Stan Weinstein's Stage Analysis

This is a discussion on Stan Weinstein's Stage Analysis within the Technical Analysis forums, part of the Methods category; Stan Weinstein has done another interview on the Financial Sense Newshour over the weekend. Here's the link to the recording: ...

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Old May 6, 2013, 5:36pm   #961
 
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Stan Weinstein Interview

isatrader started this thread Stan Weinstein has done another interview on the Financial Sense Newshour over the weekend. Here's the link to the recording:

Technician Stan Weinstein: Still A Bullish Outlook For Stocks Also, Chris Puplava with a Macro look at the second half, Erik Townsend on Commodities, and Rob Bernard on Fixed Income | James J Puplava CFP | FINANCIAL SENSE
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Old May 8, 2013, 4:27pm   #962
 
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Re: Stan Weinstein's Stage Analysis

isatrader started this thread Here's a link to a mini Q&A email I did with Stan on a range of questions about the method that people have asked on here and on the Stage Analysis boards: Stan Weinstein Q&A
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Old May 19, 2013, 5:17pm   #963
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Re: Stan Weinstein's Stage Analysis

Hi, isatrader,

great thread. I am a big fan of Sam Weinstein's stage analysis after reading his book, 'Secrets for Profiting in Bull and Bear Markets'. It seems like quite a long thread so need to get reading to catch up

I'm quite junior in the investing/trading space, having been doing it for the last four years, so trying to get my trading system set up currently.

Do you have a chart showing the current state of stage analysis for the S&P 500 and Russell 2000?

Thanks
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Old May 19, 2013, 11:15pm   #964
 
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Re: Stan Weinstein's Stage Analysis

isatrader started this thread
Quote:
Originally Posted by Tryst View Post
Hi, isatrader,

great thread. I am a big fan of Stan Weinstein's stage analysis after reading his book, 'Secrets for Profiting in Bull and Bear Markets'. It seems like quite a long thread so need to get reading to catch up

I'm quite junior in the investing/trading space, having been doing it for the last four years, so trying to get my trading system set up currently.

Do you have a chart showing the current state of stage analysis for the S&P 500 and Russell 2000?

Thanks
The thread was getting too big on here and so has moved to the StageAnalysis forum, where it is now multiple threads to make it easier to find the information.
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Old May 19, 2013, 11:39pm   #965
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Re: Stan Weinstein's Stage Analysis

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Originally Posted by isatrader View Post
The thread was getting too big on here and so has moved to the StageAnalysis forum, where it is now multiple threads to make it easier to find the information.
no worries, isatrader. I've just registered over at your stageanalysis website.

Thanks
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Old May 28, 2013, 1:40pm   #966
 
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Re: Stan Weinstein's Stage Analysis

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Originally Posted by isatrader View Post
The thread was getting too big on here and so has moved to the StageAnalysis forum, where it is now multiple threads to make it easier to find the information.
Hello,

Struggling to find the new thread..can you post the link pls?

Very interesting thread....im just looking at Weinsteins technique and it seems like it could be quite effective
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Old May 28, 2013, 1:44pm   #967
 
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Re: Stan Weinstein's Stage Analysis

isatrader started this thread
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Originally Posted by Chazza View Post
Hello,

Struggling to find the new thread..can you post the link pls?

Very interesting thread....im just looking at Weinsteins technique and it seems like it could be quite effective
You can find it via the second post on this page through the link to the Stan Weinstein Q&A - post #962, or just Google Stage Analysis forum and you will find it.
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Old May 28, 2013, 4:24pm   #968
 
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FAQ: How to create the Mansfield Relative Strength Indicator

isatrader started this thread One of the core components of Stan Weinstein's method is the use of Relative Performance compared to an index such as the S&P 500, to a sector or to another stock. Which was referred to in his book as Relative Strength.

However, this should not to be confused with the popular RSI (Relative Strength Index developed J. Welles Wilder), which is a momentum oscillator that measures the speed and change of price movements on a single stock. And so, to avoid any confusion when talking about the kind of Relative Strength we are interested in, I've renamed to be "Relative Performance".

Weinstein defines it as the following on page 18 of the book:

Quote:
"How a given stock (or group) acts in relation to the overall market. For instance, if stock XYZ rallies 10 percent while the market moves ahead 20 percent, that's poor relative strength even though the stock has advanced. On the other hand, if stock XYZ declines 10 percent while the market averages decline 20 percent, that's favorable relative strength even though the stock has moved lower. The formula for measuring relative strength is simply the price of a stock ( or group average) divided by the price of a market average."
Relative Performance Indicators

On here I have two ways of representing the Relative Performance on a chart. The first version I show is the representation that people are used to from the book (#1 on the below chart) which is the Mansfield Relative Strength Indicator. The second version that I show immediately below (#2 on the below chart) is the standard relative performance line that you get if you divide the closing price of the stock by the index that you want to reference, which in the majority of cases will be the S&P 500 Index unless otherwise stated.

So as you can see, these two indicators are identical, however, they show the Relative Performance data in slightly different ways, which I personally find useful to see. For example, the "zero line" on the Mansfield version is a flattened 52 week moving average which shows the data more like an oscillator and so is easier to see when it reaches extremes. However, on the standard relative performance line the slope of the 52 week moving average (zero line) can be seen, which can give further clues to the relative performance of the stock versus the index on a longer term basis.

Below is a weekly chart of Apple (AAPL) showing the two versions of the Relative Performance Indicator versus the S&P 500 Index.

Click the image to open in full size.

Standard Relative Performance indicator

The formula for calculating standard relative performance indicator is quite simple:

Code:
RP = ( stock_close / index_close ) * 100
And then a 52 week moving average is added to the indicator to show the zero line.

So the longer version is:

Standard Relative Performance = (today's close of the stock divided by today's close of the index) * 100


Mansfield Relative Performance indicator

The formula of this indicator is a bit more difficult than the regular Standard Relative Performance indicator:

Code:
MRP = (( RP(today) / sma(RP(today), n)) - 1 ) * 100
Where:
RP = Standard Relative Performance indicator (see above)
SMA = Simple moving average over n days.
n = 52 for weekly charts, and n = 200 on daily charts

So to make it a bit clearer:

Mansfield Relative Performance = (( Today's Standard Relative Performance divided by Today's Standard Relative Performance 52 Week Moving Average )) - 1) * 100

I hope the above calculations all make sense, but if you need further assistance then chartmill.com did a good article on it which you can find here: ChartMill.Com | Articles on Technical Analysis Indicators and Screeners
Attached Thumbnails
mansfield-relative-strength-ex.png  
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