfChart" function of stockchart.com gives you detailed results. http://stockcharts.com/charts/performance/perf.html?xle,xlf,xli
like2swing said...
Kenin, thanks for the perfchart. I can see it. XLE reaches DMA 200 today ($52). Its previous peak is $53.
Laogua said... May 7, 2009 8:57
今天healthcare板块不跌反涨，QJ昨天推荐LLY已经突破，大家有啥看法
杨过 said...
市场下跌时防御性sector: e.g. healthcare, utilities 会表现较好. 这也侧面说明新一轮跌势开始.(At least a couple of days).
QQQ said... May 13, 2009 4:54 PM
If mkt do recover from here, the order of bounce should be: QQQQ (leading components), Financial, then commodities..
this was the order of down side move, should be the order of recover. ALL in ALL SPX needs stay above 875, otherwise, the selling volume will jump in.
-----------------------------------------------------------------------------
Market Rotation Strategy
youfala.com posted by Brainteaser
先推荐这本书Book
再对书的内容稍微做一个介绍.
前阵子我一直在寻找一个良好的Market Rotation 的鉴别办法.
其中一个比较粗糙的想法就是,
连续观察section Money flow
http://www.sectorspdr.com/sectortracker/
在这里可以观察,Market 当天, 5天, 一月,三月, 一年, 52 weeks 的money flow 情况.
(题外话, 查查1个月和3个月的money flow, 就知道当前的market 的气氛了)
然后再去bigcharts找一下关心section的领头羊就可以了
http://bigcharts.marketwatch.com/industry/bigcharts-com/
而这本书里介绍的方法就是经过backtest的成功的system了.
首先,寻找6月了表现最好的ETF,进行投资, 每个月底的时候,只要ETF表现
还在前三,就不换,不然就换新的ETF.
同资金投资两个ETF开始.
6个月是不是太长了, 这样找出来的section rotation 还行么?
Anyway, backtest 结果在书中,效果很好.
更加精细的方法,就是由每月底的重新换仓位,改成每个礼拜的仓位调整.
并且加重最后一段时间的权重.来衡量Market的真正Rotation.
具体如何计算书里有介绍.
比较省力气的就是, 直接去看每个周末的, 他们的web update报告
http://www.etftradingstrategies.com/analysis.htm
下载pdf 看,包括international 的 Market Rotation 资料都有了.
是免费的.
Backtest数据是摆着的. 所以更加可信可操作.
John Murphy once put up a graph showing sectors peaking vs the market cycle: XLF leading, then XLI, finally XLE. When XLE peaks, XLF is already down for a while. This market reflects that sequence, in a shorter time frame.
Kevin said...
i don't know how to upload the exact graph right now. but the "perfChart" function of stockchart.com gives you detailed results. http://stockcharts.com/charts/performance/perf.html?xle,xlf,xli
like2swing said...
Kenin, thanks for the perfchart. I can see it. XLE reaches DMA 200 today ($52). Its previous peak is $53.
Laogua said... May 7, 2009 8:57
今天healthcare板块不跌反涨，QJ昨天推荐LLY已经突破，大家有啥看法
杨过 said...
市场下跌时防御性sector: e.g. healthcare, utilities 会表现较好. 这也侧面说明新一轮跌势开始.(At least a couple of days).
QQQ said... May 13, 2009 4:54 PM
If mkt do recover from here, the order of bounce should be: QQQQ (leading components), Financial, then commodities..
this was the order of down side move, should be the order of recover. ALL in ALL SPX needs stay above 875, otherwise, the selling volume will jump in.
-----------------------------------------------------------------------------
Market Rotation Strategy
youfala.com posted by Brainteaser
先推荐这本书Book
再对书的内容稍微做一个介绍.
前阵子我一直在寻找一个良好的Market Rotation 的鉴别办法.
其中一个比较粗糙的想法就是,
连续观察section Money flow
http://www.sectorspdr.com/sectortracker/
在这里可以观察,Market 当天, 5天, 一月,三月, 一年, 52 weeks 的money flow 情况.
(题外话, 查查1个月和3个月的money flow, 就知道当前的market 的气氛了)
然后再去bigcharts找一下关心section的领头羊就可以了
http://bigcharts.marketwatch.com/industry/bigcharts-com/
而这本书里介绍的方法就是经过backtest的成功的system了.
首先,寻找6月了表现最好的ETF,进行投资, 每个月底的时候,只要ETF表现
还在前三,就不换,不然就换新的ETF.
同资金投资两个ETF开始.
6个月是不是太长了, 这样找出来的section rotation 还行么?
Anyway, backtest 结果在书中,效果很好.
更加精细的方法,就是由每月底的重新换仓位,改成每个礼拜的仓位调整.
并且加重最后一段时间的权重.来衡量Market的真正Rotation.
具体如何计算书里有介绍.
比较省力气的就是, 直接去看每个周末的, 他们的web update报告
http://www.etftradingstrategies.com/analysis.htm
下载pdf 看,包括international 的 Market Rotation 资料都有了.
是免费的.
Backtest数据是摆着的. 所以更加可信可操作.
