Stan Weinstein's Stage Analysis

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isatrader

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Oct 20, 2010
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Stage 2A - examples

Here's some new Stage 2A examples recommended in a recent GTA report for you to look through and which are moving from Stage 1B (late in the basing phase) into Stage 2A (early in the advancing phase). I've added the 50 day and 200 day simple moving averages to the daily chart to help as well, as as you can see, it's clear the stock needs to be trading above the 200 day MA and then breakout to become Stage 2A, so the breakouts that look good below that would still be in Stage 1 by my interpretation.

I'm going to try to get hold of more back issues of the GTA report so I can build a decent database of the Stages examples for us to reference. To see the previous examples of all the Stages I posted last year, go to page 3 on thread here: http://www.trade2win.com/boards/technical-analysis/134944-stan-weinsteins-stage-analysis-3.html#post1695880
 

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isatrader

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US Industry Sectors

Attached is the latest US Industry Sectors charts for analysis. I've included daily charts as well for the first time to give a shorter term view.

Financials are looking up with the XLF closing right on it's Stage 2A breakout point. The Mansfield RS is improving as well, although it is still below the zero line, but if the whole sector is moving from Stage 1B to Stage 2A then it's a good time to start looking at some individual plays from the group. Consumer Staples (XLP) and Consumer Discretionary (XLY) continue to grid higher, but Technology (XLK) still leads the pack. There were a number of negative moves this week as well with Basic Materials (XLB), Energy (XLE), Industrials (XLI) and Utilities (XLU) all finishing lower for the week.
 

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isatrader

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Attached is the latest major charts for analysis. I've added the FTSE 100, DAX and Russell 2000 to mix to broaden the comparisons.

The 30 year Treasuries chart is this weeks chart of note for me as it moved from Stage 2B- into Stage 3A- with it's close below the 30 week weighted moving average this week. I've given it a minus rating as the price is yet to close below the recent tight range below 139.75 so it could still go either way here, but the negative indicators continue to build up with increased volume on this weeks move down, the Mansfield RS is also negative and cumulative volume gave a sell signal four weeks ago and has failed to get back above it's moving average.

The Russell 2000 small cap index underperformed the S&P 500 by around 3% this week and broke below it's February consolidation range suggesting to me that people are moving out of the riskiest areas either to the sidelines or rotating into some of the larger more defensive stocks as treasuries didn't see the normal inverse correlation. So a potential warning sign there imo.

Gold and Silver also made headlines this week with a Bernanke fueled sell off, which was exacerbated by the contact rollovers in the futures as people decided to book their profits from the run up since the new year began. Both were hit hard but no major technical damage was done as Gold held above 1700 and Silver pulled back to the support of it's recent range around the $34 level. This could change if Gold closes below 1700 or Silver below $33 so it will be interesting this coming week to watch.

Copper advanced a little further towards it's Stage 2A breakout point of $4 again this week and settled the week at $3.903. I personally think this is one of the key components necessary to drive the stock market higher as if it can breakout then it will give extra weight to stocks to continue higher.

WTI Crude Oil put in a short term high at $110.55 after quite a volatile week of headlines affecting it, but the short term trend is still up as it's forming a new trading range between $105 and $110.

Finally the Dollar Index had a strong reversal following the Bernanke comments and closed the week higher. The $80 level looks to be fairly strong resistance as it's had a number of reversals around there recently, but it closed the week back above it's uptrend line so it is definitely an important one to watch this coming week as it is mostly inversely correlated with the stocks and commodities markets.
 

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isatrader

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Secondary Indicators

While the weekly chart secondary indicators still look strong, the daily chart is starting to show some divergences with the price action. The Advance Decline Line 200 day moving average has gone sideways during February while the S&P 500 has continued higher. Daily momentum has also started to roll over over the last month or so and is beginning to move lower. So some warning signs are beginning to appear on the short term chart, but as always these are secondary factors as the price action is the primary focus.
 

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isatrader

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Stage 1B - examples

My email to Stan was partially successful. I wasn't able to get hold of any back issues of the GTA from him; however, he very generously let me see the most recent report and so I can now create more examples of the sub-stages for us all. A key stage I was hoping to be able to identify better was Stage 1B (Late in base-building phase. Watch for breakout.) As once in Stage 1B the Stage 2A breakout point can be easily defined as you will see from the numerous examples below.

