[marry123]

Hi Isa,

I did not buy BOS.TO (attached) but for educational purposes would the proper entry longs have been in April of 2018 right when price broke above the SPX price line AND volume was much greater than average (on weekly) AND price just broke above the 30 MA around low 10 (or would one needed to have waited for a break of resistance of around 12.80 where the top blue horizontal line is to enter long-double top around April and then July around 12.80 zone)?

I am also not clear as to the second entry long (this April) when price again broke above the SPX price line on very large volume on weekly AND price broke above the 30 MA (roughly low 8 entry long)? Or would one needed to have waited for price to break above the double top resistance around 10 (bottom blue horizontal resistance line)? 

Is it wrong to just buy as long as price breaks 30 MA that is not falling AND price breaks above the SPX price line on above average weekly volume even though there is resistance above? I would have bought under these conditions and not waited for price to break above resistance of around 12.80 in 2018 and around 10 this month.


Thanks for your view.

[isatrader]

Hi Isa,

I did not buy BOS.TO (attached) but for educational purposes would the proper entry longs have been in April of 2018 right when price broke above the SPX price line AND volume was much greater than average (on weekly) AND price just broke above the 30 MA around low 10 (or would one needed to have waited for a break of resistance of around 12.80 where the top blue horizontal line is to enter long-double top around April and then July around 12.80 zone)?

I am also not clear as to the second entry long (this April) when price again broke above the SPX price line on very large volume on weekly AND price broke above the 30 MA (roughly low 8 entry long)? Or would one needed to have waited for price to break above the double top resistance around 10 (bottom blue horizontal resistance line)? 

Is it wrong to just buy as long as price breaks 30 MA that is not falling AND price breaks above the SPX price line on above average weekly volume even though there is resistance above? I would have bought under these conditions and not waited for price to break above resistance of around 12.80 in 2018 and around 10 this month.


Thanks for your view.

For me there should never be any near term resistance to deal with. See 96-97 in the book about "The less resistance the better", as it really is a critical component of the method and is ignored at your peril.

In the case of BOS.TO in 2018 it wouldn't have been high on the list of candidates at its Stage 2A breakout point, as on the actual breakout week the broad market was struggling in Stage 3. And hence you would have been focusing on only the very highest quality stocks at that time that met all of the key requirements, of which BOS.TO didn't.

BOS.TO had only made a small four month base after the initial Stage 1 basing attempt had failed. And so on the Stage 2A breakout it was only just moving back into that higher base zone, and not to new six month highs as we'd ideally like to see as a minimum to be clear of near term resistance.

The volume did come in on the following weeks however, and it did manage a 40% rally before the pullback brought it all the way back and it failed completely. But I think you should be able to see from the chart below that it would not have been an A+ candidate at the time, and so you would have likely moved on to better quality setups.

   

As to today. We are in Stage 4 in the stock market indexes, and so the method says that you shouldn't be going long any stocks unless they are showing exceptional characteristics. See Stan's Don't commandments on page 129. Rule No.1 is: Don't buy when the overall market trend is bearish.

[marry123]

Hi Isa,

I did not buy BOS.TO (attached) but for educational purposes would the proper entry longs have been in April of 2018 right when price broke above the SPX price line AND volume was much greater than average (on weekly) AND price just broke above the 30 MA around low 10 (or would one needed to have waited for a break of resistance of around 12.80 where the top blue horizontal line is to enter long-double top around April and then July around 12.80 zone)?

I am also not clear as to the second entry long (this April) when price again broke above the SPX price line on very large volume on weekly AND price broke above the 30 MA (roughly low 8 entry long)? Or would one needed to have waited for price to break above the double top resistance around 10 (bottom blue horizontal resistance line)? 

Is it wrong to just buy as long as price breaks 30 MA that is not falling AND price breaks above the SPX price line on above average weekly volume even though there is resistance above? I would have bought under these conditions and not waited for price to break above resistance of around 12.80 in 2018 and around 10 this month.


Thanks for your view.

For me there should never be any near term resistance to deal with. See 96-97 in the book about "The less resistance the better", as it really is a critical component of the method and is ignored at your peril.

In the case of BOS.TO in 2018 it wouldn't have been high on the list of candidates at its Stage 2A breakout point, as on the actual breakout week the broad market was struggling in Stage 3. And hence you would have been focusing on only the very highest quality stocks at that time that met all of the key requirements, of which BOS.TO didn't.

BOS.TO had only made a small four month base after the initial Stage 1 basing attempt had failed. And so on the Stage 2A breakout it was only just moving back into that higher base zone, and not to new six month highs as we'd ideally like to see as a minimum to be clear of near term resistance.

The volume did come in on the following weeks however, and it did manage a 40% rally before the pullback brought it all the way back and it failed completely. But I think you should be able to see from the chart below that it would not have been an A+ candidate at the time, and so you would have likely moved on to better quality setups.



As to today. We are in Stage 4 in the stock market indexes, and so the method says that you shouldn't be going long any stocks unless they are showing exceptional characteristics. See Stan's Don't commandments on page 129. Rule No.1 is: Don't buy when the overall market trend is bearish.

Thanks Isa, I very much appreciate the education. Yes, I am not looking long stocks given the spx is in stage 4. What do you make of QQQ breaking above its 30 MA on the weekly (quite the moves in AMZN and TSLA)? I guess this is probably not meaningful until the SPX and DJIA also follow above their 30 MAs.

