[acito616]

Thanks, I'm going to spend some time on Stockcharts.com and Google researching the Kijun Line you posted. I spend a lot of time drawing my own support and resistance areas so from first glance this "Ichimoku Kinko Hyo" might help make my work a little easier.

The Kijun Line is only part of Ichimoku, but I actually prefer to have it hidden so that I can just view the weekly cloud, which shows the dynamic resistance zone that Ichimoku creates, as the Kijun line is just another type of long term moving average. Attached is the settings in stockcharts for just the cloud on the normal weekly chart I use, which you can save as a template, and then view as a secondary chart.

Can you recommend any books or websites that I can spend some time researching and reading about Ichimoku?

acito

[isatrader]

Can you recommend any books or websites that I can spend some time researching and reading about Ichimoku?

Stockcharts has a summary page here: http://stockcharts.com/school/doku.php?i...moku_cloud and it recommends a book at the bottom of it. Also, I know their was a webinar on Big Mikes Trading Forum that I watched a few years back, but I think it was for subscribers only.

[acito616]

Can you recommend any books or websites that I can spend some time researching and reading about Ichimoku?

Stockcharts has a summary page here: http://stockcharts.com/school/doku.php?i...moku_cloud and it recommends a book at the bottom of it. Also, I know their was a webinar on Big Mikes Trading Forum that I watched a few years back, but I think it was for subscribers only.

Great, I subscribe to both stockcharts & bigmikes.

acito

[MalcolmSm1th]

I thought it would be helpful to members to do some quiz questions occasionally, and so as I have a bit of time I've attached is a mystery chart with a set of questions for you to answer.

1. What is the Stage of this stock?
   
2. Is price above a flat or rising 30 week MA?
   
3. What is the volume doing?
   
4. Is the relative performance versus the S&P 500 above or below the zero line?
   
5. Is the relative performance zero line itself down, flattening or rising?
   
6. Is there significant near term resistance?
   
7. Would you buy this stock?
   
8. I've also included the Sector chart and the S&P 500 at the time, so that you can evaluate their Stages also to complete the analysis.
   

- I believe that this a 2a stage. The stock has just broken out of the Stage 1.
- The price is above the MA and the MA is rising slightly.
- The volume has been increasing since December and is about double the volume moving average.
- The Relative Performance is above the zero line having just crossed it.
- The Relative Performance line is flattening.
- There is no significant near resistance; it has just cleared February 2012's high.
- Would I buy this? Yes, for all the reasons listed above.

[isatrader]

I thought it would be helpful to members to do some quiz questions occasionally, and so as I have a bit of time I've attached is a mystery chart with a set of questions for you to answer.

1. What is the Stage of this stock?
   
2. Is price above a flat or rising 30 week MA?
   
3. What is the volume doing?
   
4. Is the relative performance versus the S&P 500 above or below the zero line?
   
5. Is the relative performance zero line itself down, flattening or rising?
   
6. Is there significant near term resistance?
   
7. Would you buy this stock?
   
8. I've also included the Sector chart and the S&P 500 at the time, so that you can evaluate their Stages also to complete the analysis.
   

Thanks to the two that answered the quiz. It's time to reveal the mystery chart, which was CSIQ in the Solar sector.

I've attached the marked up chart, which shows it was at the Stage 2A breakout point and the 30 week MA had just started rising. Volume picked up to around 2x the average on the breakout week and was trading above a flattening zero line. Most of the near term resistance had been cleared on the breakout with only the early 2012 high to clear, but it had rallied directly off the bottom to make the Stage 2A breakout and so was quite extended short term. The sector chart had only just moved into Stage 1A, and was recovering, and meant that CSIQ was one of the leaders in the sector as it had already formed a large Stage 1 base and was breaking out, and so more research on other members of the sector would have been necessary to see if it was the best candidate in the group. The S&P 500 too was recovering after a failed Stage 4 breakdown attempt in November 2012 and was attempting to make a Stage 2 continuation move to new highs. And so it would have been a investor buy imo, but not quite an A+ candidate, more like an A- to B+ prospect due to the few issues I highlighted.

I've also attached the up to date chart, which shows that investors that got in at the Stage 2A entry point had to sit through a pullback to the 30 week MA of around 30% from the entry point after it's initial breakout and would have seen a range of around -40% from the initial high following the breakout as it hadn’t yet made a higher swing low and it was fairly extended short term at the Stage 2A breakout point. But nevertheless it managed to hold above the rising 30 week MA on it’s initial pullback and formed the secondary investor B entry point where an investor would add the second half to their position.

