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RE: Stan Weinstein's Stage Analysis - BarnabeBear - 2018-07-21

Thanks Dejan for this weekly update (especially love it when delivered on saturdays)

A question for you: as you maintain a database for all equities in the US and you distinguish between large mid and small caps for the survey, do you also analyse the A/D lines and new 52WHL for the three subsets ?

I'm asking you because I cam across Lowry Research, a research company that's been around since 1938 and which basically concentrates on market breadth for their analysis (AD lines, 52WHL, % of stocks above 10, 50 and 200 DMA, as well as their own proprietary indicators [Buying Power and Selling Pressure]). And they maintain the A/D lines for the three subsets (Large, mid and small caps) as they seem to find virtue in doing so.

Anyways, keep up with the good work, what you do is splendid.

Best,
B

RE: Cumulative P&F Breakouts - Breakdowns custom Breadth charts - isatrader - 2018-07-21

Attached is my updated custom breadth charts that I do based on the daily point and figure double top and double bottom breakdowns.

                       

RE: Major US Stock Indexes Update - NYSE, Nasdaq, S&P 500, DJIA & S&P 600 small caps - isatrader - 2018-07-21

Here's the overview charts of the US Bullish Percent and Moving Average Breadth.

                   

RE: Major US Stock Indexes Update - NYSE, Nasdaq, S&P 500, DJIA & S&P 600 small caps - Red Barron - 2018-07-22

Were the Bullish Percent and moving average breadth indicators mentioned in the book?

RE: Major US Stock Indexes Update - NYSE, Nasdaq, S&P 500, DJIA & S&P 600 small caps - isatrader - 2018-07-22

(2018-07-22, 11:23 PM)Red Barron Wrote: Were the Bullish Percent and moving average breadth indicators mentioned in the book?

The NYSE Percentage of stocks above their 150 day moving average is used as a replacement for his proprietary NYSE Survey (seen on page 77) that is talked about in the book. And he mentions this in an interview on page 439 in the "Technically Speaking book" which an extract can be found on my previous t2w thread here:

http://www.trade2win.com/boards/technical-analysis/134944-stan-weinsteins-stage-analysis-48.html#post2037672

As I said on that thread in 2012: ''Weinstein says there is a definite correlation of roughly 75% to 80%, but believes his gauge is finer tuned for various reasons. But as we don't have access to his proprietary NYSE Survey, an 80% correlation is a good enough substitute, especially as he rates the two most important indicators as the NYSE Survey and the advance/decline line. So we can replace the NYSE Survey with the NYSE Percent of Stocks Above their 150 Day Moving Average breadth chart with a reasonable level of confidence."

That was my reply 6 years ago to someone else, and I've found the NYSE Percentage of stocks to be excellent over the years since personally for market timing. Especially using it in a multiple moving average fashion. i.e. the 50 day for short term, 150 day for medium term and 200 day for long term. When all three give the same signal from the various key positions defined by investors intelligence's work. Then it causes me to take notice and make adjustments. i.e. to be more defensive, or to go to cash, or to be more aggressive and get fully invested etc. Of course though, as per the Weight of Evidence approach, this isn't used in isolation, and advance decline, new highs, new lows and various other breadth measures are all considered as a whole before making changes to strategy. Although personally if I only had one breadth indicator that I was allowed to use, it would be the Percentage of stocks above their moving averages, above all the other breadth measures personally. But others may differ. The french forum seems to favour the advance decline line the most. Although I maybe wrong as the google translation doesn't work very well for me, so I find it hard to understand the conversations on there. As it clearly doesn't translate them properly.

RE: Stan Weinstein's Stage Analysis - BarnabeBear - 2018-07-23

Hi Isa,

Interesting views you are sharing.

As for the French forum, I can certainly give some flavor: Yes, the ADline is very much in favor there but I think it serves a slightly different purpose as the ADLine was bull's eyes for announcing major tops and subsequent crises, whereas my understanding is that the survey or its proxy can be used (as you do) for shorter term moves. Reading Weinstein's interviews it seems that anyway we are both in the right as his two preferred indicators are precisely the ADLine and his survey Wink and as you rightfully pointed out what matters is the analysis of all the indicators in conjunction with one another.