[isatrader]

Thanks Isa, I very much appreciate the education. Yes, I am not looking long stocks given the spx is in stage 4. What do you make of QQQ breaking above its 30 MA on the weekly (quite the moves in AMZN and TSLA)? I guess this is probably not meaningful until the SPX and DJIA also follow above their 30 MAs.

There's a chance that we could see some separation in the market as the Nasdaq is made up in large part of Technology and Health Care stocks, which are doing the best during the crisis so far, whereas the other indexes like the S&P 500 have more broad exposure to all sectors. So the Nasdaq 100 will likely continue to outperform until the weaker sectors like Financials begin to recover.

[Joe725]

I am looking at a stock at the moment and wondered if i could have some help. To me (inexperienced) it looks like the stock has reached a very good stage 2 peaked and broke down since it dropped below the 30 WMA. However now it looks like it's recovering it just below its 30 WMA but very close to touching it again and there has been larger volume than usual on the stock recently. Is this one for my watchlist to see if it can exceed the WMA when the market opens on Monday? 
Edit: I'm trying to add the image of the stock but it's not allowing me, the stock in question National Grid LON:NG

[isatrader]

I am looking at a stock at the moment and wondered if i could have some help. To me (inexperienced) it looks like the stock has reached a very good stage 2 peaked and broke down since it dropped below the 30 WMA. However now it looks like it's recovering it just below its 30 WMA but very close to touching it again and there has been larger volume than usual on the stock recently. Is this one for my watchlist to see if it can exceed the WMA when the market opens on Monday? 
Edit: I'm trying to add the image of the stock but it's not allowing me, the stock in question National Grid LON:NG

Hi Joe725,

The place to start with Stage Analysis is the broad market. What Stage is it in? If it's in Stage 4, then you'll want to do very little if any buying, even if you see some stocks breaking out. As you probabilities of success are quite low when the market trend is against you. Review page 75 in the book for the "Forest to the Tree approach". This is key, as you should always be in tune with the broad market trend, as on average around 75% of most stocks movements are correlated to the broad market. So you want to have the wind at your back when you trade, and not be fighting it.

This may be frustrating at times when you see stocks having big moves and you're not participating. But over the long run it will save you from a lot of pain. As you should always consider the risk first. And being on the right side of the market trend is the first step in that.

I've marked up the chart of National Grid for you. It's Stage 2 failed with the broad market collapse, causing it to bypass Stage 3 and move directly to Stage 4. If the stock was showing exceptional strength during the market collapse then you might consider it, but as you can see from the relative strength at the bottom of the chart, it's actually hugely underperformed while the market has rallied over the last four weeks. So it's done the opposite of what you want to see, which is outperformance.

It may do well and recover, but as far as the method is concerned it's not something to be looking at at the moment - see Stan's Don't commandments on page 129

   

[Joe725]

I am looking at a stock at the moment and wondered if i could have some help. To me (inexperienced) it looks like the stock has reached a very good stage 2 peaked and broke down since it dropped below the 30 WMA. However now it looks like it's recovering it just below its 30 WMA but very close to touching it again and there has been larger volume than usual on the stock recently. Is this one for my watchlist to see if it can exceed the WMA when the market opens on Monday? 
Edit: I'm trying to add the image of the stock but it's not allowing me, the stock in question National Grid LON:NG

Hi Joe725,

The place to start with Stage Analysis is the broad market. What Stage is it in? If it's in Stage 4, then you'll want to do very little if any buying, even if you see some stocks breaking out. As you probabilities of success are quite low when the market trend is against you. Review page 75 in the book for the "Forest to the Tree approach". This is key, as you should always be in tune with the broad market trend, as on average around 75% of most stocks movements are correlated to the broad market. So you want to have the wind at your back when you trade, and not be fighting it.

This may be frustrating at times when you see stocks having big moves and you're not participating. But over the long run it will save you from a lot of pain. As you should always consider the risk first. And being on the right side of the market trend is the first step in that.

I've marked up the chart of National Grid for you. It's Stage 2 failed with the broad market collapse, causing it to bypass Stage 3 and move directly to Stage 4. If the stock was showing exceptional strength during the market collapse then you might consider it, but as you can see from the relative strength at the bottom of the chart, it's actually hugely underperformed while the market has rallied over the last four weeks. So it's done the opposite of what you want to see, which is outperformance.

It may do well and recover, but as far as the method is concerned it's not something to be looking at at the moment - see Stan's Don't commandments on page 129

Thanks! Apart from the whole market collapse this would have been a decent stock to look at then? I'm currently using the coding for ProRealTime you provided which is amazing thank you so much for the time and effort you've put into them! Am I correct in thinking the process is to run the scans and then look through all the stocks and personally decided what i think is going to be breaking out into Stage 2?

[Mashed]

Hello guys,

Maybe the question is done, but i didnt find it.

In the Weinstein's book, we can read in volatile markets we should have a MA 10, and is better daily charts.
So my question is, is possible to check the crypto market whit method of stage analysis? Markets are markets right?
And about sectors and cryptos, do you know how can i put a sector (if exists) in Trading View to my relative strengh indicator? Make any sense have S&P500?

Thanks