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+--- Thread: Stage Analysis Beginners Questions (/Thread-Stage-Analysis-Beginners-Questions)
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RE: Beginners Questions - pcabc - 2015-01-27
(2015-01-26, 10:56 PM)isatrader Wrote: Firstly well done...
Unfortunately there's no easy answer, as at the end of the day it comes down to a judgement call. But it's a good problem to have at least...
Thanks. Like you say, a good problem to have. Ended up setting 1/2 my position for a stop loss at 327 and the other half (approx) at 338. The first is 10 day moving average and the second resistance from the last few days. Even using a 10 day moving average for a stop loss gives a 16% loss. Quite tight but a little breathing room.
Java problems stopped Prorealtime running.
I had a tiny position in FRR.L before Christmas in which I saw a near 100% gain turn into a loss. Thing is I strong suspected that would happen but did nothing. Don't want to repeat. Here's hoping this one still has legs. Volume says yes. :-)
RE: Beginners Questions - terces - 2015-02-07
First a simple format question. Is it possible to see the newest posts at the top of the first page - ie page 1 and the older posts on page 64 or whatever?
RE: Beginners Questions - isatrader - 2015-02-07
(2015-02-07, 08:40 PM)terces Wrote: First a simple format question. Is it possible to see the newest posts at the top of the first page - ie page 1 and the older posts on page 64 or whatever?
No, the posts run in time order, and the forum software doesn't allow for reordering I believe. So the newest post is always the last post in the thread. But it's easy to get to the last post in one click from the board you are looking at, as all you need to do is click on the View the Last Post link on the right hand side in the board you are looking at. See attached screenshot with it highlighted in red.
RE: Beginners Questions - terces - 2015-02-07
Now a more technical question. It appears the focus or favored position of this site, as of the present moment, is taking long positions, many of them on continuation patterns.
The market is showing many signs of topping, with fewer and fewer issues registering new highs. It seems to me that the market overall is moving into a Stage 3 top, with larger stocks being less advanced and others being more advanced. Case in point, the Russel Micro Caps IWC has been in a possible Stage 3 topping process for almost a year. The Russel Mid Caps IWM have been leveling out for the same time.
As Stan says, it takes a huge amount of effort to move a stock up, but it can fall of its own weight, I am wondering why there is not more focus on finding breakdowns?
I have been swayed by a strong contrarian opinion, so may be missing the point here, but it seems taking the short side is a safer move with the market, and that playing the long side is getting dangerous.
What am I missing here?
RE: Beginners Questions - isatrader - 2015-02-07
I'm out and about at the moment, so I'll be able to give you a full reply to this a bit later on. For now I'd recommend looking at the latest market breadth charts that I posted earlier today in the Elite Board Market Breadth Extra thread here: http://stageanalysis.net/forum/showthread.php?tid=39&page=64 to see the current Weight of Evidence from the Market Breadth charts.
RE: Beginners Questions - isatrader - 2015-02-08
(2015-02-07, 08:50 PM)terces Wrote: Now a more technical question. It appears the focus or favored position of this site, as of the present moment, is taking long positions, many of them on continuation patterns.
My personal focus is on the long side of the market as I only buy stocks using the investor method in my personal pension account, and so can't do any shorting in that account. This will be reflected to a certain degree in my posts on here as I spend a lot more time looking at potential long positions, however, when the market breadth gauges signal a deterioration in the market such as in late March 2014 and then again in September 2014 you'll see that I focus more on the short side of the market with my posts. For example, see my posts in the US Stocks - Watchlist and Discussion (Premium) thread from those periods, as the short watchlist got the majority of attention.
(2015-02-07, 08:50 PM)terces Wrote: The market is showing many signs of topping, with fewer and fewer issues registering new highs.
The cumulative new highs - new lows breadth charts that I post each week don't agree with this imo, as the cumulative line broke down significantly in October for the first time in multiple years, but it has since recovered and is this week attempting to make new highs once more. I can also see a large divergence on the 5 day New Highs - New Lows chart which shows the October flush in the market, and weakening corrections since then, with the January correction not making it below the zero line.
