03/10/2012 Weekend Watering

[trendfollower]

Example of an interesting new way of picking stocks:

http://bit.ly/Ab2TNv

[Harapa]

We all dream of knowing ahead of time entry and exit points to maximize profit from a trade. However, this seems more like a dream than reality for most of us. Tom DeMark’s “Range Expansion algorithm" tries to predict next day ranges using yesterday’s true range and Fibonacci value of 0.618 and 0.382. This exercise produces 4 values two high (H1 & H2) & 2 low (L1 and L2) [1].

Next question is how to use this information. Here is an excerpt from “DeMark Indicator” by Jason Perl that shed some light on might use this information to enter a trade [2].

So next question is "what is the return of such trades". Table below shows hypothetical return of trades triggered when price moved up thru H2 at H2 price and closed on next day open or high (if you know that ):-

Frankly, I am perplexed by the return for this strategy. What do you think? I appreciate your feedback!

[1]
Here is how it is calculated.
First determine the true range (TR) of security of interest (SPY in this case) from a day earlier.
Multiply TR with 0.618 and 0.382.
Add or subtract the above from the open of next day to arrive at H1& H2 or L1& L2
Here is an example of this calculation
Previous day TR = 1.15
Today’s Open = 137.30
Then
H2 137.30 + (TR * 0.618) =138.01
H1 137.30 + (TR * 0.382) =137.74
Open 137.30 (Actual)
L1 137.30 + (TR * 0.382) =136.86
L2 137.30 + (TR * 0.618) =136.59

[2]
“….. you can isolate instances in which, if the market breaks the first upside level, it is likely to reach the second upside level on an intraday basis.

For example, if yesterday’s close was a down close compared with the previous day’s close, and then price takes out yesterday’s true range multiplied by 0.382 and added to today’s open, there’s a good chance the up move will extend higher toward yesterday’s true range multiplied by 0.618 and added to today’s open on an intraday basis.
Conversely, if yesterday’s close was an up close compared with the previous day’s close, and then price takes out yesterday’s true range multiplied by 0.382 and added to today’s open, I’d be inclined to fade the market, and go short on an intraday basis if it reaches yesterday’s
true range multiplied by 0.618 and added to today’s open.

Similarly, if yesterday was an up close compared with the previous day’s close, and then price takes out yesterday’s true range multiplied by 0.382 subtracted from today’s open, there’s a good chance the down move will extend lower, on an intraday basis, toward yesterday’s true range multiplied by 0.618 and subtracted from today’s open.
Conversely, if yesterday’s close was a down close compared with the previous day’s close, and then price takes out yesterday’s true range multiplied by 0.382 and subtracted from today’s open, I’d be inclined to fade the market and go long on an intraday basis if price reaches yesterday’s true range multiplied by 0.618 and subtracted from today’s open.”

[Harapa]

Update on SPY_TRIN and Small Cap Model
[For explanation of these models, check 3/3/2012 weekend watering]
SPY_TRIN model is a hair away from overcoming the last hurdle when using simple MA, however, it is below this point in exponential and weighted version of this indicator.

Small Cap model triggered an exit on 3/6, position was closed on 3/7. Now sits in cash. Watching for Lending_Environment (LE) to turn positive. Momentum and LE "in sync" leads to firework

[KENA]

Hope you guys don,t mind me posting graphs for practice..This one LiquidityFlows By Stocktiming.com

[KENA]

I want to practice and write dn all stepts so I don't forget.I have been on Cobras site for about a year but could not post Graphs. I just did not know how until "Al "posted stepts on how to do it.Thanks for letting me bother you for little bit of time.

[Al_Dente]

HELLO WEEKENDERS

GREECE
http://graphics.thomsonreuters.com/F/09 ... PORT2.html#

EUROPE
http://www.nytimes.com/interactive/busi ... &emc=tha25

And as soon as we get that all “fixed”, I have a sneaking suspicion there will be another crisis du jour for us to worry about.

http://www.youtube.com/watch?v=5TGZD5FBLcU

[KENA]

Blue ..Strong Tending Positive Stocks..Red..weak tending negitive stocks for last Thur. by stocktimimg.com

[Al_Dente]

Weakest links: TRAN and RUT
Strongest links: QQQ and maybe banks if they keep playing catch up
Can the rally continue? Possibly. There is another senseless “stress test” due out next week (?) which could cause another short-covering rally in banks
(it is possible!). But the minute the QQQs get pulled down, FOR ANY REASON, the rally will be toast, at least that’s what I read going back to 2009
(there is no meaningful correction without the QQQs correcting).

