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 Thanks isatrader for the analysis. To me, the lower low below the trendline is the key ...

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Old Aug 24, 2012, 8:10am   #461
 
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Re: QCOR - sell point

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Originally Posted by lplate View Post
Thanks isatrader for the analysis. To me, the lower low below the trendline is the key feature. I notice you have drawn the trendline to the bottom of the lower low, so you have drawn it like on chart 6-3 Alfin page 166 and chart 6-18 IBM page 178. With chart 6-12 Anacorp and 6-19 Central Hudson, however, Weinstein draws the trendline to the lower low only if it happens to coincide with the trendline. On charts 6-6 Rochester and 6-7 Chase Manhatten, pages 169-170, though, the lower low happens to be below the trendline, and I see QCOR as like those.
I suppose this is the problem with using trendlines, that it is a less exact method than using horizontals.
Thanks again.
For the trend lines I use the weekly closing prices instead of the intraday lows as I find personally that they are more significant. But a valid trend line needs to have at least 3 touch points I believe, but it is more of an art than a science, as everyone will draw them slightly different. So don't be too rigid with breaks above or below them unless it starts closing above or below them and doesn't recapture the broken trendline.

Ok, I'm off to London now, as I'm having laser surgery on my eyes this morning, so I might not be able to post for a few days as I don't think I'm allowed to use a computer for 3 or 4 days. Have a good weekend.
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Old Aug 24, 2012, 9:53pm   #462
Joined Aug 2005
PDLI long

To balance the QCOR short I have found a promising dividend-paying biotech. It broke at $6.75 a week or so ago (on no particular news story), and so the strategy is to look for a good pullback from the $7.50 Jan 2010 resistance.
(Stockcharts have an erroneous chart, so am trying chartmill again.)
http://img832.imageshack.us/img832/2518/pdliweekly.png

Last edited by lplate; Aug 24, 2012 at 10:01pm.
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Old Aug 25, 2012, 1:11am   #463
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Re: Stan Weinstein's Stage Analysis

Hey Isa and everyone-

First day on T2W and found it by researching Mr. Weinstein. So happy to see there is already 58 pages of discussion and ideas from you all. I will try and read through in the next few days as to not ask too many redundant questions. About me- just getting into the game and was inspired by Stan (obviously). Looking to learn/discuss and even help when i possibly can. Thanks to isa for starting this thread!

Mike

P.S. Hope your eyes are better soon-
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Old Aug 26, 2012, 8:18am   #464
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Re: Stan Weinstein's Stage Analysis

Hi LockedIn. In isatrader's absence, I'll say hi.
So you can read the book with questions in your head, the points of discussion included in the thread are:
Setup: the actual break point (up or down)
should volume occur before, during, or after (or all 3!)
should we stick to horizontals and not bother with trendline breaks
sectors - "forest to trees" - is this always necessary?
moving average - few free packages have "weighted". Can we use simple or exp instead?
managing the position, esp stage 3
Software: can you get by on free software
Scanning for stocks: ditto, and where. Use of subscription services.
Timing the trade: immediate v can we delay, buying highs v waiting for pullbacks
Stops and targets
Trader v Investor
Can it be used on sectors (through ETFs) commodities, currencies, and global stockmarkets, and how

(I usually chip in on these topics, but isatrader studies this diligently, so is 99% likely to be right - make that 100% !)
Listen to the interviews with Weinstein; and there are also a couple of videos early on by isatrader.
I throw in some stock suggestions, but I am four weeks late usually, so take my ideas with a pinch of salt !

Last edited by lplate; Aug 26, 2012 at 9:18am. Reason: add an item I forgot
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Old Aug 27, 2012, 8:53am   #465
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Re: AAPL - CHS Chico's - question on volume

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Originally Posted by isatrader View Post
If you look at the ideal volume chart on page 104 in the book, you'll see that the volume doesn't have to pick up until the stock breaks out, and so you don't need to consider it when finding your picks that are close to the breakout point. The way I play it personally, is that I do my due diligence to make sure everything else is in place for the method and then I buy the stock on the daily close above the breakout point. I then use the volume over the following weeks as a confirmation signal, as if it doesn't build strongly with the breakout as the method requires, then I'll just take a quick profit or trail the stop, as without the volume it's more likely to just be a mediocre pick that's less likely to continue too much higher.

So don't be too rigid with the volume as it takes time to show and is why I use the cumulative volume as it's easier to read I find. I suggest if the volume is strong on the daily chart when you get the daily close above the breakout level, then that's good enough to get in if everything else looks right. As remember, in the book he says to use buy-stop orders to get in, but I think this has changed over the years, as I remember him talking on one of the interviews about waiting for a confirmation of a close above the breakout level now.
Important thoughts, thanks isa. Vol is also item 1 on p150 on he Triple Confirmation Pattern in Uncovering Exceptional Winners I'm seeing some breakouts, but not much volume to accompany, whether before, during, or after, even on AAPL - weekly - StockCharts.com

Last edited by lplate; Aug 27, 2012 at 8:58am.
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Old Aug 29, 2012, 7:28pm   #466
 