PitchFork
http://www.traderslog.com/andrews-pitchfork-indicator.htm
2/22 Sunday Class Summary: Text And Audio
3/1 Sunday TA Class Text and MP3
Using PitchFork, First Session: The Median Line by JimK (BlackTruck)
The below could be a useful link on ML.
http://www.esignalcentral.com/university/get/getManual/eSignal_Manual_ch18.pdf
2/22 Sunday Class Summary: Text And Audio
3/1 Sunday TA Class Text and MP3
Using PitchFork, First Session: The Median Line by JimK (BlackTruck)
The below could be a useful link on ML.
http://www.esignalcentral.com/university/get/getManual/eSignal_Manual_ch18.pdf
Saturday, May 9, 2009
Oil EIA
http://tonto.eia.doe.gov/oog/info/twip/twip_crude.html
This is the chart from last EIA, we see the continue increasing in OIL inventory. If this week, the inventory is DOWN, then it is bullish for OIL to continue move higher. If the inventory is up again, then I'd think this is bad for OIL.
1/14 Prep for OE and back test the wedge line
1/22 All eyes on OIL EIA
This is the chart from last EIA, we see the continue increasing in OIL inventory. If this week, the inventory is DOWN, then it is bullish for OIL to continue move higher. If the inventory is up again, then I'd think this is bad for OIL.
1/14 Prep for OE and back test the wedge line
1/22 All eyes on OIL EIA
Renko Trading System
http://www.investopedia.com/terms/r/renkochart.asp
SRS-Daily-Renko **** UYG-5min-Renko
SKF-Daily-Renko **** SKF-60min-Renko
SPX-15min-Renko **** SPX-5min-Renko
FAZ-5min-Renko **** FAS-5min-Renko
You can use Renko charts to filter out lots of noise and stay focus, Renko charts can be used for DT (1min, 5min) and for swing (daily, and 60min)
1/24-1/25 Weekend Discussion and Renko charts buy and sell signals
1/22 Be careful not to get killed before make money
SRS-Daily-Renko **** UYG-5min-Renko
SKF-Daily-Renko **** SKF-60min-Renko
SPX-15min-Renko **** SPX-5min-Renko
FAZ-5min-Renko **** FAS-5min-Renko
You can use Renko charts to filter out lots of noise and stay focus, Renko charts can be used for DT (1min, 5min) and for swing (daily, and 60min)
1/24-1/25 Weekend Discussion and Renko charts buy and sell signals
1/22 Be careful not to get killed before make money
Patterns and divergence
SPY-5min-Example link http://i39.tinypic.com/2lnkbhd.png
When negative/positive divergence play out, when not?
Most time, should I say almost all divergence high and low will be played out, intraday or daily. But as you see when mkt is breaking major resistance (last friday) or major support level, no one cares intra day divergence, this is the human greedy and fear natural, plus manipulation. But I do believe divergence will be played out when time comes.
H&S and Wedges
Head and Shoulders Bottom and Head and Shoulders Top
Falling Wedge and Rising Ewdge
(1) SPY-5min: (http://i43.tinypic.com/2cdb9fs.png) H&S, Triangle, Falling wedge, Macd divergence
(2) SPX-30min: (http://i40.tinypic.com/o0qyqp.png)Triangle and Falling Wedge
(3) $COMPQ-daily: Rising wedge
Falling Wedge and Rising Ewdge
(1) SPY-5min: (http://i43.tinypic.com/2cdb9fs.png) H&S, Triangle, Falling wedge, Macd divergence
(2) SPX-30min: (http://i40.tinypic.com/o0qyqp.png)Triangle and Falling Wedge
(3) $COMPQ-daily: Rising wedge
Wednesday, May 6, 2009
Watch List
Past Picks
Long:
, GOLD/GOLD-W, ELN, DOW, SQM, WYE ,
, LLY, CCJ, CDE, TER, CIEN, GGB, CBS, WTW, AMLN, HEV
, CME(230-235 entry 229 stop, target 200ema) , AAPL(below 125), AMZN (below 75), BIDU
, MOS, DRYS, GNK,
Short:
, DE, VFC, NUE, TRA, PTEN, CMG, NSC ,
, UTHR, PEP, ADI,
, NSC , FCX, AKS , CLF, BOOM
-----------------------------------------------------------------------------------------------
How to follow QJ's trading?
1) You should have two most powerful Quad-core Intel-processor desktops and THREE 30-inch, screens. monitor over 30 stocks/ETFs, and 6 main future symbols that QJ normally trade.
2) If you only have 50K acct, 2 contracts is about the right size. if you only have 25K or below, 1 contract is about the right size, unless you keep 10 wining day in a row, then you can increase to 2.
20 ES contracts is a full position for 500K account. each lot is 5 contracts count for 1/4 of full. As you can see, if I am not so sure, I only trade 1-2 lots. hedged position will depends on what and how much I need to hedge.
3) You should know this trick
I think I tell you the trick, during the day when I flip/flop ES around 50ema, you don't have to follow maybe it will be difficult for you to handle. But if (1) I wake up in the morning and immediatly sense something wrong and take action, or (2) I do something near close say I want something for tonight, you can follow those two.
because case (1) my brain is clean and should work well (2) after watch mkt for a day, the final conclusion that makes me take action normally is the safest one or have good reward/risk ratio.
4) The last thing is everyone can do. Read QJ's watchlist and comments seriously and take action without QJ holding your hands
note: QJ pick up many stocks based on optionsXpress option alerts. If you want to get alerts, you can call them and ask how to subscribe Xpound from optionsXpress Equity Team
I think I will mark strong (buy back dip) stocks in GREEN, and weak/short candidate on right panel, plus update SWING TRADE panel above every night. Just follow the trigger condition set in the chart. You should remember I am trading high risk Futures during the day that I need concentrate. I am not an stock/option trader. my 80% profit comes from future trades. I will review stocks/options at night.
