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; I thought it would be good to focus on gold today after it's steep two day fall. I've marked up ...

Reply
 
LinkBack Thread Tools Search this Thread
Old Sep 24, 2011, 1:22am   #11
 
isatrader's Avatar
Joined Oct 2010
Gold stages

isatrader started this thread I thought it would be good to focus on gold today after it's steep two day fall. I've marked up the daily, weekly and monthly chart to try and get a bigger picture look at the move.

On the daily chart it looks brutal and the stage 3 head and shoulders pattern has broken down violently into stage 4. The sell off appears to involve liquidation selling, so it might not get the usual pullback before dropping further.The swing rule gives me a measured price target of 1585 for this move down on the daily chart.

The weekly chart is interesting as price has pulled back to the 30 week moving average, which is the seventh major pullback since the start of the weekly stage 2 gold bull run in January 2009. So will it manage to bounce here again? I think it could, as the 30 week MA is still moving higher at the moment although it has flattened a little this week, but it's still in stage 2 at the moment I think.

Gold has had an amazing stage 2 run on the monthly chart for almost 10 years. It broke out into stage 2 in February 2002 and the 30 week MA only only broke down once in 2008 before turning positive again and continuing higher. The price has been this extended from the 30 week MA twice before in 2006 and 2008 and both led to a year or so of consolidation. Could this be what is starting again now?

Gold is a great example of how the method can work on multiple time frames and I intend to explore this further on intraday charts as well.

Attached is the charts
Attached Thumbnails
gold_daily_23_9_11.png   gold_weekly_23_9_11.png   gold_monthly_23_9_11.png  

__________________
isatrader

Fate does not always let you fix the tuition fee. She delivers the educational wallop and presents her own bill – Reminiscences of a Stock Operator.
isatrader is offline   Reply With Quote
Old Oct 4, 2011, 8:06am   #12
Joined Aug 2011
Re: Stan Weinstein's Stage Analysis

Quote:
Originally Posted by isatrader View Post
I'm starting this thread for a place for people to discuss Stan Weinstein's method of stage analysis.

I read his book Secrets for Profiting in Bull and Bear Markets from 1988 earlier this year and was very impressed with his four stage breakout method. For those that haven't read the book there's an article in the T2W archives from 2006 that's a good starting point. Here's the link

Articles - Markets - Equities - Stage Analysis - finding the 'breakout' shares | Trade2Win

I'd be interested to see how other people apply his methods and get a discussion going on the markets and individual stocks using his stage analysis method.
Hi,

I am in the same situation here. I just read the book and now i am getting prepared to make some analysis before i will invest the money.
I am going to keep looking at this post and i will try to also give a feedback. What are the markets do you prefer for your analysis ?

Last edited by vali83; Oct 4, 2011 at 8:19am.
vali83 is offline   Reply With Quote
Old Oct 4, 2011, 12:16pm   #13
 
isatrader's Avatar
Joined Oct 2010
Re: Stan Weinstein's Stage Analysis

isatrader started this thread
Quote:
Originally Posted by vali83 View Post
I am in the same situation here. I just read the book and now i am getting prepared to make some analysis before i will invest the money.
I am going to keep looking at this post and i will try to also give a feedback. What are the markets do you prefer for your analysis ?
Thanks vali83. I look at stocks and commodities mainly for my analysis as it seems to work the best for these. I'm going to focus on Stocks from the FTSE 350, S&P 500 and Nasdaq 100 and Commodities like precious metals, base metals and some of the softs like coffee, soybeans and sugar etc.
__________________
isatrader

Fate does not always let you fix the tuition fee. She delivers the educational wallop and presents her own bill – Reminiscences of a Stock Operator.
isatrader is offline   Reply With Quote
Old Oct 4, 2011, 12:59pm   #14
 
isatrader's Avatar
Joined Oct 2010
Buying Reference

isatrader started this thread I wrote the buying guide from the "refining the buying process" section in my journal, but thought it would be useful to post here as well, as it is the checklist of what the book says to look for when buying:

