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; Attached is the updated major charts I follow. The S&P 500 held the trendline breakout from last week, however, the ...

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Old Jan 28, 2012, 8:24pm   #241
 
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Re: Stan Weinstein's Stage Analysis

isatrader started this thread Attached is the updated major charts I follow. The S&P 500 held the trendline breakout from last week, however, the price action on the weekly bar shows indecision as to the next move. I've got the Stage as Stage 1B currently, so I think it could have another pullback to value before trying to reach Stage 2A like the Nasdaq 100 has already done. The 10 year Treasuries chart is interesting this week as it closed within a fraction of the previous high after a very strong week and looks poised to break out into a Stage 2 continuation this coming week. Which due to it's inverse relationship with equities, would quite likely cause equities to correct. So an interesting week ahead I think.
Attached Thumbnails
spx_weekly_27_1_12.png   gc_weekly_27_1_12.png   hg_weekly_27_1_12.png  

cl_weekly_27_1_12.png   us30_treasuries_27_1_12.png   ty_10yr_treasuries_27_1_12.png  

dx_weekly_27_1_12.png  
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Old Jan 29, 2012, 12:31am   #242
 
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US Industry Sectors

isatrader started this thread Below is the latest US Industry Sector charts. Percentage wise Basic Materials is leading the pack, but it's Mansfield RS is still below the zero line, but has been recovering nicely with the 30 week WMA rising again and the chart is now in Stage 1 and hitting the first major resistance level. Technology and Consumer Discretionary made an attempt at a Stage 2 breakout during the week, but both couldn't close above the breakout level, so I'm still classing them Stage 1B until they do.
Attached Thumbnails
industry_sectors_27_1_12.png   industry_sectors_table_27_1_12.png  
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Old Jan 29, 2012, 2:41pm   #243
 
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Re: Stan Weinstein's Stage Analysis

isatrader started this thread I'm fully invested in my portfolio for the investor method trades now. But I'm considering one or two changes to bring in some more risk assets to the mix, but after that my aim is to try and hold the trades until they are stopped out, hopefully after many months of a Stage 2 uptrend. But we'll see what time brings and I'll adjust my stops accordingly as per the method at each continuation pivotal point.

So I've been thinking a lot about where to go from here and have decided that in order to stop me tinkering with the investor positions and taking profits too soon, I need to keep myself actively involved in a different way. For which I've decided that it's a good time for me to start looking at the shorter term trader method from the book, as this will help me develop my knowledge of the stages further and it is also the right time to start preparing as the market is getting closer to a new Stage 2 phase, so I need to be ready to start buying stocks etc making new initial Stage 2 breakouts or Stage 2 continuation moves.

I'm going to spend some time refreshing my memory of the trader method from the book as I've mostly focused on the investor method for the last six months. So I need some time to change my mindset to a more active way of trading again and lay down a plan of action. I think I might start a separate journal for it as I don't want to clog up the discussion thread, as I want to keep this thread for looking at the broader picture and talking about the method.
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Old Feb 5, 2012, 1:10am   #244
 
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US Industry Sectors

isatrader started this thread With this weeks strong move in the S&P 500, two more sectors Technology (XLK) and Consumer Discretionary (XLY) managed to breakout out to new highs and reach Stage 2 again. This is a positive sign and the remaining sectors in Stage 1 are making good moves higher, but still have some resistance to work through before they can reach Stage 2 status themselves.
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industry_sectors_3_2_12.png  
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Old Feb 5, 2012, 1:47am   #245
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Re: Stan Weinstein's Stage Analysis

hi isatrader,

seems technology is a strong sector.
have you found any companies in this sector to look at?
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Old Feb 5, 2012, 2:02am   #246
 
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Re: Stan Weinstein's Stage Analysis

isatrader started this thread
Quote:
Originally Posted by incrediblefx View Post
hi isatrader,

seems technology is a strong sector.
have you found any companies in this sector to look at?
I took a hard look at the sector in January and thought that Apple was the best individual stock making a Stage 2 continuation move at the time. I noted the continuation move in AAPL on the 19th Jan (here's the link to the post: http://www.trade2win.com/boards/tech...ml#post1769334), but I choose to play the Nasdaq 100 index instead as I think the chart was showing that it has more upside potential than Apple in the medium term and it offered some diversification as is 100 stocks and not just one. Apples earnings then got it off to a flying start and my swing target of 499 that I mentioned looks possible, but the entry point has been missed if you didn't get in between then and the earnings. So leave that alone now as you always want to get as close to the ideal entry point as possible. The Nasdaq 100 however is not far above it's ideal entry point, so watch for a retest of the breakout level around 2440 as that would be a good lower risk entry point than currently imo, as the risk of a short term pullback is rising so we could see that very soon.
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Old Feb 5, 2012, 2:21am   #247
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Re: Stan Weinstein's Stage Analysis

Hi istrader,

thanks... I didnt know Nasdaq100 has broken to new high.
This is simply amazing.