Long:
, GOLD/GOLD-W, ELN, DOW, SQM, WYE ,
, LLY, CCJ, CDE, TER, CIEN, GGB, CBS, WTW, AMLN, HEV
, CME(230-235 entry 229 stop, target 200ema) , AAPL(below 125), AMZN (below 75), BIDU
, MOS, DRYS, GNK,
Short:
, DE, VFC, NUE, TRA, PTEN, CMG, NSC ,
, UTHR, PEP, ADI,
, NSC , FCX, AKS , CLF, BOOM
-----------------------------------------------------------------------------------------------
How to follow QJ's trading?
1) You should have two most powerful Quad-core Intel-processor desktops and THREE 30-inch, screens. monitor over 30 stocks/ETFs, and 6 main future symbols that QJ normally trade.
2) If you only have 50K acct, 2 contracts is about the right size. if you only have 25K or below, 1 contract is about the right size, unless you keep 10 wining day in a row, then you can increase to 2.
20 ES contracts is a full position for 500K account. each lot is 5 contracts count for 1/4 of full. As you can see, if I am not so sure, I only trade 1-2 lots. hedged position will depends on what and how much I need to hedge.
3) You should know this trick
I think I tell you the trick, during the day when I flip/flop ES around 50ema, you don't have to follow maybe it will be difficult for you to handle. But if (1) I wake up in the morning and immediatly sense something wrong and take action, or (2) I do something near close say I want something for tonight, you can follow those two.
because case (1) my brain is clean and should work well (2) after watch mkt for a day, the final conclusion that makes me take action normally is the safest one or have good reward/risk ratio.
4) The last thing is everyone can do. Read QJ's watchlist and comments seriously and take action without QJ holding your hands
note: QJ pick up many stocks based on optionsXpress option alerts. If you want to get alerts, you can call them and ask how to subscribe Xpound from optionsXpress Equity Team
I think I will mark strong (buy back dip) stocks in GREEN, and weak/short candidate on right panel, plus update SWING TRADE panel above every night. Just follow the trigger condition set in the chart. You should remember I am trading high risk Futures during the day that I need concentrate. I am not an stock/option trader. my 80% profit comes from future trades. I will review stocks/options at night.
Sunday, May 3, 2009
Option Trading Tips - Collar
Wahaa said...
If you want to just buy straight options (calls/puts), always buy deep-in-money ones. The common mistake that people tend to make is to buy the cheap out-money options, they end up to expire worthless.
Like Palm. It is a cheap stock. You could either buy stock or sell covered call. Use the premium to buy put to reduce the downside risk. It is called “Collar”. For more information, see : http://www.optiontradingtips.com/strategies/collar.html
But if you are really bullish about PALM, you could just buy 2010 $7.5 call. (I would not buy strike at $10 or $15 myself) Set some stop. If you feel like that the price of Palm is going to just be flat at this level, you could do Calendar spread, otherwise don’t do it.
Goog’s options are too expensive. I don’t like the spread of bid and ask. It’s better selling its options than buying them. You could do put bull spread june $330->$340. That is the bullish bet that GOOG will not go below $340 by June expiration date.
QJ said...
I have a question, what if GOOG goes 450 and PALM goes 12 before June 1?
Wahaa said...
In that case, buying deep-in-the-money calls will make more than bull put spread which reward/risk is capped.
Then your deep-in-money calls makes more money than your out-money calls. I believe that deep-in-the-money call options get the same move with the stocks with less money. The downside is that what happens if they don't move to your target? Your wonderful stop-loss action will minimize your loss (That is where I need to improve)
lite1067 said...
wahaa, QJ
buying deep ITM option is not good choice because:
1) less leverage but more capital at risk (why to buy option? the reason is right the opposite - to gain leverage and reduce the potential maximum capital loss)
2) the volatility skew is against you
Wahaa said...
right, usually I prefer to sell option spread to make a little money.
Well, on the other hand, it depends how long you hold the options. ITM options are still good choice if you speculate something. But it looks like that future trading is more fun!
I want PALM jan 2010 15C to 20C leaps, GOOG June Calls anywhere from 400C to 450C. If I see 82x/81x spx or where ever mkt shows end of this correction
If you want to just buy straight options (calls/puts), always buy deep-in-money ones. The common mistake that people tend to make is to buy the cheap out-money options, they end up to expire worthless.
Like Palm. It is a cheap stock. You could either buy stock or sell covered call. Use the premium to buy put to reduce the downside risk. It is called “Collar”. For more information, see : http://www.optiontradingtips.com/strategies/collar.html
But if you are really bullish about PALM, you could just buy 2010 $7.5 call. (I would not buy strike at $10 or $15 myself) Set some stop. If you feel like that the price of Palm is going to just be flat at this level, you could do Calendar spread, otherwise don’t do it.
Goog’s options are too expensive. I don’t like the spread of bid and ask. It’s better selling its options than buying them. You could do put bull spread june $330->$340. That is the bullish bet that GOOG will not go below $340 by June expiration date.
QJ said...
I have a question, what if GOOG goes 450 and PALM goes 12 before June 1?
Wahaa said...
In that case, buying deep-in-the-money calls will make more than bull put spread which reward/risk is capped.
