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; Originally Posted by lplate isa, Crude shows a problem with Weinstein system on very well publicised instruments, I think, that ...

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Old Feb 19, 2012, 1:10pm   #271
 
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Re: Stan Weinstein's Stage Analysis

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Originally Posted by lplate View Post
isa, Crude shows a problem with Weinstein system on very well publicised instruments, I think, that when the world is very bullish on something, the chart looks too perfect, and money looks easy, there is suspicion of being suckered in. CLJ12 | Commodity Futures Price Chart for Crude Oil WTI April 2012
Assuming it (and USO) fully break next week, it does not have an "investor" feel to it, I think.

(P.S. USO is a weak CL tracker ETF, but is what many people will buy, rather than CL. United States Oil Fund LP, USO Advanced Chart - (NAR) USO, United States Oil Fund LP Stock Price - BigCharts.com )
Hi lplate, I'm a little confused as to why you think the crude chart is too perfect? As the Mansfield Relative Strength is negative, and volume is below average. Next resistance is last years high around $115 and it's outperformed the S&P 500 since the October low by around 6%. So I personally think for it to become Stage 2 that it needs to break up towards the $115 level, where it will meet resistance, pullback, and then breakout again above that short term high. Only then on that breakout will it be Stage 2 for me. It broke above the current Stage 1 range last week, so hence my change to Stage 1B. But it could be in the Stage 1B for a while and might never reach Stage 2. All you can do is trade the moves if they occur imo, and I certainly wouldn't use the USO as it has huge contango issues and tracks the price of crude very badly.
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Old Feb 19, 2012, 1:26pm   #272
 
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Re: Stan Weinstein's Stage Analysis

isatrader started this thread On another note, the purpose of me posting the major charts for analysis each week is not about looking for individual picks. But instead is meant to be looked at as a whole to build a picture on what the direction of the market will be. For example, the Treasuries and the Dollar index largely have a negative correlation with the Stock Indexes, whereas Copper, Crude and to a lesser extent Gold have a positive correlation. So by looking at all the charts and determining their stages I try to build up a picture of what the market stage is that you can't tell from an individual chart like the S&P 500 alone. As at times the other charts will give you warning signs before the Stock indexes do and vice versa.
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Old Feb 19, 2012, 9:11pm   #273
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Re: Stan Weinstein's Stage Analysis

isa Points taken. With the rising 30 week WMA, I mistakenly thought you regarded the breakout line to be not at 115 but at 103-104 (40 on USO), and that these will be hit next week. The volume will be in the April contract and in USO.
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Old Feb 19, 2012, 10:37pm   #274
 
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Re: Stan Weinstein's Stage Analysis

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isa Points taken. With the rising 30 week WMA, I mistakenly thought you regarded the breakout line to be not at 115 but at 103-104 (40 on USO), and that these will be hit next week. The volume will be in the April contract and in USO.
No worries lplate. The CL chart I show is the CL continuous futures contract, which is a combination of all the front month contracts joined together from the CME, which I manually copy and paste from their website each weekend. On options expiration each month the volume moves from the current months contract to the next months contract. So the continuous contract joins all the futures charts together giving a continuous picture of the volume that you don't get by just looking at the current contract.

The breakout point for Stage 2 won't necessarily be $115, as the price may form another short term high before reaching that level and pullback and then breakout again. So whatever that level is would determine the Stage 2 breakout level for me personally. However, I can see why you might think that a breakout above the current level is the Stage 2 breakout point and to be honest it could be, as it's made a couple of attempts to break up further since it broke above the 30 week WMA, which can be seen more clearly on the daily chart. But I'm a bit more conservative with my stage ratings when there's significant resistance to work through and it's a popular instrument like crude as there's a higher probability of false breakouts, so I like to be a bit more cautious personally.
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Old Feb 20, 2012, 3:50pm   #275
 
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Re: Stan Weinstein's Stage Analysis

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No worries lplate. The CL chart I show is the CL continuous futures contract, which is a combination of all the front month contracts joined together from the CME, which I manually copy and paste from their website each weekend. On options expiration each month the volume moves from the current months contract to the next months contract. So the continuous contract joins all the futures charts together giving a continuous picture of the volume that you don't get by just looking at the current contract.

The breakout point for Stage 2 won't necessarily be $115, as the price may form another short term high before reaching that level and pullback and then breakout again. So whatever that level is would determine the Stage 2 breakout level for me personally. However, I can see why you might think that a breakout above the current level is the Stage 2 breakout point and to be honest it could be, as it's made a couple of attempts to break up further since it broke above the 30 week WMA, which can be seen more clearly on the daily chart. But I'm a bit more conservative with my stage ratings when there's significant resistance to work through and it's a popular instrument like crude as there's a higher probability of false breakouts, so I like to be a bit more cautious personally.
Here is mi CL chart, i´m trying to look a bit like yours... so i can continue learning.

Click the image to open in full size.

The Perfomance % i didn´t know how to make it similar to yours, but the rest i think is quite similar.

The Blue Histogram is you Force Index.

The Green Lines is the Relative Perfomance with the Sp500.

The red Line in the chart is the WMA of 30 weekly, and the Yellow one is the 150 which i use a support and resistence in Daily charts.

