Stan Weinstein's Stage Analysis

isatrader

Senior member
2,963 134
US Industry Sectors

Attached is the the weekly and daily charts of the major sectors and below is the relative performance table in order of strength. Notable changes this week were the crosses above and below the zero line for Consumer Staples (XLP) and Basic Materials (XLB) and the move off the bottom stop for Utilities (XLU). Health Care (XLV) also moved up and so the three defensive sectors showed the best relative performance which is unsurprising considering the volatile week in the US market.

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LiboNZT

Junior member
47 3
Hi LiboNZT and welcome to the discussion if it's your first time here.

KCO looks to satisfy most of the requirements for the method. The only thing missing is a means of finding out how strong the group it belongs too is in relation to the market. A good stock will be held back by a poorly performing group. The RS is positive, see my charts, I think you need to reconfigure your settings, see ISAtraders post numbers 875 & 876.

Assuming the group is strong then I pull back to around the BO level is where I'd be looking to get in or a break out above 12.33. Do you know where we can find european sector/group charts?

I use the Paint program that comes with windows operating system to copy my charts before uploading to the thread. Alternatively if you want to post them directly inot the thread you will need to find a host i.e. your own website or you can use a free site like photobucket.com. I find it easier to use the former. This is how:

1) Take a screenshot of your chart by pressing the PRTSC key, on a QWERTY board it is at the top right about four keys in. This puts an image of your chart on your clipboard.
2) Open your Paint program, click start and type "paint" into the search box and then click on the paint icon.
3) Once paint is open click on edit and paste, you should see now see your chart.
4) Cilck on "file" then "save as" a .png file type and save on your desktop. You can close "paint" now, unless you want to copy more charts.
5) Go to the discussion thread and click the reply button then under the reply box click on "manage attachments" in the additional options box. A pop box will appear, on the left side click on one of the "Choose File" buttons and then locate your chart on your desktop. Click on it and then on open in the dialogue box. Once the name of your file appears next to the "choose button" in the pop up click on the upload button and it will appear below listed as current attachments. You can close the pop up now.
6) All the that remains to be done is to add the text to your post then preview it . You should also see your chart, then when happy submit reply.

Thanks a lot for the info on how to upload charts more easily. Sector strength is something I didn't mention in my previous post, thanks for pinpointing that goodtyneguy! Unfortunately this is the most difficult part for me as it comes to Stan's analysis. All the data that you need to make an analysis for a stock are within the stock's chart, all but market sector info. I haven't found yet any free provider of sector charts though I believe there are still other ways to check sector strength. One that I prefer is to check the relative strength of a particular stock with it's sector leader. It's easier for me to spot the sector leader and then compare my stock with it. It is surely not the most effective way and it might bring misleading results from time to time, but as you increase the number of stocks compared with our own pick you get a fair idea. Another way is to compare the relative strength of the leaders with the perfomance index and then check for any unusual action in relation to our own pick again.

I believe stan's analysis is a very efficient way at looking the markets. There are many reasons why this is happening and it seems to incorporate and blend together a lot of them. Insider trading, investor psychology and technical analysis all perfectly blend together in Stan's analysis providing very interesting results. Good job on this thread guys, one of the most interesting i've come upon, subscribed 4life!
 
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goodtyneguy

Active member
146 9
Thanks a lot for the info on how to upload charts more easily. Sector strength is something I didn't mention in my previous post, thanks for pinpointing that goodtyneguy! Unfortunately this is the most difficult part for me as it comes to Stan's analysis. All the data that you need to make an analysis for a stock are within the stock's chart, all but market sector info. I haven't found yet any free provider of sector charts though I believe there are still other ways to check sector strength. One that I prefer is to check the relative strength of a particular stock with it's sector leader. It's easier for me to spot the sector leader and then compare my stock with it. It is surely not the most effective way and it might bring misleading results from time to time, but as you increase the number of stocks compared with our own pick you get a fair idea. Another way is to compare the relative strength of the leaders with the perfomance index and then check for any unusual action in relation to our own pick again.

I believe stan's analysis is a very efficient way at looking the markets. There are many reasons why this is happening and it seems to incorporate and blend together a lot of them. Insider trading, investor psychology and technical analysis all perfectly blend together in Stan's analysis providing very interesting results. Good job on this thread guys, one of the most interesting i've come upon, subscribed 4life!

You can also now check the sector strength using the european sectors ETFs provided by State Street who also provide the US sector ETF's - see isatrader's charts.
 

isatrader

Senior member
2,963 134
Attached is the updated major charts and the relative performance table.

I've also updated the market breadth charts that I follow, but these have moved to a new website I've built this week, which this thread is also moving to, as it gives me the ability to organize the content across multiple threads, which will make it easier to find the content I want to look at, as this is getting too large to keep track of everything. Although I will continue to post on here too, but less frequently. So I hope you will have a look at the new threads if you follow this thread regularly. PM me if you want the address to check it out or find stage analysis on twitter.

Anyway, back to this weeks update. Below is the relative performance table and updated charts.

Relative Performance Table - week ending 1st March 2013

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isatrader

Senior member
2,963 134
Attached is the the weekly and daily charts of the major sectors and below is the relative performance table in order of strength. Notable changes this week was the cross back below the zero line for Consumer Staples (XLP) and Energy (XLE) also declined two places. Whereas on the stronger side of things Health Care moved up to third in the relative performance rankings.