Then your deep-in-money calls makes more money than your out-money calls. I believe that deep-in-the-money call options get the same move with the stocks with less money. The downside is that what happens if they don't move to your target? Your wonderful stop-loss action will minimize your loss (That is where I need to improve)
lite1067 said...
wahaa, QJ
buying deep ITM option is not good choice because:
1) less leverage but more capital at risk (why to buy option? the reason is right the opposite - to gain leverage and reduce the potential maximum capital loss)
2) the volatility skew is against you
Wahaa said...
right, usually I prefer to sell option spread to make a little money.
Well, on the other hand, it depends how long you hold the options. ITM options are still good choice if you speculate something. But it looks like that future trading is more fun!
I want PALM jan 2010 15C to 20C leaps, GOOG June Calls anywhere from 400C to 450C. If I see 82x/81x spx or where ever mkt shows end of this correction
TRIN and TICK
TRIN Overview:
Richard Arms developed the TRIN, or Arms index, as a contrarian indicator to detect overbought and oversold levels in the market. Because of its calculation method, the TRIN has an inverse relationship with the market. Generally, a rising TRIN is bearish and a falling TRIN is bullish. Sometimes you will see the scale of the TRIN inverted to reflect this inverse relationship.
Calculation
The TRIN is the advance/decline ratio divided by the advance volume/decline volume ratio:
TRIN 5 min The direction (not the level) is the most important. If the trend is up, then it is bearish. For example, if it's the middle of the day and the market is falling, but the TRIN begins to trend upwards, then it is very likely that the market intra day downtrend will reverse and trend up - and vice versa.
TRIN 60 min Greater then 1 is bearish, while less then 1 is bullish. However, extremely high levels, such as above and especially 2.5 are rare and are a bullish contrarian indicator.
TRIN 3 month For example, the longer the TRIN remains above 2, the more likely the market is to experience a strong rally
http://breakpointtrades.com/indicator_TRIN.htm
-----------------------------------------------------------------------------------
NYSE TRIN (Trading Index):
The NYSE TRIN (Trading Index) shows the relationship between stocks that are advancing or declining in price and the volume associated with these stocks. It is calculated by dividing the Advance/Decline Ratio by the Upside/Downside Ratio. The TRIN Index is a short-term trading tool. The goal of the indicator is to determine if volume is flowing into advancing or declining stocks and by what magnitude. The TRIN Index was first published by Richard W. Arms, Jr. in 1967. Generally, the TRIN Index is interpreted as bullish when it is below 1.0 and bearish when it is above 1.0.
TRIN rule:
1. If the trin is trending higher and making higher highs on the day, I will ignore all long setups.
If the trin is trending lower and making lower lows on the day, I will ignore all short setups.
2. If the trin closes above 2.0. the market has an 80% chance of rallying the next day. If the trin closes below 0.60. the market has an 80% chance of selling off the next day.
John Cater's Tick rule:
1. If I am long and the markets hit +1000 ticks, I will use that as a signal to exit the remainder of my position. If I am short and the markets hit -1000 ticks, I will use that as a signal to exit the remainder of my position.
2. I setup audio alerts at all the key tick levels (600, 800, 1000 levels)
3. When the ticks spend 90% of their time above zero with repeated extreme high tick readings, I ignore all day trading short setups and focus on longs, and vice visa.
bayliner1979 于 2009-4-21 16:54 :
stockhq的观察是对的。我用IB的5-min TICK, TRIN chart.
比如今天3:00pm左右850的高点，TICK进入了高于1000的extreme area，这时TRIN<1.0是个confirmation>1.0的话，就不是confirmation，多半3:30pm就趴窝了(i.e., throw back to the support line underneath)。
Bearish state正相反，TICK enters <-1000 extreme area, at this moment TRIN > 1.0 is a confirmation (of bear). Otherwise, likely throw up to the resistance line above.
http://www.quote.com/us/stocks/quote.action?s=$TRIN
http://www.quote.com/us/stocks/quote.action?s=$TICK
Richard Arms developed the TRIN, or Arms index, as a contrarian indicator to detect overbought and oversold levels in the market. Because of its calculation method, the TRIN has an inverse relationship with the market. Generally, a rising TRIN is bearish and a falling TRIN is bullish. Sometimes you will see the scale of the TRIN inverted to reflect this inverse relationship.
Calculation
The TRIN is the advance/decline ratio divided by the advance volume/decline volume ratio:
TRIN 5 min The direction (not the level) is the most important. If the trend is up, then it is bearish. For example, if it's the middle of the day and the market is falling, but the TRIN begins to trend upwards, then it is very likely that the market intra day downtrend will reverse and trend up - and vice versa.
TRIN 60 min Greater then 1 is bearish, while less then 1 is bullish. However, extremely high levels, such as above and especially 2.5 are rare and are a bullish contrarian indicator.
TRIN 3 month For example, the longer the TRIN remains above 2, the more likely the market is to experience a strong rally
http://breakpointtrades.com/indicator_TRIN.htm
-----------------------------------------------------------------------------------
NYSE TRIN (Trading Index):
The NYSE TRIN (Trading Index) shows the relationship between stocks that are advancing or declining in price and the volume associated with these stocks. It is calculated by dividing the Advance/Decline Ratio by the Upside/Downside Ratio. The TRIN Index is a short-term trading tool. The goal of the indicator is to determine if volume is flowing into advancing or declining stocks and by what magnitude. The TRIN Index was first published by Richard W. Arms, Jr. in 1967. Generally, the TRIN Index is interpreted as bullish when it is below 1.0 and bearish when it is above 1.0.