Buying Reference
  1. What is the major trend of the market overall
  2. What groups/sectors look the best technically
  3. Create a watch list of the stocks from the sectors identified that have bullish patterns but are currently in a trading range. Make a note of the breakout price level of each.
  4. Narrow the list by discarding the stocks/commodities that have overhead resistance nearby.
  5. Narrow the list further by discarding the ones with the worst relative performance versus the general market (I use the latest major low in the S&P 500 as my baseline for this).
  6. Put buy-stop orders on for half the position on the few stocks/commodities that meet the buying criteria.
  7. If volume looks promising on the breakout and then contracts on the pullback towards the initial breakout level, then buy the remaining half of the position.
  8. If volume doesn't increase enough on the breakout then sell on the first rally. If it doesn't manage to rally and falls back below the breakout point then dump it immediately.
__________________
isatrader

Fate does not always let you fix the tuition fee. She delivers the educational wallop and presents her own bill – Reminiscences of a Stock Operator.
isatrader is offline   Reply With Quote
Old Oct 4, 2011, 1:25pm   #15
 
Pat494's Avatar
Joined Mar 2004
Re: Stan Weinstein's Stage Analysis

good thread

keep going

__________________
Failure is not an option
Pat494 is offline   Reply With Quote
Old Oct 5, 2011, 1:30pm   #16
Joined Aug 2011
Re: Stan Weinstein's Stage Analysis

Quote:
Originally Posted by isatrader View Post
Thanks vali83. I look at stocks and commodities mainly for my analysis as it seems to work the best for these. I'm going to focus on Stocks from the FTSE 350, S&P 500 and Nasdaq 100 and Commodities like precious metals, base metals and some of the softs like coffee, soybeans and sugar etc.
i see you are using a nice tool. Can you tell which one is it?
Untill now i've been using Freestockcharts.com and stockcharts.com, but from the images you posted i might like your tool better

Thanks
vali83 is offline   Reply With Quote
Old Oct 5, 2011, 1:36pm   #17
 
isatrader's Avatar
Joined Oct 2010
Re: Stan Weinstein's Stage Analysis

isatrader started this thread
Quote:
Originally Posted by vali83 View Post
i see you are using a nice tool. Can you tell which one is it?
Untill now i've been using Freestockcharts.com and stockcharts.com, but from the images you posted i might like your tool better

Thanks
It's a paid for end of day software program called ProTA Gold for the Apple Mac. I like it, but you have to import your data etc, which obviously you don't have to on the free charts services. Here's the link: ProTA: Mac OS X Stock Market Charting and Technical Analysis Software
__________________
isatrader

Fate does not always let you fix the tuition fee. She delivers the educational wallop and presents her own bill – Reminiscences of a Stock Operator.
isatrader is offline   Reply With Quote
Old Oct 5, 2011, 9:23pm   #18
 
isatrader's Avatar
Joined Oct 2010
Gold Analysis follow-up

isatrader started this thread I previously looked at gold on the 24th September on the thread. Here's the link: previous Gold post 24th Sept

The stage 2 bull run is still intact currently, as even though the sell-off was extreme, it has so far managed to bounce around the 30 week MA as it has done before in the last two years. The moving average is still rising, but I think it’s too soon to raise the stop loss from the previous low below 1500 on the weekly chart.

On the daily chart the measured move price target of 1585 was reached, but gold is in stage 4 on the daily chart, so for me there is nothing to do as yet, as the goal is to buy in early stage 2 which looks a while away at the moment.

Relative strength vs the S&P 500 is fairly flat.

Daily volume is very negative still, and weekly volume has pulled below the moving average.