(2015-02-07, 08:50 PM)terces Wrote: The market is showing many signs of topping, with fewer and fewer issues registering new highs. It seems to me that the market overall is moving into a Stage 3 top, with larger stocks being less advanced and others being more advanced. Case in point, the Russel Micro Caps IWC has been in a possible Stage 3 topping process for almost a year. The Russel Mid Caps IWM have been leveling out for the same time.
As Stan says, it takes a huge amount of effort to move a stock up, but it can fall of its own weight, I am wondering why there is not more focus on finding breakdowns?
I have been swayed by a strong contrarian opinion, so may be missing the point here, but it seems taking the short side is a safer move with the market, and that playing the long side is getting dangerous.
What am I missing here?
You are correct in that the market has shown many signs of topping over the last year, with significant weakness early in 2014 in the Nasdaq momentum stocks, some of which had significant Stage 4 breakdowns of 50% or more during the April correction, and also in the small caps which formed a Stage 3 top over the first part of 2014 and then broke down into Stage 4A in late September, which also saw the other larger cap stocks move into Stage 3 at the same time. However, the September and October correction saw some of the key breadth gauges that I follow move into the lower levels in both the NYSE market and the Nasdaq markets, which they hadn't reached since the 2011 Stage 4 breakdown. And so during that period the market had an under the surface move into Stage 4 with only around 20% of stocks in the entire US market above their 150 day MA (roughly 30 week MA equivalent) - see below $NYSE and $COMPQ charts.
However, the snap back rally was very strong as people stepped into buy stocks at huge discounts in some cases. And this saw those levels move back to mid range again where it has lingered for the last three months. Currently for example the NYSE market percentage of stocks above their 150 day MA is at 55.64%, and the Nasdaq market percentage of stocks above their 150 day MA is at 52.47%. Both of which are now challenging the top of their recent ranges and the NYSE breadth % did actually move back to a bullish position this week.
You also mentioned the small caps leveling out for over a year and forming a Stage 3 top. However, the Stage 3 top was completed and they did breakdown into Stage 4A in late September/early October, but the breakdown was quickly reversed and it recovered back above it's 30 week MA and has has stayed above it since, and even moved to new highs in a fresh Stage 2 continuation attempt at the 2014 year end. Which was reversed in the January correction, but it held above the 30 week MA throughout and this week moved back toward new highs once more, with the mid caps actually making new highs. And so the small and mid cap indexes are attempting Stage 2 continuation moves. While the large caps are now lagging and still showing signs of Stage 3. So it's a very mixed market currently, but small cap leadership would be very important factor for the market to have a new Stage 2 advance. And while the indexes might have only shown a Stage 3 consolidation pattern over the last year, there have been individual charts that have had huge Stage 4 declines. So I guess my point is don't focus on the indexes too much, which are only averages of the stocks in them. Instead look at the individual charts Stages and the weight of evidence from the market breadth gauges, as they show that except for the large caps, a large amount of the US stocks in 2014 had heavy Stage 4 breakdowns. Which imo, with the stocks making New Highs and the amount of Stage 2 continuation breakouts expanding means that we may have seen enough of a flush out for the market to have a chance of a new leg higher. Which imo is the contrarian opinion currently, as everyone thinks the sky is about to fall (which it might of course). But what if it already did, and the media just didn't notice as they only focus on the S&P 500 large caps.
This is all of course just my personal opinion of the data I use, and I could be wrong. But you'll find that I rarely give my opinion on here, as I like to present the data in as unbiased a way as possible. So I tend to post the stock and breadth charts without opinion and only highlight positives or negatives that I can see when they give clear signals, and let the members interpret the weight of evidence for themselves.
I'd really recommend the Market Breadth Extra thread in the Elite section, as I try to post the key breadth gauges important for the Weight of Evidence. As this imo is the key to determining the market Stages and not the indexes themselves, which lag and only give you signals after the leading stocks that we are trying to trade have broken out or broken down.
Another important thread in the Elite section is the Daily P&F Breakouts and Breakdowns in the US Market thread, which gives the complete list of P&F breakouts and breakdowns each day with a market cap of £50million or greater. Personally I've come to find this thread invaluable for short term timing purposes, as generally there are more breakouts than breakdowns each day, so it's very noticeable when the amount of breakdowns pick up, especially when they are in the hundreds, and so I find it a really good leading indicator of whats going on under the surface of the market. And is another market breadth tool for our weight of evidence.