TRIN rule:
1. If the trin is trending higher and making higher highs on the day, I will ignore all long setups.
If the trin is trending lower and making lower lows on the day, I will ignore all short setups.
2. If the trin closes above 2.0. the market has an 80% chance of rallying the next day. If the trin closes below 0.60. the market has an 80% chance of selling off the next day.
John Cater's Tick rule:
1. If I am long and the markets hit +1000 ticks, I will use that as a signal to exit the remainder of my position. If I am short and the markets hit -1000 ticks, I will use that as a signal to exit the remainder of my position.
2. I setup audio alerts at all the key tick levels (600, 800, 1000 levels)
3. When the ticks spend 90% of their time above zero with repeated extreme high tick readings, I ignore all day trading short setups and focus on longs, and vice visa.
bayliner1979 于 2009-4-21 16:54 :
stockhq的观察是对的。我用IB的5-min TICK, TRIN chart.
比如今天3:00pm左右850的高点，TICK进入了高于1000的extreme area，这时TRIN<1.0是个confirmation>1.0的话，就不是confirmation，多半3:30pm就趴窝了(i.e., throw back to the support line underneath)。
Bearish state正相反，TICK enters <-1000 extreme area, at this moment TRIN > 1.0 is a confirmation (of bear). Otherwise, likely throw up to the resistance line above.
http://www.quote.com/us/stocks/quote.action?s=$TRIN
http://www.quote.com/us/stocks/quote.action?s=$TICK
Breadth Indicator
TA Tip (6) Use Breadth Indicator
Overall mkt: from FX to future to Cash, to VIX, $CPC, $ADD, $VOLD, when put everything together, will see better picture.
VIX keeps dropping even when market declines. What does it tell us?
well, mkt is still within the acsending triangle. $VIX is down because of no fear. as long as SPX remains at current level, above triangle up trend line, there is no fear.
$CPC means put/call ratio. $CPC raising normally has two means (1) Buy to open puts (2) sell to close calls.
http://www.cboe.com/publish/ScheduledTask/MktData/datahouse/totalpc.csv
$ADD = Advance decline indicator, Above 0 means more stocks advances than declines
The link for $ADD http://www.quote.com/us/stocks/quote.action?s=$ADD
Overall mkt: from FX to future to Cash, to VIX, $CPC, $ADD, $VOLD, when put everything together, will see better picture.
VIX keeps dropping even when market declines. What does it tell us?
well, mkt is still within the acsending triangle. $VIX is down because of no fear. as long as SPX remains at current level, above triangle up trend line, there is no fear.
$CPC means put/call ratio. $CPC raising normally has two means (1) Buy to open puts (2) sell to close calls.
http://www.cboe.com/publish/ScheduledTask/MktData/datahouse/totalpc.csv
$ADD = Advance decline indicator, Above 0 means more stocks advances than declines
The link for $ADD http://www.quote.com/us/stocks/quote.action?s=$ADD
$VOLD = NYSE $UVOL MINUS $DVOL 60 min chart (NYSE Up vol - Down vol).
Take a gook and compare how SPX moves while $VOLD start above 0 and remains upside moves. Other wise, when $VOLD remains read, indicates the down day ahead.
The link for $VOLD http://www.quote.com/us/stocks/quote.action?s=$VOLD
OIL contract expire
Case Study - OIL May contract exp April 21, 2009
Here is the link for OIL exp date http://www.nymex.com/CL_term.aspx
QQQ said... April 21, 2009 1:45 PM
boys and girls, be careful around 2:30PM when OIL May contract exp. USO trick could cause XLE move. and we already see how OIH did, big boys were OUT puts yesterday,
QQQ said...
KEEP eyes on CLM9 OIL June Contract around 2:30 for mkt direction. and XLF of course.
QQQ said... April 21, 2009 2:21 PM
waiting for 845-850, I am think if they get enough shorts here, they can sqeeze them to get it pass 842 for target 850. if 842 was real top, the sell off would have been bigger, not 5 points and supported by 50ema NOW, let's see.
remember this mkt needs shorts to go up. I will at least wait after 2:30
bokchoy said... April 21, 2009 2:36 PM
HOHO, QJ is niu, 2:30 bounce right on time
WhoAmI said...
market jumped after QJ's commends. I can not believe my eyes!!!
but i trust QJ, So I longed for a couple of minutes and took profit already.
QQQ said...
for DT ES, XLF, XLE, QQQQ, you at least see 2-3 red 5mins bars in a row on any 2 of these 3, to do a quick short, if not, stay long or flat.
QQQ said...
By the way, I am serious, My today's real time comments worth 10 year trading experiences. Please found time print out ES or SPX 5min charts and print out my comments with timing. Especially the comments on 2:30PM OIL and its impact, and when ES touches 50ema, remember what I said. Yes, try remember that in the rest of trading life. I am not kidding. It is very important to GET that mkt sense! Remember you NEEDs to standOUT to WIN this game!
This camp is not just for ES, I will cover a few concepts on Index Future (SPX/ES, NDX/NQ, DOW/YM, RUT/TF), Energy Futures (OIL/CL/QM), Metal Futures (Gold/GC/YG, Copper/HG), and Grain Futures (Wheat/W, Soybean/S, Corn/C) and currency future (EUR:USD, GBP:USD, AUD:USD). So after you complete the camp, you shall know the big picture of future trading world.