[BullBear52x]

Lets talk candlesticks.
Weekly: Hanging man
Daily: Spinning top

[KENA]

Another one from stocktiming .com..Left out a couple of stepts but everything seems to work

[KENA]

Monthly chart By stock timing .com.This is up dated every monday

[KENA]

Here is one for AL for the QQQ

[Al_Dente]

Looking just at the Relative Strength Ratios, it appears to be a rotation-type thingie.
In Jan and early Feb folks bought the “risk-on” mid and small caps. Then they started selling the small and mid caps and buying the large caps ($OEX).
After the market corrected last week (if u blinked u missed it) folks have started buying the “risk-on” small and mid caps again.
If they had been really scared last week, they would have shed everything and bought the safety and cushy comfort of bonds (they didn’t).
I suppose that is what we must keep an eye on: when the correction resumes, it is inevitable that we’ll see it in money flow out of stocks and into bonds
of all maturities, especially the shorter terms (like IEF etc) and the ETFs like TLT.
PS: Kena, VERY nice, keep it up, thx

[KENA]

Thanks for the time for practice..Time for me to work out.See you all mon.

[BullBear52x]

Frankly, I am perplexed by the return for this strategy. What do you think? I appreciate your feedback!

[1]
Here is how it is calculated.
First determine the true range (TR) of security of interest (SPY in this case) from a day earlier.
Multiply TR with 0.618 and 0.382.
Add or subtract the above from the open of next day to arrive at H1& H2 or L1& L2
Here is an example of this calculation
Previous day TR = 1.15
Today’s Open = 137.30
Then
H2 137.30 + (TR * 0.618) =138.01
H1 137.30 + (TR * 0.382) =137.74
Open 137.30 (Actual)
L1 137.30 + (TR * 0.382) =136.86
L2 137.30 + (TR * 0.618) =136.59

based on yesterday's out come, the standard Pivot point is still out perform this calculation.

[Harapa]

This chart really bothers me. While RSP is about to reach its previous high, it relative strength is lagging. Last this was seen in 2007. You know what followed. Bottom panel (Green) is ROC of EMA of relative strength, it has a decent history of indicating turns, it is about to turn negative. Last time it turned negative was on Jul 25, 2011, what followed is also history.

[Harapa]

Frankly, I am perplexed by the return for this strategy. What do you think? I appreciate your feedback!

[1]
Here is how it is calculated.
First determine the true range (TR) of security of interest (SPY in this case) from a day earlier.
Multiply TR with 0.618 and 0.382.
Add or subtract the above from the open of next day to arrive at H1& H2 or L1& L2
Here is an example of this calculation
Previous day TR = 1.15
Today’s Open = 137.30
Then
H2 137.30 + (TR * 0.618) =138.01
H1 137.30 + (TR * 0.382) =137.74
Open 137.30 (Actual)
L1 137.30 + (TR * 0.382) =136.86
L2 137.30 + (TR * 0.618) =136.59

based on yesterday's out come, the standard Pivot point is still out perform this calculation.

Do you have some performance matrix using pivot point as entry/exit points?

[BullBear52x]

People like to say trend is your friend, but what is your trend? 1min trend? 10min? or daily.

here is my 1 minute trend.

and here is 10min trend, check out my blog for more cool idea

2.JPG (55.98 KiB) Viewed 9364 times

[BullBear52x]

Frankly, I am perplexed by the return for this strategy. What do you think? I appreciate your feedback!

[1]
Here is how it is calculated.
First determine the true range (TR) of security of interest (SPY in this case) from a day earlier.
Multiply TR with 0.618 and 0.382.
Add or subtract the above from the open of next day to arrive at H1& H2 or L1& L2
Here is an example of this calculation
Previous day TR = 1.15
Today’s Open = 137.30
Then
H2 137.30 + (TR * 0.618) =138.01
H1 137.30 + (TR * 0.382) =137.74
Open 137.30 (Actual)
L1 137.30 + (TR * 0.382) =136.86
L2 137.30 + (TR * 0.618) =136.59

based on yesterday's out come, the standard Pivot point is still out perform this calculation.

Do you have some performance matrix using pivot point as entry/exit points?

it originally design to trade commodities, pretty well known for day trader. but like any thing else it needs other support indications. I never have in dept experience using it, but for some day traders they claim to have a very high success rate. here is calculator for it, any more most trading platform have it, just click and play.http://www.pivotpointcalculator.com/

[Harapa]

it originally design to trade commodities, pretty well known for day trader. but like any thing else it needs other support indications. I never have in dept experience using it, but for some day traders they claim to have a very high success rate. here is calculator for it, any more most trading platform have it, just click and play.http://www.pivotpointcalculator.com/

Here is another one that calculates variety of PP, including DeMark's.
http://www.earnforex.com/pivot-points-calculator