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+--- Thread: Stage Analysis Beginners Questions (/Thread-Stage-Analysis-Beginners-Questions)
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RE: Stage Analysis Beginners Questions - fabi470 - 2021-09-03
(2021-09-02, 08:42 PM)isatrader Wrote:(2021-08-31, 12:16 PM)fabi470 Wrote: Hi David,
hope you are doing fine.
I am currently reading a book which consists from interviews wit top-traders such as Minervini, Zanger and Co..
There was one question, in which the 4 traders kind of disagreed: how to find stocks in combination with the right sector/ industry group.
There are 2 ways: - you could start to screen for stocks in an uptrend, that build a nice base, have at least XX avg. volume and so on - but they are all from different sectors and industries. And in a second step (i dont know, if they really care about that step, or if you can miss out on that one) they look, if the sector and / or industry is in a favourable position (i would call this approach bottom-up)
- the other possible way would be a top-down-approach: i will look for the strongest sector and / or group and only look there to find stocks with a good setup.
So, my question is, which approach do you prefer? Looking at the stocks first and then move on to sector /industry (=bottom-up)? Or first looking at sector / industry and only buying stocks from the "hottest" sector and / or industry? If you have a complet different approach, let me know that as well
Second question: is it the combination of a strong performing industry group in a strong sector? Or is the sector / the industry group more important to you?
Third question: i think i somewhere heard or read, that you should only buy stocks in sectors, that have currently a better RS than the S&P500 (e.g. Technology has 90RS and Financial 30RS and the S&P500 a RS80, i would only buy technology stocks). Do you agree with that concept?
I would be very happy to hear from you!
Greetings from Germany!
"I do agree with the concept to only buy stocks in sectors, that have currently a better RS than the S&P 500, and is the a cornerstone of the Stage Analysis Forest to the Trees approach."
Thanks for your response! Just to make sure: you mean the sectors like XLE, XLF and so on, dont you? Or do you mean the industry groups? It confuses me a bit, as Weinstein jumps between industry groups and sectors
RE: Stage Analysis Beginners Questions - isatrader - 2021-09-03
(2021-09-03, 10:03 AM)fabi470 Wrote: Thanks for your response! Just to make sure: you mean the sectors like XLE, XLF and so on, dont you? Or do you mean the industry groups? It confuses me a bit, as Weinstein jumps between industry groups and sectors
I look at both sectors and industry groups. See attached Stage Analysis Technical Attributes Chart (SATA) that I created for it.
What are the criteria?
Weekly Chart
- Stock in Stage 2
- Stock on RS buy signal* versus the S&P 500
- Stock on RS buy signal versus the Peer Group
- Peer Group on RS buy signal versus the S&P 500
- Sector on RS buy signal versus the S&P 500
RE: Stage Analysis Beginners Questions - fabi470 - 2021-09-03
Ok, i understand. This makes sense.
I guess i have to be a bit more precise about my question: each weekend i look at the current SCTR score of all sectors (XLE,XLF, and so on). In addition to that i will look at the current S&P500 SCTR score.
One example: last weekend (i only do these "bigger screens" or preparations on the weekend due to my full time job) i watched at the current SCTR scores (numbers are not the real ones):
XLF: 86
XLE: 45
XLU: 72
SPY: 80
So in this case, as only the financial sector (XLF) has a better SCTR than the SPY, i would only look for stocks in the financial sector to buy in the upcoming week.
Does that makes sense?
Members Discussion - tradingdirty - 2021-09-11
Hi All,
Am new to posting in this forum so hopefully I'm posting this in the right place!
I've taken on a market breadth study and wanted to share a small work in progress section to see a) what people think, b) what value they see in the data. I obviously have my own pov but would love some diversity of thought.
The part of the study I'm sharing is the % of stocks above their 30 and 10 Week MAs but broken down by Mega, Big, Mid and Small Cap.
There are quality parameters set around how I categorise stocks within these definitions to help remove outliers / anomalies.
The purpose for this part of the study was to try and see how money flowed through the market, washing from small to mega and back again.
Using the data I have (25 weeks at the moment as it's quite a manual process) I've also attempted to categorise the long and short term trends (long using the 30W MA and short using the 10W MA).
Based on the way I'm interpreting the data, last week would have been a POSITIVE week, whereas this week ended NEUTRAL+, but given this is a move to the downside (Positive to Neutral +) caution might be warranted.
Anyhoo, have attached the 25 weeks of data. Any thoughts or comments welcome.
RE: Members Discussion - isatrader - 2021-09-11
(2021-09-11, 05:31 AM)tradingdirty Wrote: Am new to posting in this forum so hopefully I'm posting this in the right place!
I've taken on a market breadth study and wanted to share a small work in progress section to see a) what people think, b) what value they see in the data. I obviously have my own pov but would love some diversity of thought.
I've moved the post to this new Members Discussion thread as I want to keep the main threads fairly clean so that members can see the regular content that they are paying for easily. As it's easy for it to get lost in the thread once multiple people start replying, as you start moving off to different pages. So I'll move posts to this thread or other relevant threads if that happens to help keep things organised.
I think your study is great, and is something I've looked at in the past myself as you know how much I value the Percentage of Stocks above their Moving Averages in my market breadth studies. But as you know, it's a manual process creating these each time currently, unless someone codes them up into something more automated someday. So takes a lot of time. So very appreciative of your efforts, and would love to see them regularly.
One thing to note with Percentage of Stocks above their Moving Averages and Bullish Percent Indexes etc, is that they are contrarian breadth indicators, so the field position determines the risk level. i.e. Above 70% is high risk zone and below 70% is low risk zone. So the strongest signals come from reversals out of these zones, when the offensive or defensive team takes the ball.
See the post on the investors intelligence website for how to interpret the data investorsintelligence.com/x/breadth_indicators
RE: Members Discussion - isatrader - 2021-09-11
(2021-09-11, 05:31 AM)tradingdirty Wrote: Anyhoo, have attached the 25 weeks of data. Any thoughts or comments welcome.
What data are you using to differentiate the sections. i.e. mega cap, big cap, mid cap and small cap?
RE: Members Discussion - tradingdirty - 2021-09-12
(2021-09-11, 12:05 PM)isatrader Wrote:(2021-09-11, 05:31 AM)tradingdirty Wrote: Anyhoo, have attached the 25 weeks of data. Any thoughts or comments welcome.
What data are you using to differentiate the sections. i.e. mega cap, big cap, mid cap and small cap?
Thanks for the article, super helpful. Hopefully as I build the back data I'll be able to see the overbought / oversold conditions.
I'm also collecting data on how all the stocks are moving and to what degree to try and understand the buying pressure in the market at any given time. I'm hoping this will help identify turning points or provide clues as to what the smart money is doing.
All up the study has 52 individual scans.
In terms of the definitions, I've used some fairly standard brackets around market cap.
Mega = Market Cap over $200 billion
Big = $10-200 billion
Mid= $2-10 billion
Small = $250 million = $2 billion
$LULU - Stage 2 Breakout Personal analysis - WayneMu54219378 - 2021-09-12
Follow up to IsaTrader LULU post.
Definite breakout of Wyckoff accumulation BUEC structure on volume
RS against SPX positive
RS against sector proxy ONLN (Online retailer ETF) positive
Less than 10% above 50 ema, so not extended (one of my entry criteria)
Piotrsoki F-Score 5 (my entry criteria > 4 to ensure some kind of fundamental strength - I know, not strictly Weinstein-ish!)
%change since 1 year low > 30
%change since 1 year high > -25
I make P&F target somewhere in the 550 region
This meets all my entry criteria, will be watching this closely on Monday open