QQQ said... February 13, 2009 3:09 PM
OIL is now having a typical action on rolling contracts. to prove that, you can see march CL OI magically went down after today, and Apirl Contract CL's OI went up. the gap now around $5, which was the normal gap,
Here is the link for OIL exp date http://www.nymex.com/CL_term.aspx
QQQ said... April 21, 2009 1:45 PM
boys and girls, be careful around 2:30PM when OIL May contract exp. USO trick could cause XLE move. and we already see how OIH did, big boys were OUT puts yesterday,
QQQ said...
KEEP eyes on CLM9 OIL June Contract around 2:30 for mkt direction. and XLF of course.
QQQ said... April 21, 2009 2:21 PM
waiting for 845-850, I am think if they get enough shorts here, they can sqeeze them to get it pass 842 for target 850. if 842 was real top, the sell off would have been bigger, not 5 points and supported by 50ema NOW, let's see.
remember this mkt needs shorts to go up. I will at least wait after 2:30
bokchoy said... April 21, 2009 2:36 PM
HOHO, QJ is niu, 2:30 bounce right on time
WhoAmI said...
market jumped after QJ's commends. I can not believe my eyes!!!
but i trust QJ, So I longed for a couple of minutes and took profit already.
QQQ said...
for DT ES, XLF, XLE, QQQQ, you at least see 2-3 red 5mins bars in a row on any 2 of these 3, to do a quick short, if not, stay long or flat.
QQQ said...
By the way, I am serious, My today's real time comments worth 10 year trading experiences. Please found time print out ES or SPX 5min charts and print out my comments with timing. Especially the comments on 2:30PM OIL and its impact, and when ES touches 50ema, remember what I said. Yes, try remember that in the rest of trading life. I am not kidding. It is very important to GET that mkt sense! Remember you NEEDs to standOUT to WIN this game!
This camp is not just for ES, I will cover a few concepts on Index Future (SPX/ES, NDX/NQ, DOW/YM, RUT/TF), Energy Futures (OIL/CL/QM), Metal Futures (Gold/GC/YG, Copper/HG), and Grain Futures (Wheat/W, Soybean/S, Corn/C) and currency future (EUR:USD, GBP:USD, AUD:USD). So after you complete the camp, you shall know the big picture of future trading world.
QQQ said... February 13, 2009 3:09 PM
OIL is now having a typical action on rolling contracts. to prove that, you can see march CL OI magically went down after today, and Apirl Contract CL's OI went up. the gap now around $5, which was the normal gap,
WWW day sell off
WWW day ( Weird Wally Wednesday) refer to the Wednesday before OE week. This is the day normally sell off to kill calls before OE week. The wednesday usually have its job to wash off calls prepare for OE next week.WWW week behavior normally have Monday and Friday high and wednesday low.
Weird wally week is the week before options expiration week. Wednesday is actually weird wally wednesday. This is optionspositioning. This is done to run the call options down and then up on options expirations week. Often you will see a runup early in WeirdWally Week and then selloff the rest of the week. Options expiration is the 3rd friday of the week. Go back and check and you will seethis happens over and over. The markets job is take or make the most amount of money in the shortest time. Thats also why on Optionsexpiration friday you will see tremendous volatility up and down. Options at that point are extremely cheap and turn into 100-400%gains. By oex friday all the time premium has been taken out of the puts and calls and they are real cheap. You also see at least onebig up on OEX to run the calls up. Big money often becomes active then.
Weird wally week is the week before options expiration week. Wednesday is actually weird wally wednesday. This is optionspositioning. This is done to run the call options down and then up on options expirations week. Often you will see a runup early in WeirdWally Week and then selloff the rest of the week. Options expiration is the 3rd friday of the week. Go back and check and you will seethis happens over and over. The markets job is take or make the most amount of money in the shortest time. Thats also why on Optionsexpiration friday you will see tremendous volatility up and down. Options at that point are extremely cheap and turn into 100-400%gains. By oex friday all the time premium has been taken out of the puts and calls and they are real cheap. You also see at least onebig up on OEX to run the calls up. Big money often becomes active then.
MA crossover systems
Trading System (1): 5min BB MA and 15min MA
3/1 Sunday TA Class Text and MP3
3/2 Can positive divergence end this 5 of 3 of 5 o...
3/24 Pull back target?
Similar EMA crossing systems compared to Qj
http://breakpointtrades.com/controls/preview.php?la_id=603
http://breakpointtrades.com/controls/preview.php?la_id=667
QQQ said...
breakpointtrades.com is a good site, I like Steve Nelson's nightly mkt comments. MA cross trading systems are widely used many trading groups and funds, that was I mentioned many times in this blog, if you IN SRS position, do not wait after 3:45PM. from 3:45PM to 4:00PM is the Mechinical system EXIT time such as breakpointtrades.com's system. We sometine can use this trick to beat those machines.
What's the pros and cons between EMA and SMA (moving average)?
Take a look at these two charts: http://i39.tinypic.com/2rc5ses.png and http://i43.tinypic.com/73nk2w.png
How to fix the lag issue on MA crossover system (e.g 5min EMA7^21, 15min EMA16^34)by using other indicators?
The most important that you might want to move ahead of MA cross system is: volume action, trading pattern, and support/resistance zones with your 3:1 reward/risk assessment.