Thanks.
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Old Feb 20, 2012, 5:10pm   #276
 
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Re: Stan Weinstein's Stage Analysis

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The Perfomance % i didn´t know how to make it similar to yours, but the rest i think is quite similar.
The Blue Histogram is you Force Index.
The Green Lines is the Relative Perfomance with the Sp500.
The red Line in the chart is the WMA of 30 weekly, and the Yellow one is the 150 which i use a support and resistence in Daily charts.
Thanks.
The Performance % I use is just the closing price shown as a percentage. As I find it gives a cleaner place on the chart to put the trend lines, calculate the measured move targets and keep the main weinstein chart nice and clean.

The force index I use to help interpret the volume information is my own customisation of it using the cumulative value instead of the normal calculation. I use a ten week cumulative summation and apply a 9 week simple moving average to it.
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Old Feb 20, 2012, 7:30pm   #277
 
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Re: Stan Weinstein's Stage Analysis

slightly off topic, but does anyone know how we can short sell as he mentions in his book in the uk. although i have no intention of doing it at the moment, as i believe we are at the wrong stage, i would like to know how to do it once the market takes a turn for the worse.
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Old Feb 20, 2012, 7:39pm   #278
 
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Re: Stan Weinstein's Stage Analysis

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slightly off topic, but does anyone know how we can short sell as he mentions in his book in the uk. although i have no intention of doing it at the moment, as i believe we are at the wrong stage, i would like to know how to do it once the market takes a turn for the worse.
Interactibe Brokers is specialist and is from UK, they are a losts ofothers brokers to get short in CFD...
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Old Feb 20, 2012, 8:32pm   #279
 
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Re: Stan Weinstein's Stage Analysis

thats wha i thought. does anybody here have any experience in cfd's?
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Old Feb 20, 2012, 8:56pm   #280
 
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Re: Stan Weinstein's Stage Analysis

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thats wha i thought. does anybody here have any experience in cfd's?
Ypu have to be a good trader ang big monet to try to win a lot of money, but you also have to be prepare to lose it. When they started i tried but it wasnt for me.... You have be in front of the screen and place well the stops.
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Old Feb 20, 2012, 9:49pm   #281
 
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Re: Stan Weinstein's Stage Analysis

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thats wha i thought. does anybody here have any experience in cfd's?
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Originally Posted by dinapoli View Post
Ypu have to be a good trader ang big monet to try to win a lot of money, but you also have to be prepare to lose it. When they started i tried but it wasnt for me.... You have be in front of the screen and place well the stops.
You do mostly need a lot of money to trade CFDs in the UK. But I trade them through CMC Markets which enable you to use fractional position sizes and fully adjustable leverage via their Tracker platform, so the cost is much lower than other CFD brokers and it's fully accessible to retail traders with limited capital as you can use very precise position sizing. Here's the link: Fractional CFD trading | CMC Markets. Give the demo a go so you can see if it's what you want.

Ok, lets get back on topic now please as I want to keep the thread focused on discussing Weinstein's method. Use private messages for any off topic stuff if you can please.
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Old Feb 21, 2012, 2:26am   #282
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Re: Stan Weinstein's Stage Analysis

istrader,

i see the nasdaq100 futures is hitting the resistance
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Old Feb 21, 2012, 11:21am   #283
 
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Re: Stan Weinstein's Stage Analysis

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i see the nasdaq100 futures is hitting the resistance
That's ok, as my position in the Nasdaq 100 is in my portfolio using Weinstein's investor method, whose aim is to capture the majority of a Stage 2 move and isn't exited until it either reaches my target or moves into at least Stage 3A. But should be fully exited at the Stage 4 breakdown. Which is a long way off yet imo, as we haven't even had the first pullback yet and possible continuation pivotal point which would give me the opportunity to move my stop up and possibly add to the position size on the continuation breakout. This might not happen and the first pullback might be more than just pullback, but then my stop loss would get me out.

Weinstein's investor method isn't about trying to pick tops or bottoms. It's about entering a trade at the Stage 2 breakout point and then sitting through the momentum part of the uptrend, gradually raising your stop below the 30 week moving average after each significant pullback so that you capture a large portion of the uptrend and are forced to exit at least part of your position by your stop loss when the Stage 2 phase ends.

For the Nasdaq 100 I have a measured move target of 2850, so following the method I could take partial profits at my target if it reaches it and then use the rising stop loss to exit the remaining position when it eventually gets hit as the Stage 2 phase ends.
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Old Feb 21, 2012, 12:49pm   #284
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Re: Stan Weinstein's Stage Analysis

Hi isatrader,

thanks and I love the way you follow Weinstein.
By the way could one leverge using Weinstein method? It seems risky, isn't it because of riding such a big wave.
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Old Feb 21, 2012, 4:30pm   #285
 
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Re: Stan Weinstein's Stage Analysis

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By the way could one leverge using Weinstein method? It seems risky, isn't it because of riding such a big wave.
Thanks incrediblefx, I think a sensible way that you can leverage using the method is to add to your position on continuation breakouts as that's the point where you raise your stop loss on the investor positions. You would however still need to be careful that the total position size (if it gaped past your stop loss) didn't exceed your maximum risk tolerance.

Another option, might be to hold a core position in a stock using the investor method and then trade a further position at the same time using the trader method, so trying to capture the smaller moves within the Stage 2 phase as well.
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