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isatrader

Senior member
2,963 134
Attached is the lists of this weeks 22 breakouts and 21 breakdowns. So a very mixed week for the S&P 500 stocks, with the breakdowns finally starting to pickup as this has been very one sided for a while now.

These are P&F breakouts and breakdowns where it made a higher high or lower low than the previous column of Xs or Os. It shows the whole week, so some will have failed to close above/below the breakout/breakdown levels. But gives a starting point to scan to see if any good with regards to Weinstein's method.

Week ending 1st March 2013

Breakouts
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Breakdowns
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isatrader

Senior member
2,963 134
US 10 & 30 Year Treasuries Stage Analysis

The 10 Year US Treasuries have finally closed below the horizontal support from the August 2012 low, after moving into Stage 4A at the beginning of this year. So the 10 Year US Treasuries are in a confirmed Stage 4 now imo, with relative performance continuing to weaken below it's Mansfield zero line. The 30 week MA is declining, and has been since mid December, and cumulative volume is on a sell signal and declining.

The initial swing target is 127.80 which would see it test the lower horizontal support from the late 2011 Stage 3 range. if that fails to hold then the next support would be at 125. Below is the marked up chart.

US 10 Year Treasuries (TY) chart

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After grinding slowly lower for last nine weeks since the Stage 4 breakdown, the 30 Year Treasuries have made their first continuation move lower. Like the 10 Year Treasuries the 30 week MA is declining, and relative performance is continuing to weaken below it's zero line. And cumulative volume continues to decline also.

The swing target is still 136.69, which like the 10 Year Treasuries would see the 30 Year Treasuries test the bottom of the previous Stage 3 range. A break of which could see a potential move down to the next support at 131. Below is the marked up chart.

US 30 Year Treasuries (US) chart

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US Treasuries have a largely inverse relationship with US Equities, and so these moves are very bullish for the stock market which also broke out this week to the upside, and hence gives some confirmation to these Stage 4 breakdowns in the Treasuries and vice versa in the stocks.
 

isatrader

Senior member
2,963 134
Attached is the updated weekly major charts and the relative performance table.

There were multiple continuation moves this week, with the S&P 500 making a notable continuation, which could propel it too it's 2007 high of 1576.09 - also notable on the S&P 500 chart is that it's now back over 5% above it's 30 week WMA, which is the strong bull zone (not part of the method - just a personal addition).

On the relative performance table the German Dax recaptured the top spot it held for most of the second half of last year and the 10 Year Treasuries moved lower as it confirmed it's Stage 4 breakdown as mentioned in the previous post.

As I mentioned last week, I've created a new home for this thread, as it's getting too difficult to keep up with the previous analysis in this single thread and the discussions we've had. So I built a new free site with multiple threads continuing from this thread that you can find it at: Stage Analysis - Trading and Investing using Stan Weinstein's Four Stage Breakout method

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isatrader

Senior member
2,963 134
US Industry Sectors

Attached is the updated US Industry Sector charts and the relative performance table, which confirms a lot of what I was seeing in the S&P 500 breakouts every day this week, as Consumer Discretionary stocks featured heavily and hence it moved up two places in the table to second place.

Five of the nine sectors continued to make new highs, and all nine sectors are trading above their 30 week moving averages.

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fgrtt2w

Newbie
1 0
isatrader,

thanks for a great thread. What software are you using for creating these charts?
 

isatrader

Senior member
2,963 134
isatrader,

thanks for a great thread. What software are you using for creating these charts?

I use multiple programs as some of the data needs to be inputted by hand like the continuous futures charts to have accurate volume data. So the majority of the charts are done on an end of day chart program for the Mac called ProTA Gold. Others are done using the free online chart programs like ProRealtime and Stockcharts.
 

isatrader

Senior member
2,963 134
Thanks for the positive feedback, and sorry I've been quiet these last few weeks on here. The new Stage Analysis thread has been keeping me very busy, so I've not had time to duplicate the main posts on here. One new section I'm working on on the other site is a small study of the stop loss positions using the GTA report I got when I contacted Weinstein last year as a free sample. As there's over 100 recommendations in it with the suggested trader and investor stop loss positions. So I'm in the process of marking up each chart with the stop loss positions so that I/we can enhance our understanding of where they should be placed according to the method.

I've also recreated and updated the trailing stop diagrams from the book and have attached below. So to get the full descriptions of how to use these, see pages 185 and 195 in the book.

Trailing Stop Loss Guide for Investors (Average 12 months)

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Trailing Stop Loss Guide for Traders (Average 2 to 4 months)

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lplate

Active member
116 7
Re: CUP.L,UK:CUP breakdown

Ocado OCDO awful fundamentals but chart with positive potential.
Cupid CUP good fundamentals, trading statement, possible takeover, but awful chart. £125m global online-dating company only listed for 2 years, but Weinstein method warns. Cupid sketch chart from ADVFN
This has played out, and shares closed today at 72p (Edit: no, sorry, 49p!) , clearly lower than even if the Cupid investor was pedestrian to act upon the 170p breakdown as late as 150p on the attached chart drawn in Feb.
Obviously several charting methods, not just Weinstein's, would have got you out of this stock, but it again demonstrates that a poor chart casts questions over apparently strong fundamentals.
BBC News - Online dating firm Cupid plc sees share value plunge
 
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isatrader

Senior member
2,963 134
Attached is the updated major equity index charts and relative performance table

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