Sun's back-testing on MA crossing system
Trading System Test Result Summary (15 Min Chart)
Rules:
1. Long Only
2. Entry when EMA-No1/EMA-No2 Crossing Up
3. Exit when EMA-No1/EMA-No2 Crossing Down
4. Closing Any Position at EOD
5. Commission cost per trade: $9.99
Results:
a. Test Results using SPY (04/23/07 to 04/23/09):
EMA7/EMA21: Accumulative Return from 04/23/07 to 04/23/09: -39.44%
EMA8/EMA21: Accumulative Return from 04/23/07 to 04/23/09: -20.70%
EMA16/EMA39: Accumulative Return from 04/23/07 to 04/23/09: +16.76%
EMA13/EMA34: Accumulative Return from 04/23/07 to 04/23/09: +21.20%
b. Test Results using SSO (04/23/07 to 04/23/09):
EMA13/EMA34: Accumulative Return from 04/23/07 to 04/23/09: +57.93% (29%/Year)
QQQ said...
Thanks SUN888, how about add conditions say
(1) always exit positions at the end of day, no matter when to enter the position
(2) always set 3% stops, once it stops out, wait for next cross
that means the system always maintain cash position after 4PM and before 9:30AM
From 2007 to 2009 mainly bear mkt.
I heard people talking about SRS made 400% plus profit by using that system
SUN888 said...
1. The system I am using can only go back to 2 years.
2. We do not need to use trailing stop for this system. Test indicates 5% stop produces a better results than 3%. No stop has a better results than 3%.
3. I have not figured it out how to program to short. I am old... and hope some yang men to do more test...using their program skill.
4. For different stock, one needs to adjust ema ratio to produce a better result.
I sincerely hope someone to perform some more test and using different ema/sma ratios.
Anita said...
In TDAmeritrade "strategy setup", under "Action", there are two choices: buy, or sell short. You can set up either long or short. I never tried their automatic trading setups though.
SUN888 said...
Anita or others:
Thanks. Please see if you could comment below for Short. It does not work well for short, but I have not located the error in below.
Entry:
ExpMovingAverage[EMA,Close,9,0,15,1] > ExpMovingAverage[EMA,Close,39,0,15,1] AND ExpMovingAverage[EMA,Close,9,0,15] <> ExpMovingAverage[EMA,Close,39,0,15] OR (Bar[Hour,1] * 100) + (Bar[Minute,1]) >= 1558
SUN888 said...
I am using the below(using TD's StrtegyDesk) to test EMA7 and EMA21-15 Min crossing system with no sucess (lost money)up to now. If any one find any error from below, please let me know. Thanks.
Entry:
ExpMovingAverage[EMA,Close,7,0,15,1] <> ExpMovingAverage[EMA,Close,21,0,15]
Exit:
ExpMovingAverage[EMA,Close,7,0,15,1] > ExpMovingAverage[EMA,Close,21,0,15,1] AND ExpMovingAverage[EMA,Close,7,0,15] < ExpMovingAverage[EMA,Close,21,0,15]
StariX said...
Sun,I am not using TD so do not know the exact syntax .But I think you should use "-1" instead of "1" in the parameter. And you also need to consider close the position EOD. Some backtests are also necessary before u apply it into real trading.
QQQ said...
SUN888, on 15min chart, MA cross system works well when you EXIT every trade at CLOSING BELL. These days, almost every day we have GAPS, that kills the MA cross system if you carry overnight to next day.
90ufo said...
sun888, In TD Strategy Desk, you can add a "trailing stop" to the option of "Exit".
I tried backtest with a fixed (such as $1) trailing stop on SPY, it gives better result than without trailing stop. This makes sense, trailing stop keeps loss limited. ----- However, I have never used the mechanical MA cross system in my real trade.
SUN888 said...
Cautions and Comments on Using MTS based on EMANo1/EMANo2 and EOD:
Due to my time limit, I could not come here often. However, I feel I should have this post. In the last one week and weekend, I have done many tests(100+) related to this system using different ETFs(SSO/SDS, SRS, QLD/QID, DGP/DZZ, DIG/DUG, SKF/UYG, DTO/DXO, etc), EMANo1/EMANo2 ratios (7/21, 13/34, 9/39, 8/21, 16/143, etc), Time Periods(1, 2 year, 4 months), Minute System(30, 15, 5 or 3 min etc) and Long/Short. Although, I am still working on understanding this system/outcome and to evaluate the trading system. Cautions need be given using this system as below,
The outcome could be fully depend on,
1. The stock/ETF movement behavior for a given time frame. Therefore, the trend is critical to decide to use long/short.
2. EMANo1/EMANo2 Ratio
3. Time Frame (long/short term) for the back testing and the Minute System (30, 15, 5 or 3 min etc).
4. Any back testing not presents future outcome.
5. The outcome could be very volatile. It could produce a profit or lost in term of the above.
3/1 Sunday TA Class Text and MP3
3/2 Can positive divergence end this 5 of 3 of 5 o...
3/24 Pull back target?
Similar EMA crossing systems compared to Qj
http://breakpointtrades.com/controls/preview.php?la_id=603
http://breakpointtrades.com/controls/preview.php?la_id=667
QQQ said...
breakpointtrades.com is a good site, I like Steve Nelson's nightly mkt comments. MA cross trading systems are widely used many trading groups and funds, that was I mentioned many times in this blog, if you IN SRS position, do not wait after 3:45PM. from 3:45PM to 4:00PM is the Mechinical system EXIT time such as breakpointtrades.com's system. We sometine can use this trick to beat those machines.
