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've been meaning to ask you who your chart provider is and I'm intrigued by the indicator which filters large ...

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Old Dec 15, 2012, 1:40am   #691
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Re: Stan Weinstein's Stage Analysis

I've been meaning to ask you who your chart provider is and I'm intrigued by the indicator which filters large and small player volume!
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Old Dec 15, 2012, 1:53am   #692
 
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Re: Stan Weinstein's Stage Analysis

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Originally Posted by goodtyneguy View Post
I've been meaning to ask you who your chart provider is and I'm intrigued by the indicator which filters large and small player volume!
Charts are an end of day software called ProTA Gold, and the Effective Volume indicator can be found for free on Chartmill, which has a free stock screener and web charting software. Here's the link: ChartMill.Com | Screener for Stocks on Euronext, Amex, NYSE and Nasdaq Markets.

Effective Volume is quite complicated to explain, so much so that there's a whole book on it called 'Value in Time' by Pascal Willain who created it. Not an easy read, as it is a lot of maths and he doesn't have the best writing style. But you can look at his site for more info which is: Effective Volume - Home
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Old Dec 15, 2012, 11:33am   #693
 
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Re: Stan Weinstein's Stage Analysis

I note that many (most ?) of you trade US stocks, even though you are in the UK. Is this simply because there are more stocks/opportunities in the US markets than here ? Or do you feel they work better with technical analysis ?
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Old Dec 15, 2012, 12:00pm   #694
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Re: Stan Weinstein's Stage Analysis

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Originally Posted by isatrader View Post
Charts are an end of day software called ProTA Gold, and the Effective Volume indicator can be found for free on Chartmill, which has a free stock screener and web charting software. Here's the link: ChartMill.Com | Screener for Stocks on Euronext, Amex, NYSE and Nasdaq Markets.

Effective Volume is quite complicated to explain, so much so that there's a whole book on it called 'Value in Time' by Pascal Willain who created it. Not an easy read, as it is a lot of maths and he doesn't have the best writing style. But you can look at his site for more info which is: Effective Volume - Home
Thanks ISAtader, think I'll give the mechanics of effective volume a miss
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Old Dec 15, 2012, 12:03pm   #695
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Re: Stan Weinstein's Stage Analysis

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I note that many (most ?) of you trade US stocks, even though you are in the UK. Is this simply because there are more stocks/opportunities in the US markets than here ? Or do you feel they work better with technical analysis ?
The former with me but I don't see why Weinstein's method would not work with UK or any other countries stocks as long as the liquidity is there.
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Old Dec 15, 2012, 5:56pm   #696
 
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Re: Stan Weinstein's Stage Analysis

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I note that many (most ?) of you trade US stocks, even though you are in the UK. Is this simply because there are more stocks/opportunities in the US markets than here ? Or do you feel they work better with technical analysis ?
I have traded both UK and US stocks with Weinsteins method, and my best trade last year was actually Rolls Royce (RR.L) a UK stock, which I bought in November on Stage 2 continuation move above a two year Stage 3 range, and then held until July when it looked to be developing a new Stage 3 range (I traded out briefly in March and got back on in April). Obviously, if I'd followed the method to the letter by moving my stop loss up then I should still be in it today. But, I didn't so it's a lesson for me to be less impulsive with my exits and stick to the method.

UK Stocks as a whole however, are more expensive to trade, through the higher fees and the wider bid/ask spreads, and are also much much less liquid than US stocks, except for the top 20 or so largest stocks. So I generally have only traded them in my ISA as longer term holdings and not as short term trades. As the higher fees eat into your returns if you short term trade them. And it can be very hard to have a hard stop loss, as they can be much more spikey on the daily charts due to the lighter volume. So are more suitable generally for the investor method which has much wider stops or a soft stop that you'll implement yourself if it hits your level.

Sharehunter has traded the UK stocks with Weinsteins method for many years as well as the US market, so he might have a different view to me, so Alan if you are reading this, (as I know he does ) - whats your view on it?

I think US stocks are most suitable for the method because they have much greater liquidity, tighter spreads, low commissions, and the benefit of additional internal information that is available through the various market breadth measures which are covered in the book. These can obviously be created for the UK market as well with some manual effort, but it would cover a much smaller sample of stocks, whereas the NYSE data is broad (over 3000 stocks) and readily available on many sites.

Stage Analysis can work on any product such as Stocks, Commodities, Bonds, Treasuries, Futures, ETFs etc. But it was created based on a top down approach for US stocks, from the main indexes, to sector analysis, to individual stocks and market breadth gauges like the Stage Surveys, Advance Decline Line, Momentum Index, New highs - New lows etc. So stage analysis on other products is not always as comprehensive, as you often have less information to make your stage analysis from, and so it's based around a more simplified form of the method. Which nonetheless can still be very effective.
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Old Dec 16, 2012, 1:26am   #697
 
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Re: Stan Weinstein's Stage Analysis

isatrader started this thread Attached are the updated major charts for your own stage analysis and the relative performance table. The updated market breadth measures can be seen in the Market Breadth thread here: http://www.trade2win.com/boards/tech...ml#post2035492

Click the image to open in full size.