Below is the updated chart.
Attached Thumbnails
gold_stages_5_10_11.png  
__________________
isatrader

Fate does not always let you fix the tuition fee. She delivers the educational wallop and presents her own bill – Reminiscences of a Stock Operator.
isatrader is offline   Reply With Quote
Old Oct 7, 2011, 3:30pm   #19
 
isatrader's Avatar
Joined Oct 2010
Stage Analysis

isatrader started this thread I've been looking in-depth at the Global Trend Alert newsletter from March 2005 that I attached in post 2 on the thread here: http://www.trade2win.com/boards/tech...ml#post1675626

I think this gives an important update to the book, as the book was written 23 years ago and he's clearly refined the system a little bit since then. For example, the four stages now have extra definitions with A, B, + and - symbols. So you now have a Stage 2B, and if the technical pattern is outstanding it is labelled 2B+

Here's the definitions of the stages from the newsletter

Stage 1A - Start of a base. Needs much more time.
Stage 1 - Basing Phase. May begin accumulation.
Stage 1B - Late in base-building phase.Watch for breakout.

Stage 2A - Early in uptrend stage. Ideal time to buy aggressively.
Stage 2 - Advancing Stage
Stage 2B - Getting late in uptrend. Watch carefully. But still a hold.

Stage 3A - Looks as if a top is starting to form. Be sure to protect holdings with a close stop.
Stage 3 - The Top Area. Start to reduce positions.
Stage 3B - Has become increasingly toppy. Use rallies for at least partial selling.

Stage 4A - Stock has entered Downtrend Stage. Close out remaining positions.
Stage 4 - The Declining Stage. Avoid on the long side.
Stage 4B - Late in downtrend. Much too soon to consider buying.

Additional ratings
(A) Early in that Stage.
(B) Late in that Stage.
(+) Outstanding pattern in that Stage.
(–) Unexciting pattern in that Stage.

Below is the simple diagram from the newsletter to give the descriptions above some context.
Attached Thumbnails
stages.png  
__________________
isatrader

Fate does not always let you fix the tuition fee. She delivers the educational wallop and presents her own bill – Reminiscences of a Stock Operator.
isatrader is offline   Reply With Quote
Old Oct 7, 2011, 3:43pm   #20
 
isatrader's Avatar
Joined Oct 2010
Re: Stan Weinstein's Stage Analysis

isatrader started this thread Another thing that I think is really useful about the Global Trend Alert newsletter pdf, is that it has all the S&P 500 stocks marked up with their stages from the 25th February 2005. I think this is great as you can go back in your own charting package to that date and get a much better idea of the various stages and hence become better at identifying them. As the charts in the book were very small and the print quality wasn't great. So I think this will really help my understanding of the stages.

On that date the Stage Ratings Overview had the following:

Stage 1 - 8%
Stage 2 - 58%
Stage 3 - 18%
Stage 4 - 16%

So you should have around 40 examples of Stage 1, 290 examples of Stage 2, 90 examples of Stage 3, and 80 examples of Stage 4 to look at. I plan to create a spreadsheet and go through them one by one to create my own reference guide so that I can use them to identify my charts in the future.
__________________
isatrader

Fate does not always let you fix the tuition fee. She delivers the educational wallop and presents her own bill – Reminiscences of a Stock Operator.
isatrader is offline   Reply With Quote
Reply

Thread Tools Search this Thread
Search this Thread:

Advanced Search

Similar Threads
Thread Thread Starter Forum Replies Last Post
Article: Stage Analysis - finding the 'breakout' shares T2W Bot Educational Resources 9 Apr 19, 2013 9:09am
Market Analysis From A Traders Eye As Earnings Take Center Stage InTheMoneyStocks General Trading Chat 0 Apr 13, 2010 6:04pm
Stan Weinstein: secrets for profiting in bull and bear markets expensif Educational Resources 10 May 29, 2006 2:14pm
HSBA and STAN Anil Technical Analysis 1 Jan 25, 2001 10:23am

Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)