What's the pros and cons between EMA and SMA (moving average)?
Take a look at these two charts: http://i39.tinypic.com/2rc5ses.png and http://i43.tinypic.com/73nk2w.png
How to fix the lag issue on MA crossover system (e.g 5min EMA7^21, 15min EMA16^34)by using other indicators?
The most important that you might want to move ahead of MA cross system is: volume action, trading pattern, and support/resistance zones with your 3:1 reward/risk assessment.
Sun's back-testing on MA crossing system
Trading System Test Result Summary (15 Min Chart)
Rules:
1. Long Only
2. Entry when EMA-No1/EMA-No2 Crossing Up
3. Exit when EMA-No1/EMA-No2 Crossing Down
4. Closing Any Position at EOD
5. Commission cost per trade: $9.99
Results:
a. Test Results using SPY (04/23/07 to 04/23/09):
EMA7/EMA21: Accumulative Return from 04/23/07 to 04/23/09: -39.44%
EMA8/EMA21: Accumulative Return from 04/23/07 to 04/23/09: -20.70%
EMA16/EMA39: Accumulative Return from 04/23/07 to 04/23/09: +16.76%
EMA13/EMA34: Accumulative Return from 04/23/07 to 04/23/09: +21.20%
b. Test Results using SSO (04/23/07 to 04/23/09):
EMA13/EMA34: Accumulative Return from 04/23/07 to 04/23/09: +57.93% (29%/Year)
QQQ said...
Thanks SUN888, how about add conditions say
(1) always exit positions at the end of day, no matter when to enter the position
(2) always set 3% stops, once it stops out, wait for next cross
that means the system always maintain cash position after 4PM and before 9:30AM
From 2007 to 2009 mainly bear mkt.
I heard people talking about SRS made 400% plus profit by using that system
SUN888 said...
1. The system I am using can only go back to 2 years.
2. We do not need to use trailing stop for this system. Test indicates 5% stop produces a better results than 3%. No stop has a better results than 3%.
3. I have not figured it out how to program to short. I am old... and hope some yang men to do more test...using their program skill.
4. For different stock, one needs to adjust ema ratio to produce a better result.
I sincerely hope someone to perform some more test and using different ema/sma ratios.
Anita said...
In TDAmeritrade "strategy setup", under "Action", there are two choices: buy, or sell short. You can set up either long or short. I never tried their automatic trading setups though.
SUN888 said...
Anita or others:
Thanks. Please see if you could comment below for Short. It does not work well for short, but I have not located the error in below.
Entry:
ExpMovingAverage[EMA,Close,9,0,15,1] > ExpMovingAverage[EMA,Close,39,0,15,1] AND ExpMovingAverage[EMA,Close,9,0,15] <> ExpMovingAverage[EMA,Close,39,0,15] OR (Bar[Hour,1] * 100) + (Bar[Minute,1]) >= 1558
SUN888 said...
I am using the below(using TD's StrtegyDesk) to test EMA7 and EMA21-15 Min crossing system with no sucess (lost money)up to now. If any one find any error from below, please let me know. Thanks.
Entry:
ExpMovingAverage[EMA,Close,7,0,15,1] <> ExpMovingAverage[EMA,Close,21,0,15]
Exit:
ExpMovingAverage[EMA,Close,7,0,15,1] > ExpMovingAverage[EMA,Close,21,0,15,1] AND ExpMovingAverage[EMA,Close,7,0,15] < ExpMovingAverage[EMA,Close,21,0,15]
StariX said...
Sun,I am not using TD so do not know the exact syntax .But I think you should use "-1" instead of "1" in the parameter. And you also need to consider close the position EOD. Some backtests are also necessary before u apply it into real trading.
QQQ said...
SUN888, on 15min chart, MA cross system works well when you EXIT every trade at CLOSING BELL. These days, almost every day we have GAPS, that kills the MA cross system if you carry overnight to next day.
90ufo said...
sun888, In TD Strategy Desk, you can add a "trailing stop" to the option of "Exit".
I tried backtest with a fixed (such as $1) trailing stop on SPY, it gives better result than without trailing stop. This makes sense, trailing stop keeps loss limited. ----- However, I have never used the mechanical MA cross system in my real trade.
SUN888 said...
Cautions and Comments on Using MTS based on EMANo1/EMANo2 and EOD:
Due to my time limit, I could not come here often. However, I feel I should have this post. In the last one week and weekend, I have done many tests(100+) related to this system using different ETFs(SSO/SDS, SRS, QLD/QID, DGP/DZZ, DIG/DUG, SKF/UYG, DTO/DXO, etc), EMANo1/EMANo2 ratios (7/21, 13/34, 9/39, 8/21, 16/143, etc), Time Periods(1, 2 year, 4 months), Minute System(30, 15, 5 or 3 min etc) and Long/Short. Although, I am still working on understanding this system/outcome and to evaluate the trading system. Cautions need be given using this system as below,
The outcome could be fully depend on,
1. The stock/ETF movement behavior for a given time frame. Therefore, the trend is critical to decide to use long/short.
2. EMANo1/EMANo2 Ratio
3. Time Frame (long/short term) for the back testing and the Minute System (30, 15, 5 or 3 min etc).
4. Any back testing not presents future outcome.
5. The outcome could be very volatile. It could produce a profit or lost in term of the above.
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