All the examples are from 3rd March 2012 and their current charts will more than likely be in worse shape now due to the market sell off the last few days. But the point of the examples though is to learn how to identify the stage, which for me have made it much clearer. Note the importance of being above 200 day moving average on all the examples.
 

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isatrader

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Stage 4B- Examples

Attached are examples of Stage 4B- which are not yet “officially” in Stage 1A, but the stock has now seen its low for the cycle.
 

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isatrader

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Stage 1A - examples

Attached are examples of Stage 1A - Start of a base. Needs much more time.
 

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isatrader

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Stage 1 - examples

The following are examples from the 2nd March 2012 of Stage 1 - which is classed as the Basing Phase. May begin accumulation. These are not recommendations, just examples to help you learn to define Stage 1 more accurately.
 

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isatrader

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Stage 2A - examples

Here's some more Stage 2A examples from the 2nd March 2012, which is considered to be early in uptrend stage. Again these are not recommendations, just examples to help us learn to define Stage 2A more accurately. As remember you need to consider all the other elements necessary from the method before putting on a trade.
 

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isatrader

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Thanks for the charts to help us to understand the various stages.
No worries mfoconnor, I hope it helps you and welcome to the thread. I've noticed you lurking for a little while, so thanks for contributing.

The charts have certainly given me a lot to think about, as I've come to conclusion that I've been a bit too cautious with my initial Stage 2 entry points from looking through them all.

I've got a few hundred examples of Stage 2 and Stage 2B to go through. So I'll pick 25 or so of each and post those as well in the coming days.
 

isatrader

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Stage 2 Examples

Attached is some examples from 2nd March 2012 of Stage 2 - which is the Advancing Stage.
 

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isatrader

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Stage 2B Examples

Attached is some examples from 2nd March 2012 of Stage 2B, which is classed as: Getting late in uptrend.
 

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isatrader

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Attached are this weeks major charts for analysis.
 

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isatrader

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Gold Stage Analysis

Gold broke below it's 200 day moving average today moving it into Stage 3B imo, as the 30 week SMA has also turned down. There's clearly significant resistance down at the 1550 area, which is the bottom of the large stage 3 range imo. So that seems the logical target for a short term move, but it would need to start closing below there to enter Stage 4A I believe.
 

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isatrader

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US 30 Year Treasuries Stage Analysis

An important chart to note if you trade stocks due to it's mostly inverse correlation (that I highlighted had changed to Stage 3A- a few weeks ago) is the US 30 year Treasuries. The last two days have seen the confirmed breakdown into Stage 3, with today's increased volume moving it lower and managing to close below the 200 day simple moving average.

The 135 area now becomes the Stage 3 lower support level to watch as a weekly close below that would signal a Stage 4A breakdown imo. However, the measured move from the four month range gives a rough target of 134 in the short term, so that gives extra weight to the 135 level holding up on a closing basis on the first attempt at breaking it.

So with that level rapidly approaching we could see a reversal there and a retest back up towards the breakdown level, which would pressure stocks in the short term causing a correction. However, if treasuries then rolled over and moved to break down again, the Stage 4A breakdown could be the catalyst for the next leg of the stock rally imo.
 

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lplate

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Re: Gold Stage Analysis

Gold broke below it's 200 day moving average today moving it into Stage 3B imo, as the 30 week SMA has also turned down. There's clearly significant resistance down at the 1550 area, which is the bottom of the large stage 3 range imo. So that seems the logical target for a short term move, but it would need to start closing below there to enter Stage 4A I believe.
isa, thank you for that analysis and agree a stage 4 is a long way off. There might be a retest of the underside of the 200 day sma first, and there is also some past activity at 1600-1625 area, so it could stall there also before the 1500s.
Commentators have noted the recent breakdown since 29 Feb in the normal correlation of the $, so it is an unusual goldilocks period, suiting Obama, the US, Europe and China quite well. It won't last, I think, as it is based on hot money, so Stage 4 might never be reached. That is why I might sit out any thought of shorting gold and instead it looks more an opportunity to build up a long-term holding.
http://tinyurl.com/6qp2azr

PS thank you also for your excellent work on obataining and studying the recent GTA sample. That must have taken you ages, and is really high quality.
 
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