I think financial sector is just breaking out from stage1. example Goldman sachs.
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Old Feb 5, 2012, 2:35am   #248
 
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Re: Stan Weinstein's Stage Analysis

isatrader started this thread
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Originally Posted by incrediblefx View Post
I think financial sector is just breaking out from stage1. example Goldman sachs.
I've personally got financials rated as a Stage 1A at the moment, so it's still a bit too early for Weinstein's method trades as it needs to work through a bit a bit more resistance first. That doesn't mean it can't do very well from here and it is moving into a better posture at least, so you can start looking through the stocks so you are ready to act at the right time. You want to look for stocks in the sector close to Stage 2 breakouts, with only minor resistance above and good relative performance versus the S&P 500. Make a note of the Stage 2 breakout levels of the best ones and maybe set an alert in your software to email you when they are hit. I then usually personally to wait for at least a daily close above the breakout level, but prefer a weekly close above the breakout level for extra confirmation it's not a fake move.
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Old Feb 5, 2012, 2:43am   #249
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Re: Stan Weinstein's Stage Analysis

Livermore only described buying at the breaking from stage1 to stage 2.
Where can I find the entry for stocks that has been on stage 2? I'm still searching this part.

And then how would you know whether the stage 2 will be exceptional winner.
I guess we must incorporate other strategy?
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Old Feb 5, 2012, 3:16am   #250
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Re: Stan Weinstein's Stage Analysis

I found AIG has broken out from Phase 1.
I may consider this.
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Old Feb 5, 2012, 3:54pm   #251
 
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Re: Stan Weinstein's Stage Analysis

isatrader started this thread
Quote:
Originally Posted by incrediblefx View Post
Livermore only described buying at the breaking from stage1 to stage 2.
Where can I find the entry for stocks that has been on stage 2? I'm still searching this part.

And then how would you know whether the stage 2 will be exceptional winner.
I guess we must incorporate other strategy?
Study chapters 3 & 4 in the book (page 58 onwards) and do the exercises at the end of each chapter to make sure you've understood what you've read.

The breakout point where it moves from Stage 1 to Stage 2 is the ideal time to buy for both investor positions and trading positions. The only difference is the position size as an investor will only put half their intended position size on at the breakout point and then complete the position allocation when the stock makes the first major retest to the breakout level. Whereas a trader will put the full position size on straight away as they are playing a much shorter term move.

A trader will then do additional buying of a stock at Stage 2 continuation breakout points. This is when the stock is in Stage 2 on the weekly chart and the 30 week MA is still rising strongly, but the stock has consolidated for a while, but then breaks out again above the small range it's formed.

As for knowing whether it will be an exceptional winner. This is can't be known in advance, you just have to make the best picks from your research and then watch the volume in the weeks following the breakout. As the exceptional winners will see a large amount of volume come in - see Silver futures (SI) last year following the breakout above $20 in September. The volume really picked up and stayed higher which drove the price up.

There's a lot to consider, but the key is to put in the work and research as much as you can so that you understand the method.
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Old Feb 5, 2012, 5:26pm   #252
 
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Re: Stan Weinstein's Stage Analysis

isatrader started this thread Attached is this weeks major charts for analysis. The S&P 500 survived it's minor pullback to the trendline breakout at 1300 and is now in Stage 2A by my reckoning and closed the week strongly near the high of the week.

Below are the charts
Attached Thumbnails
spx_weekly_3_2_12.png   ndx_weekly_3_2_12.png   gc_weekly_3_2_12.png  

hg_weekly_3_2_12.png   cl_weekly_3_2_12.png   us_30yr_treasuries_3_2_12.png  

ty_10yr_treasuries_3_2_12.png   dx_dollar_index_3_2_12.png   spx_pnf_3-2-12.png  

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Old Feb 6, 2012, 2:08am   #253
 
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Secondary Indicators

isatrader started this thread The secondary momentum indicators are still tracking the move higher with a slight positive divergence in the NYSE advance decline moving average on the weekly chart which has broken out to a new high, whereas price itself has yet to reach that level.

Price's distance above the 30 week weighted moving average is now 7.8%, previous times when it's been below -10% and then recovered above 5% for the first time in 2003 and 2009 saw it rise to 9.9% and 10.8% respectively. So that suggests it is near its normal upper channel limit, but it could have a few more percent in it yet before it needs a breather. But watch the price action always first as indicators are only secondary tools.

On another note if you are interested in other secondary indicators such as market breadth charts, I've been keeping a journal on BMT on which I update these regularly. Here's the link to the latest one: Trading breakouts with stage analysis - Trading Journals - Page 8
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Old Feb 6, 2012, 8:17am   #254
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Re: Stan Weinstein's Stage Analysis

Hi istrader,

thanks for your explanation. I will re-read again.
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Old Feb 11, 2012, 8:58pm   #255
 
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US Industry Sectors

isatrader started this thread Attached is the latest Weinstein style US Industry Sector charts. Technology is in a clear Stage 2 continuation by continuing it's run to new highs. Consumer Discretionary is the next strongest and managed to hold above the Stage 2 breakout level again this week although this weeks price action was similar to the broad market so I think it's still a Stage 2A. Consumer Staples also continues to hold onto to it's Stage 2A breakout level and has traded sideways for the last month, but as it's a more defensive sector a pullback in the broad index could spur it higher again.

Below is the charts for your own analysis
Attached Thumbnails
industry_sectors_10_2_12.png  
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