Anyway, sorry for the long reply. And again this is all just my opinion. So look through the market breadth charts and the P&F breakouts and breakdowns threads for yourself, and if shorting is what you are interested in currently due to your market view, then please post any potential Stage 4 breakdowns or interesting stocks in Stage 3 that you find, as the idea of the Stage Analysis boards is for members to post the most interesting charts that they find in the watchlists, so that we get a more complete and hopefully unbiased view of the market from the variety of our members posts. And as I said at the start of this monster post, my focus is on the long side, due to me using the investor method in my personal pension account, and so I do post more Stage 1 & 2 charts. But I do shift more to the short side with my posts when the breadth data warrants it.
I hope that helps
Cheers
RE: Beginners Questions - JimStudent - 2015-02-08
[quote='isatrader' pid='6709' dateline='1423357526']
"Currently for example the NYSE market percentage of stocks above their 150 day MA is at 55.64%, and the Nasdaq market percentage of stocks above their 150 day MA is at 52.47%. Both of which are now challenging the top of their recent ranges "
Hi Isatrader, something that I have been wondering about the 150 day MA. I believe Stan Weinstein said something like the 150 day MA is about 75 to 80% in step with his stage analysis. If that is the case, is it possible that the 150 day MA is 25 to 30% higher when the stock market hits a stage 3 top. A stock can be over it's 150 day MA and have a flat 150 day MA. Weinstein's stage analysis would put a stock with a flat 150 day MA in stage 3. Stan Weintein's stage analysis judges stocks healthy that are in a stage 1 and 2 only. That would put a total different spin on 150 day MA when the market is topping out.
Just a thought .
RE: Beginners Questions - isatrader - 2015-02-08
(2015-02-08, 06:42 AM)JimStudent Wrote: Hi Isatrader, something that I have been wondering about the 150 day MA. I believe Stan Weinstein said something like the 150 day MA is about 75 to 80% in step with his stage analysis. If that is the case, is it possible that the 150 day MA is 25 to 30% higher when the stock market hits a stage 3 top. A stock can be over it's 150 day MA and have a flat 150 day MA. Weinstein's stage analysis would put a stock with a flat 150 day MA in stage 3. Stan Weinstein's stage analysis judges stocks healthy that are in a stage 1 and 2 only. That would put a total different spin on 150 day MA when the market is topping out.
Just a thought .
Yes, that's right, Weinstein's Proprietary Stages Survey only shows stocks in Stages 1 & 2, and is why the Percentage of Stocks above their 150 day MA (30 Week MA) is only considered to be 75 to 80% accurate in matching it. As stocks in Stage 3 fluctuate above and below their 150 day MA, and hence when they are above it, the Percentage of Stocks above their 150 day MA figure would be stronger than Weinstein's Stages Survey would be. However, as you know, the point of the "Weight of Evidence" approach is not to use one single market breadth indicator in isolation, and so while the Percentage of Stocks above their 150 day MA might be one of the key market breadth measures in our toolbox, it is only one of many when determining the strength of the market. As the other breadth measures also have an equal vote in the "Weight of Evidence" approach and give you clues as to what is going on. So for example, the Bullish Percent Index, the Advance Decline Line, the New Highs - News Lows, the P&F breakouts - breakdowns, the sector breadth etc. For example your point about the Percentage of Stocks above their 150 day MA not showing all the stocks in Stage 3, as some will be above their 150 day MA still. The New Highs - New Lows can be very helpful with this difference, as a stock above it's 150 day MA, but still in Stage 3 would not be making new 52 week highs, and so you'd see a weakening in the New Highs - News Lows, as well as the other breadth measures also.
The US market is certainly in Stage 3 currently, but which way it resolves is not a definite outcome, as Stage 3 doesn't automatically mean the next Stage will be a Stage 4 breakdown, as often it is just a long period of consolidation and rotation within the market that then resolves in a Stage 2 continuation. So which way we go currently is uncertain, as the market breadth Weight of Evidence is in a fairly neutral position overall. So I will continue to look for improvement or deterioration to give further clues as to which way we will go.