The following is my observations on the attached charts. You might or might not agree, but I find it useful to write down my analysis, and it gives me something tangible to review in the future.

I'll start with the major stock indexes in the US. The S&P 500 had a pop and drop week, ending slightly lower on hope that the Fed would do something more to prop up the faltering market. So the S&P 500 ran up into the announcement on Wednesday and then started to sell off as Bernanke was talking and continued lower for the next two days. On the daily chart you can see that it faltered at previous resistance around the 1430 zone from the September/October swing lows, and the November swing high, to close the week below the falling 50 day MA once again. If price breaks below last weeks low in the coming week, then last Wednesdays swing high at 1438.59 will define the top of the Stage 3 range for me personally, with the low of the range already defined by the November low of 1343.35

On the weekly chart you can see that price is just 3 points above a slightly up-sloping 30 week weighted MA and within one days average true range of the one trend line that was briefly violated in November. The momentum index continues to show a large divergence with the price action, and the 30 week weighted moving average momentum is also showing the same, barely moving above it's neutral point over the last 4 weeks and still under it's own declining 10 week MA. Cumulative volume (which is not shown on the chart) is also below it's own declining MA, and if you look at weekly force index here: http://stockcharts.com/h-sc/ui?s=$SP...06&a=247570490 then you can see that it is the weakest top (if it is a swing high that is) of the last three years by that measure; as it hasn't even managed to get above the zero line this time.

The Nasdaq 100 chart doesn't look much better either, and looks to be continuing it's Stage 4 decline after pulling back to test the 200 day MA over the last few weeks. AAPL http://stockcharts.com/h-sc/ui?s=AAP...99&a=286203674 has a big weighting in this index at almost a fifth of the index, and so it's own Stage 4 continuation move last week will weigh on the Nasdaq 100 performance if some downside momentum builds.

The Russell 2000 Small Caps are showing a bit more promise than the large caps and is outperforming slightly. However, the chart has most of the same problems as the S&P 500 and is close to it's 30 week MA and it's one year trendline. So if the others break down then it will likely too, as it's highly correlated to the S&P 500 at 93% on a 200 day average.

To the market breadth measures. The short term moving average breadth charts reversed last week giving bear alert signals on the S&P 500 and Nasdaq 100, and a bull correction signal on the broader NYSE Percent of Stocks Above their 50 Day Moving Average chart http://stockcharts.com/h-sc/ui?s=$NY...28&a=281333308. The more significant medium to long term charts are still on Bear correction status and will move back to bear confirmed if they drop another 3 or 4 %. So the short term reversal from last week could cause that if it gets some more traction in the coming week.

The cumulative Advance Decline line broke out to a new high this week, but reversed to end the week lower and back in the range http://stockcharts.com/h-sc/ui?s=$NY...46&a=286203909. Whereas the New Highs - New Lows dropped back into the neutral zone below the 100 level http://stockcharts.com/h-sc/ui?s=$NY...85&a=264273676, so there are warning signs developing in the internals overall for the US stock market.

The European indexes continue to outperform, with the German DAX topping the relative performance table for another week. The DAX is currently in Stage 2B, but it's currently testing it's 2011 highs, so if the US markets do infact roll over and enter Stage 4 then it will be interesting to see if some of the money from there is reallocated to the European markets, or if they will be dragged down by the external forces. The FTSE 100 is not as strong and is only in Stage 3 currently, although it is showing good relative performance.

Gold (GC) - I did a stage analysis earlier in the week noting Gold was in Stage 1 within a longer term Stage 3 range. The price action since then has taken it lower towards my Stage 4A breakdown level of 1660, closing below the short term trendline and cumulative volume gave a weekly sell signal. So I'm going to revise my stage rating to Stage 1- for Gold, as it looks to be weakening.

Copper (HG) continued to rise up the relative performance table and is now in third place, but it is hitting previous resistance around the 3.7 zone, so the short term direction looks less assured. Stage wise I'd put it in Stage 1 currently with a Stage 2A breakout point above the September highs.

Crude Oil (CL) continues to be the weakest of the major charts in Stage 4B. There's the potential of the beginnings of a Stage 1 range developing over the last few months, but it needs to close above it's still declining 30 week weighted MA to change to Stage 1A imo.

The US Treasuries are interesting charts as the 30 year has broken it's 2 year trend line convincingly now and is below it's 30 week WMA. It's Stage 3 range has been developing since May this year and the lower support zone is fairly well defined between 145 to 147. But the most recent swing low failed to get below 146 and that level is now below the 200 day MA, and so any move below there would be a Stage 4A breakdown imo. However, one positive for the treasuries is that the cumulative volume continues to hold above it's own MA, and so that is still on a buy signal, whereas the other measures such as relative performance are mostly neutral currently. So Treasuries are in Stage 3 in neutral posture.

