[isatrader]

Thanks for the comments Isatrader. I don't feel disparaged ;-) I had to look for the meaning of that word because I didn't know it. Learning every day...

Sorry, it's easy to forget you not speaking to a native English speaker when you write it so well. I will try to keep the obscure words to a minimum ;-)

2. the measurement of relative performance/strength. There is a very interesting work of Clay Allen CFA about P&F relative strength charts. It's called 'Winning the performance game'. If you google on it, you can probably download it for free.
As Weinstein's writes (pg 109): "One week the relative strength can be positive, while the next week it is negative. The true picture forms only over a period of time". In other words, the trend of the RS is important.
And that's a advantage of the P&F RS charts. But I also notice it on the RS measurement of stockcharts.
On both charts one can see that the RS is bottoming. Measuring WIX vs the equal weighted SPX (SPXEW) is even clearer in my opinion.
In other words, could we refine the RS reading for a quicker entry? I think so. And perhaps that could be a advantage if we don't face any opportunity costs?

The RS trend on Weinstein method charts is done using a 52 week MA on the RS chart versus the S&P 500. This is what we call the "zero line" as it's what is used to create the flat Mansfield RS zero line used in the chart examples in the book. See example here: http://stageanalysis.net/forum/showthread.php?tid=31

But on here we've been able to take the zero line concept further, as my studies have indicated that the angle of the 52 week RS MA is also critically important and must be either flattening or rising on the Stage 2A breakout, for the best probabilities of a successful breakout. However, if the 52 week RS MA is still declining, or the breakout occurs while still below the 52 week RS MA, then the probabilities of a failed breakout are much greater.

So the "zero line" I talk of in the RS of the charts is the one year moving average, and hence one year trend of the relative performance versus the S&P 500 and so gives you the same information as the P&F RS charts, as it filters out the noise of the daily RS moves.

[isatrader]

BPOP - Stage 2 continuation attempt from large volatility contraction pattern

BPOP = bank sector > I was looking at the (bank) sector index and the sector RS vs SPXEWI.
They don't look good. Do you agree this sector is underperforming?

Left price chart of bank sector index, right RS of bank sector vs SPXEWI

Yes, the banking sector is in Stage 3 and the relative performance is below a declining zero line. So it's not a good sector currently.

   


As you might of noticed I don't do the sector relative performance for the charts I post in the watchlist, as that's something I leave for further research if a stock chart looks particularly interesting.

Have got to give the members something to do ;-)

[isatrader]

A few for the US short watchlist today - PRAA, SQBG

       

[isatrader]

GOGO - Stage 1B. Watching for a potential Stage 2A breakout attempt

           

[isatrader]

VEEV - Stage 1B. Watching for a new Stage 2A breakout attempt

           

[UPDATE: 5-3-15] It looks like VEEV crashed and burned after earnings results, and has fallen back to bottom of it's Stage 1 range. So is off the watchlist for the time being.

[pcabc]

A pullback, SURG:
   

[isatrader]

LBIO - Stage 1B. Watching for a Stage 2A breakout attempt

           

[isatrader]

EDN - a previous strong Stage 2 mover originally highlighted a week after it's Stage 2A breakout all the way back in September 2013, is starting to look interesting again after consolidating for the best part of the last year. It's made breakout above the Stage 3 range, and so is attempting to regain Stage 2, but is still below the previous Stage 2 highs currently.