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Re: Stan Weinstein's Stage Analysis

isatrader started this thread
Quote:
Originally Posted by lplate View Post
Hi LockedIn. In isatrader's absence, I'll say hi.
So you can read the book with questions in your head, the points of discussion included in the thread are:
Setup: the actual break point (up or down)
should volume occur before, during, or after (or all 3!)
should we stick to horizontals and not bother with trendline breaks
sectors - "forest to trees" - is this always necessary?
moving average - few free packages have "weighted". Can we use simple or exp instead?
managing the position, esp stage 3
Software: can you get by on free software
Scanning for stocks: ditto, and where. Use of subscription services.
Timing the trade: immediate v can we delay, buying highs v waiting for pullbacks
Stops and targets
Trader v Investor
Can it be used on sectors (through ETFs) commodities, currencies, and global stockmarkets, and how

(I usually chip in on these topics, but isatrader studies this diligently, so is 99% likely to be right - make that 100% !)
Listen to the interviews with Weinstein; and there are also a couple of videos early on by isatrader.
I throw in some stock suggestions, but I am four weeks late usually, so take my ideas with a pinch of salt !
Thanks lplate, I'm very humbled by your kind words

Welcome to the discussion Locked in. I hope you find the thread useful and it will hopefully help you follow on with your studies of the method in more depth once you've finished the book.

My eyes are still pretty awful from my laser surgery last week, so I can't be on the computer for very long. But it looks like lplate has done a good job of summing up a lot of what we've covered in the thread.

There are numerous examples throughout the thread to help learn how to identify the stages, but for the main stage examples to study, you can find them on page 3 from here:

http://www.trade2win.com/boards/tech...ml#post1695880

And multiple newer examples from this year on page 41 from here:

http://www.trade2win.com/boards/tech...ml#post1804190
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Old Aug 30, 2012, 9:46am   #467
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Re: Stan Weinstein's Stage Analysis

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... My eyes are still pretty awful from my laser surgery last week...
Hope the op went OK. Take it easy.
Dead market is waiting for Big Ben to speak. There'll be no QE3 yet, and I'm not sure if market has twigged this, so it's not a time to shop for stocks and commods yet, as Sept will be disappointing. It's a great time to rest your eyes and refresh the mind.
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Old Aug 30, 2012, 10:50am   #468
 
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Re: Stan Weinstein's Stage Analysis

isatrader started this thread
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Hope the op went OK. Take it easy.
Dead market is waiting for Big Ben to speak. There'll be no QE3 yet, and I'm not sure if market has twigged this, so it's not a time to shop for stocks and commods yet, as Sept will be disappointing. It's a great time to rest your eyes and refresh the mind.
The op went well, thanks. But recovery is not fun from Lasek, as they take off the surface of your eyes and so they are fairly traumatised and slow to recover as the protective layer on the surface of the eye has to grow back. So everything is still quite blurry and my eyes are very sore and hurt every time I blink. So have been doing lots of sleeping.

I think you're definitely right about QE, but I am less certain on September as think after the initial reaction that it will be seen as a positive for stocks in the longer run, so am holding onto my positions until everyone gets back from their summer holidays and the volume returns and we get some more clarity.
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Old Aug 30, 2012, 1:37pm   #469
 
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Gold (GC) Stage Analysis

isatrader started this thread I bought back into Gold and Silver a few weeks ago, so I thought it would be good to do an updated stage analysis as they are interesting charts.

The weekly Gold (GC) chart is currently in a larger Stage 3 formation that has developed over the last year. However, the break above the 30 week WMA could possibly be the beginning of a new Stage 1A after it failed to break down into Stage 4 in May/June. Price is now currently testing the one year closing downtrend line, and a break above 1680 would give a possible long traders entry for a test of last years lower highs up to the 1800 level.

The long term monthly Gold chart continues to be in Stage 2B. In the last 10 years it’s only gone into Stage 3 once during 2008. However, the consolidation of the last year hasn’t turned the moving average flat or down, and so the 10 year bull continues currently. The cumulative volume is very encouraging, as very little money has come out over the last years consolidation period.

I've also attached the P&F chart as it shows the areas of volume resistance, of which 1680 is the key level to break above.
Attached Thumbnails
gold_weekly_29_8_12.png   gold_monthly_29_8_12.png   gold_pnf_29_8_12.png  

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Old Aug 30, 2012, 2:48pm   #470
 
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Silver (SI) Stage Analysis

isatrader started this thread The weekly chart is currently in Stage 1A after a year in Stage 4 following last Septembers breakdown. Price has broken out from the year long downtrend after failing to breach the four year old uptrend line which is converging with the shorter term downtrend. Cumulative volume gave a new weekly buy signal a few weeks ago and price has got back above the 200 day moving average and made a swing high at 31.225. Therefore a short term traders entry would be to play a continuation move above that imo.

The monthly silver chart has been mostly in Stage 2 since 2003, Although it briefly broke down into Stage 4 during 2008’s sharp sell-off, but recovered strongly back into Stage 2 and pushed to new highs in 2011 on increasing volume. The sell-off over the last year has moved the monthly chart into Stage 3 again, with price currently just below the 30 month weighted moving average and close to breaking the triangle consolidation pattern.

Cumulative volume had a massive run-up in 2010-2011, but the sell-off hasn’t been very strong, and so although currently on a volume sell signal it could easily reverse back to positive again.

So the longer term picture is currently flat in Stage 3, while the shorter term picture is turning slightly bullish in Stage 1A.
Attached Thumbnails
silver_weekly_29_8_12.png   silver_monthly_29_8_12.png   silver_pnf_29_8_12.png  

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