Stan Weinstein's Stage Analysis

Updating my previous post that showed Palladium was in a year long stage 3 formation. It has today broken down below the stage 3 channel. The 30 week moving average is also falling and relative strength vs the S&P 500 has turned negative. So I now consider it to be in the early part of stage 4 if I am interpreting Weinstein's method correctly.

I've used the spot data as it's more accurate and marked out the various stages on both the weekly and daily chart, which shows the stage 3 consolidation in more detail.

I think Stan Weinstein's Stage Analysis can be used on any instrument and I've been looking at currencies recently and the AUDUSD chart stood out to me as moving into a new stage 4 over the last few weeks. However, there is significant resistance in the 0.96 to 1.00 range it’s now in, so if the stage 4 plays out as I expect then it could see a pullback towards the 30 week MA and previous support around the 1.02 to 1.04 range before trying to break down further. So there should be another chance to get in around that level for less risk.

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

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 ?

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 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.

good thread

keep going

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