Registered User
Joined: 10/7/2004
Posts: 2,181
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I have, for several years now, been using some of my pcf's and scans not only to find stocks that interest me but also as general indicators of what the market may be doing / getting ready to do. At the same time, I have some pcf's I've written and scans I've created that I don't use to search for stocks at all, I use them only to see how many stocks end up in certain groupings...it gives me a bit of a sense for the markets inclinations.
(I figure it must have some merit as I wrote to Mr. W to see what he thought and he wrote back telling me he was considering it for the Knights program...I was so honored!)
Anyway, here's the point for the moment, even with today's very bullish and impressive behavior, I found that my scans for Stochastics Crossing Up thru 20 on a strong volume surge was outnumbered precisely 2-to-1 by the Stochastics Dropping Down thru 80 on a strong volume surge.
Just something to keep in mind. Are we being sucked up into a bull-trap vortex? The system I use keeps me pretty safe during these times, but for the intraday folks, well, just be on your guard.
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Registered User
Joined: 12/21/2004
Posts: 902
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Interesting, Tobydad. Does the analysis of the actual number in each group compared to a trend or a universe say anything?
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Registered User
Joined: 10/7/2004
Posts: 2,181
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I don't think they are major indicators, just one more sort of confirmation. You know, if you're hearing alot of respected voices (human or otherwise) say something and then you see a lot of stocks falling into line, you're just a little more confident in your decision making.
That's the main value in them for me.
I have a pcf I call "Against the Grain". It's been amazing to me when, in a downtrend, that scan will turn up a much larger than usual number of stocks, and, sure enough, the next day or so we get a nice bounce.
(By the way, this was no major brilliance on my part, I came across this quite by accident...just happened to notice the pattern.)
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Registered User
Joined: 4/17/2006
Posts: 271
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I'm glad you wrote about this, tobydad. I've been seeing some shockingly bad plunges...with and without gaps down..and some of those gaps have been stomach churning. This evening seeing more than before it seems. Look at SI, TZOO, DTLK, EXBD, HTCH, SUNW, HRH among many others. It just seems this market's got nothing solid underneath it. Scares me. But maybe that's what makes bulls climb a wall of worry. Sure is an interesting juncture in the market!
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Registered User
Joined: 12/21/2004
Posts: 902
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the reason why I asked - Mr Warden lately has been referring to an internal analysis of the number of price up/vol up, price down/vol up, etc. of the Russell 5000 as a gauge of the health of the recent uptrend - so I've started doing that analysis and keeping track myself.
What I'd noticed was that through most of April Price Up/Vol Down was the leader, and Price Up/Vol Up and Price Down Vol Up were pretty much even, indicating, to me that the uptrend wasn't very strong internally. This changed after April 16 when the Price Up/Vol Up started outnumbering (consistently) the Price Up Vol Down. And the number of Price Down Vol Up has noticeably declined compared to the Price Up Vol Up. So I'm getting the idea that the uptrend is actually strengthing, at least internally, at least compared to the beginning of the month.
That's why I asked if, proportions aside, you were noticing anything about the absolute numbers in your observations.
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Registered User
Joined: 10/7/2004
Posts: 2,181
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This is all very interesting. I guess I can just say this, I run a small business and we homeschool our kids, bottom line, I'm not in front of the computer to trade all day. I've become accustomed to seeing certain size "batches" of stocks in my strength oriented scans on evenings after the market is up. But I'm not seeing those numbers.
It was, of course, heartening, to hear that the market was up so strong today and on increased volume. And I haven't had time to look at the charts of the indexes. I just want us all to be careful that this is not a somewhat prolonged exhaustion push up...sucking in as much money as possible just before a nosedive.
Don't mean to be Chicken Little here, just thinking some caution blended with our enthusiasm for all the good looking charts out there may not be a bad thing.
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Registered User
Joined: 1/28/2005
Posts: 6,049
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I'm thinking along the lines of hohandy.
A strong market will increase the candidates on the
bull side and decrease the candidates on the bear side.
Lets say the day before there are 4000 stocks above 80
and 500 below 20. On the next days scan you see 100
cross down thru 80 and 50 cross up thru 20.
It looks like there are more headed down by 2 to 1 but
it is a much smaller value in percent terms.
(2.5% turning bearish vs. 10% turning bullish of the
candidate stocks)
Of course I could be wrong. Just a "possible"
explanation.
Thanks
diceman
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Registered User
Joined: 10/7/2004
Posts: 2,181
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That's a great point, Diceman. I've actually tried graphing the results from the scans before. I just didn't keep up with it like I should have...might have given me more insights akin to that which you are describing.
Thanks.
And, of course, I'd love nothing more than to be wrong about my concerns...that would be great news for us all.