Finally, the Dollar Index (DX) continues in it's Stage 4 downtrend within a longer term Stage 3 range. It could be argued that it's beginning to form a Stage 1 range and currently moving lower to test the September lows, but it's still well below the 30 week WMA so I have it as Stage 4B for the time being with strong support around the 79 zone.
Attached Thumbnails
spx_weekly_14_12_12.png   ndx_weekly_14_12_12.png   iwm_weekly_14_12_12.png  

dax_weekly_14_12_12.png   ftse100_weekly_14_12_12.png   gc_weekly_14_12_12.png  

hg_weekly_14_12_12.png   cl_weekly_14_12_12.png   ty_10yr_treasuries_14_12_12.png  

us_30yr_treasuries_14_12_12.png   dx_weekly_14_12_12.png   major_charts_rs_list_14_12_12.png  

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Old Dec 16, 2012, 1:56am   #698
 
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US Industry Sectors

isatrader started this thread Attached is the US Industry Sectors weekly and Daily charts and the relative performance table. The sector charts show weakness in the recent market rally with mostly Stage 3 looking charts and a few early Stage 4 charts.

Click the image to open in full size.
Attached Thumbnails
us_industry_sectors_14_12_12.png   us_industry_sectors_d_14_12_12.png   us_industry_sectors_list_14_12_12.png  

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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.

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Old Dec 18, 2012, 3:17am   #699
 
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Re: Stan Weinstein's Stage Analysis

isatrader, you're doing a great job with this thread. Well done!

I have a copy of the chapter from the book Technically Speaking where Weinstein is interviewed on his system. I'm not sure if I can post attachments to this forum, but if you'd like, I can try having the pages scanned and sent to you. I think the book was written in the mid 90s.
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Old Dec 18, 2012, 11:43am   #700
 
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Re: Stan Weinstein's Stage Analysis

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isatrader, you're doing a great job with this thread. Well done!

I have a copy of the chapter from the book Technically Speaking where Weinstein is interviewed on his system. I'm not sure if I can post attachments to this forum, but if you'd like, I can try having the pages scanned and sent to you. I think the book was written in the mid 90s.
Hi gdiddy, a belated welcome to you and thank you for your kind words. I appreciate it.

That sounds interesting about the book. If it's only a small sample, then I think we might get away with posting Weinstein's section of it on here as it's fairly obscure and long out of print. As, if anyone has a problem with it being posted then t2w can remove it. So if you scan it then and then save it as a pdf, then you can post it as an attachment. Or if it's just images save as .png or as a .gif if you can to keep the file sizes of the pages down.
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Old Dec 18, 2012, 11:56am   #701
 
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Re: Stan Weinstein's Stage Analysis

Ok. I'll see what I can do. We have a scanner at my place of work and hopefully I can remember how to use it!
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Old Dec 18, 2012, 8:31pm   #702
 
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Re: Stan Weinstein's Stage Analysis

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Originally Posted by isatrader View Post
Hi gdiddy, a belated welcome to you and thank you for your kind words. I appreciate it.

That sounds interesting about the book. If it's only a small sample, then I think we might get away with posting Weinstein's section of it on here as it's fairly obscure and long out of print. As, if anyone has a problem with it being posted then t2w can remove it. So if you scan it then and then save it as a pdf, then you can post it as an attachment. Or if it's just images save as .png or as a .gif if you can to keep the file sizes of the pages down.
Weinstein is well worth the read
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Old Dec 18, 2012, 9:48pm   #703
 
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Re: Stan Weinstein's Stage Analysis

isatrader started this thread Interesting development, in that the broad NYSE chart (NYA) of all stocks in the New York Stock Exchange is testing the top of it's Stage 3 range that's developed over the last 3 months and also the US 30 Treasuries has hit the breakdown level I was watching for potentially moving into Stage 4A. The major swing low at the bottom of the support zone to watch is 144.47 from September. But the more recent swing low was broken just today, so it's turning out to be an interesting week so far.
Attached Thumbnails
nya_weekly_18_12_12.png   us_30yr_treasuries_18_12_12.png  
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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.

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Old Dec 18, 2012, 11:30pm   #704
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Re: Stan Weinstein's Stage Analysis

It looks to me like Italy and Spain are threatening to be in a stage 2A by the end of the week.

I know the stock markets discount the future but with the amount of private sector debt still at elevated levels I find it hard to believe that the US indices will go onto make new highs anytime soon. Similarly with the european indices that are in a stage 2A (Austria) or are threatening to be (Italy and Spain), I am tending to think that these will end up back in the basing pattern.

Having said that, perhaps the big players are switching capital out of sovereign debt in favour of stocks on the basis that stocks are safer than government debt?

Last edited by goodtyneguy; Dec 19, 2012 at 12:27am.
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Old Dec 18, 2012, 11:54pm   #705
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Re: Stan Weinstein's Stage Analysis

if im looking at the right chart i would say it poised to rise...thanks for bringing it up, il explore the spain market tomorrow as looks very interesting to me.
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