Since then it’s been up over 800% in it’s Stage 2 advance and the investor stop loss would now be up to around $25 just over a year later, and so you would have around 465% in gains protected so far, which is an amazing run for any stock. But I imagine a lot of people would have exited the stock on the first pullback as it had gone from a 15% profit following the initial breakout to -30% on the first pullback, and is why position sizing is an important consideration, as the pullback from the entry point was only 1.5x the 52 week average true range, which is quite normal.

I think this is a good example to show, as the initial Stage 2A breakout lacked decent relative volume on the the weeks following the breakout and could only manage to close one week above the 2012 high before rolling over and pulling back. But it then formed the secondary entry point and volume started to increase as it made the first continuation move into Stage 2. So it shows that it can take a while after the Stage 2A breakout point to get going and a lot of people got shaken out on that first pullback before it started it's dramatic Stage 2 advance with the all important heavy volume that so many mediocre Stage 2 runs are lacking.

[malaguti]

I thought it would be helpful to members to do some quiz questions occasionally, and so as I have a bit of time I've attached is a mystery chart with a set of questions for you to answer.

1. What is the Stage of this stock?
   
2. Is price above a flat or rising 30 week MA?
   
3. What is the volume doing?
   
4. Is the relative performance versus the S&P 500 above or below the zero line?
   
5. Is the relative performance zero line itself down, flattening or rising?
   
6. Is there significant near term resistance?
   
7. Would you buy this stock?
   
8. I've also included the Sector chart and the S&P 500 at the time, so that you can evaluate their Stages also to complete the analysis.
   

I seem to have a different answer to the others.
1)I still think this is in stage 1. I see this as a basing pattern looking like a double bottom playing out and would need to get past the 5 stage before considering a stage 2.
2) The MA looks flat rather than rising, although there is a tiny lip which isn't convincing enough to me
3) Volume increasing on the potential breakout..needs to get past 5 before a confirmed stage 2
4) relative performance is above the zero line
5) the nearest is at 5, to mark stage 2 and then again at 9
6) the sector and market charts are in alignment but the sector isn't convincing to be honest so I would buy only if I was convinced it had entered into stage 2 bearing in mind resistance is 2.5 times away from potential Reward:risk so I'd take some profit at 9
I'd look at others though, and I'd really want to see what the cloud pattern was like

Ok I sent this I see after the answers came out..man that is really bad..so can't even get the beginner questions right, WITH the damn answers !

[isatrader]

I seem to have a different answer to the others.
1)I still think this is in stage 1. I see this as a basing pattern looking like a double bottom playing out and would need to get past the 5 stage before considering a stage 2.
2) The MA looks flat rather than rising, although there is a tiny lip which isn't convincing enough to me
3) Volume increasing on the potential breakout..needs to get past 5 before a confirmed stage 2
4) relative performance is above the zero line
5) the nearest is at 5, to mark stage 2 and then again at 9
6) the sector and market charts are in alignment but the sector isn't convincing to be honest so I would buy only if I was convinced it had entered into stage 2 bearing in mind resistance is 2.5 times away from potential Reward:risk so I'd take some profit at 9
I'd look at others though, and I'd really want to see what the cloud pattern was like

Ok I sent this I see after the answers came out..man that is really bad..so can't even get the beginner questions right, WITH the damn answers !

That last bit made me laugh. Don't worry, I would have said similar when I was first learning the method and will help you learn, which is why I choose this example, as the breakout point was fairly good, but it had a few issues that I thought might make it more difficult.

On your first point once it moves into Stage 1 you should adjust your range breakout level to nearest significant weekly swing high above the 30 week MA, so hence why the breakout level changed down and then up again to just over $4 before it finally broke out, as a Stage 1 range evolves over time due to a number of factors like false breakouts like we saw in July on the CSIQ chart, where it produced a squat on the weekly bar and so reset the top of the Stage 1 range. Also, the 30 week simple MA will often be flat or only just turning up on the breakout week, as it's not as sensitive to recent prices as a weighted MA, but the rules are that it should be flattening or rising, so avoid if it's still declining.

On resistance the $5 level from the early 2012 high was fairly technical and a year old, so I wouldn't consider it as significant near term resistance, and the $9 zone was much more significant as had been the bottom area twice in 2010-11, but it was getting older and so the significance fades with time. Plus $9 was over 100% above the level of the chart, and so nothing to worry about imo, as you'd be pretty happy with a 100% gain.

I hope that helps, and I'll try and do some more questions soon of different Stages.

[JimStudent]

Thanks for the educational info. Also the little summaries in the Market Breadth posts are very helpful.