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Registered User
Joined: 12/21/2004
Posts: 902
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I hear you Tobydad - and if you do the same analysis over a period of time - and I think you said you've been doing this for years - you do notice certain trends and are able to draw conclusions and develop a feel for how it fits into the scheme of things. So I don't think you're being Chicken Little at all and I do appreciate your sharing your observations with us.
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Registered User
Joined: 1/28/2005
Posts: 6,049
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tobydad
Thats the problem with keeping "accurate
numbers". Its too much work !
I cant tell you how many things I started and
got tired of or distracted from.
(then wished I had it at some turning point)
Thanks
diceman
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Registered User
Joined: 4/18/2005
Posts: 4,090
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Great ponts Tobydad. I have similar scans that I got through the Technitrader system. I tend to be more visual so i'm working on a way to graph theri results over time in excell and compare it to various indexes and my equity line.
however if you don't have blocks check out the market indicators in the knowledge base. count percent new highs, count percnet new lows McClellen oscilator, Advance decline line and my favorite %stocks above their moving average for what ever watchlist you want. I like to set it tight and try to catch the intermediate swings. Pull it up next to the QQQQ and play with its settings till it seems to give a decen't signal and set the watchlist to nasdaq 1000 component stocks (or Dow, russel, nyse whatever you like).
I was trying to get Worden staff to help me write this indicator when they pointed out that it existed already. But my idea was such that the indexes, especially the DOW are weighted and on their faces not a great measure of market trend quality. A few big gainers coult push past a hoard of small loosers... averaging. The idea for me came while considering a school of fish. they basically go the same places togeather as a colective of individuals with their individual and collective agendas. When something spooks the school there is a moment of confusion when the leaders sink back into the crowd before the crown turns. In nature it happens very quickly but int he market it takes a while ... which varies depending on your time frame. So as stocks begin to cross down through their moving averags of whatever period you select you can see it on this indicator.
I also played with stochastics at a wide settign as an exit strategy in blocks to catch the intermediate swings and often they came close. So a scan could be made to help point out intermediate tops.
Wehave been on a tear lately and I figure that we are due for a consolidation or minor retracemet soon. I don't think it will be as bad as before..but with all the cautious ones taking proffits it must have an affect. But don't forget that there are millions of people who see the Dow as the market and have a habit of buying high, and more who see the dow as now suported by it's prefious resistance and having survived a shakeout.
SHARKATTACK: I was in TZOO, bought it the day before yesterday. 37 consecutieve proffitable quarters and recently crossed resistance as I saw it and pulled back just for me.
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Registered User
Joined: 9/21/2005
Posts: 566
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Tobydad, did your indicators give you a bullish read in August of last year? Did you feel they alerted you to the up move? Also what kind of read did you get prior to Fed downturn of this year?
Thanks.
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Registered User
Joined: 9/21/2005
Posts: 566
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By the way, I have a couple simplistic indicators that are not designed to give me market direction - just used to help find good short setups. In any event, got an interesting indication a couple weeks prior to Feb 27 that markets were weakening by count and chart patters (had too many to even look at). Lately both scans are showing some signs of life again, so if we get a meaningful downturn in next week or two I am really gonna start paying attention to them.
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Registered User
Joined: 3/21/2006
Posts: 4,308
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I too have scans that I run to gage market momentum and accumulation. And I agree with Hohandy also, my scans are very strong and healthy right now, pulling a high number of very nice looking charts. If this is a bull trap then they have this bull by the horns
With Stochastics I find that different settings will give varying results. For example view the Nasdaq on zoom 3 with stochastics 39,1,1 in the middle window and in the bottom try stochastics 8,3,1
If a given scan is showing more stocks dipping below the 80 on the fast stochastics (8,3,1) this could be the results of more momentum stocks just experiencing a pull back or swing pattern (SIGA, AOI) are just a couple. My momentum scans are showing a lot of stocks in minor swings right now and this could be what Tobydad is seeing (I could be wrong). There is positive criteria being met for these stocks to end up in the scan in the first place..
But of corse there is no sure thing in the stock market and we are probably all wrong any way...
(IMO)
Apsll..
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Registered User
Joined: 10/7/2004
Posts: 2,181
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jcfla7;
I'm sorry, I don't keep track of the performmance of these indicators; I just know that when they tell me something it's usually worth listening.
And I find it interesting that you have seen a similar pattern in your own scans. I think it's a fairly simple concept to which we might all give heed.
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Registered User
Joined: 4/18/2005
Posts: 4,090
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Tobydad
Do the scans make provision for those stocks that have already crossed up or down? Today is givving me a ton of buy signals. but seeing the recent run the market has made has me jittery...... but then a strong bull move is a strong bull move.
Ironically most of what I was in was down today... but I see tons of stuff that went up nicely. Makes me wonder about my pickings... maybee really jumped the gun a bit.
Anyway I'm wondering if your STO scan could drop in numbers becasue many stocks already crossed up and are now in travel mode?
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