RE: Stan Weinstein's Stage Analysis - BarnabeBear - 2018-07-23

ps: while I'm at it there is something I wrote there that I meant to share here as well so I'll do my own translation (hopefully better than Google)

I wanted to talk to you about Lowry Research which I stumbled upon by chance after reading The Heretics of Finance where Paul Desmond is featured alongside Stan Weinstein. He's the head of Lowry Research and followed in te footsteps of its founder Lyman M. Lowry (1901-1991).
LMLowry put together a method after the 29 krach that developped into the founding of a research company in 1938.
The method is very much in line with Weinstein's hence my interest in it. Lowry's intention was to weigh the supply and demand for stocks as he considered that it was the primary driver of any market moves, well above any fundamental attempts to (post-)rationalize them. What he used and what the company still uses in their analyses today is mainly
- ADLine
- Volume ADLine (Lowry is reported as being the one who first proposed this now widely available indicator)
- Points ADLine (ie the sum of all dollars gained minus the summ of all dollars lost by all the stocks)
- 52w NewHighs/NewLows
- % Number of stocks above their various averages
- Three proprietary indicators: Selling Pressure, Buying Power and a shorter term BP which seem to be a synthetic indicator using the above measurements on various timeframes

When you visit their website (https://www.lowryresearch.com) you can have access to various white papers (latest available is "What if this time is different ?" with the conclusion that it is not...) and if you file for a trial period you even gain access to their weekly analysis (a 6/8 page report) and daily updates.


What thrilled me when I discovered this website is
1) we're are not alone in the universe using Breadth indicators and finding those VERY useful (cf SW's chapter 8)
2) they have a 80 years backlog of data which point to the validation of this methodology. The mere fact that they are up and running 80 years after the company was founded is a testimony to the effectiveness of the methodology they're using (who would pay a research company if the conclusions were garbage? By the way, in 2011, they claimed that 85% of subscribers were professional investors with 20% of them having subscribed for 25 years or more)
3) they love so much the ADLine concept that i) they use it everywhere (for issues, volume and points), ii) have created an Ooperating Company Only ADLine (which to me sounds VERY much like the CommonStocks version of the Nyse Composite available since 2003 from stockcharts) iii) break it down in big caps, mid caps and small caps (hence my previous question here to Dejan)

In their latest weekly note (Friday evening) they noted that their prop. Selling Pressure indicator was close to its lowest levels in 70 years and that the weight of evidence was clearly pointing in the direction of the continuation of an intact Bull market (although guarding against a potential short term correction which should be viewed as a buying opportunity window).

All-in-all very happy with discovering about Lowry Research Big Grin

If you want to dig further:
1. go to their website and request their white papers, a trial period and - why not - a full membership
2. read Mastering Market Timing - Using the Works of L.M. Lowry and R.D. Wyckoff to Identify Key Market Turning Points (Richard A. Dickson, Tracy L. Knudsen, CMT - two analysts from Lowry)
3. Grab a copy of a 1975 study (Wharton) aimed at analyzing Lowry's analyses validity (The Validity of Technical Analysis: A Study of Lowry's Reports, published December 30, 1975 - http://www.worldcat.org/title/validity-of-technical-stock-market-analysis-a-study-of-lowrys-reports-inc/oclc/701396319). Apparently the conclusion to this is “…this study indicated that extraordinary gains can be achieved by sophisticated technical analysis using weak form data. This is a violation of both the Efficient Markets and Random Walk Theories.”

ps: have you ever heard of them yourselves ?

RE: Stan Weinstein's Stage Analysis - grbaNT - 2018-07-23

(2018-07-21, 03:30 PM)BarnabeBear Wrote: Thanks Dejan for this weekly update (especially love it when delivered on saturdays)

A question for you: as you maintain a database for all equities in the US and you distinguish between large mid and small caps for the survey, do you also analyse the A/D lines and new 52WHL for the three subsets ?

I'm asking you because I cam across Lowry Research, a research company that's been around since 1938 and which basically concentrates on market breadth for their analysis (AD lines, 52WHL, % of stocks above 10, 50 and 200 DMA, as well as their own proprietary indicators [Buying Power and Selling Pressure]). And they maintain the A/D lines for the three subsets (Large, mid and small caps) as they seem to find virtue in doing so.

Anyways, keep up with the good work, what you do is splendid.

Best,
B

As for your question, I do not keep the market breadth data base of all equities traded on US stock markets but the data base of a sample (current size is 2287) of US traded stocks, same as SW does to produce the Survey. And as regards to AD lines, 52WHL,..., I would recommend to look at stockcharts.com. Most of the things you mentioned they do have there just play with their search engine and they are free EOD. Also, there is one other useful source where you can find many interesting market breadth related data http://www.indexindicators.com/, also free EOD. 

Thank you for constantly showing appreciation for what I do.  Smile Smile Smile

Best