| Welcome Guest, please sign in to participate in a discussion. | Search | Active Topics | |
Registered User
Joined: 4/18/2005
Posts: 4,090
|
I'm looking at AMD and thinking that sooner or later it will bounce and make a run for those gaps. I have NO fundamental knowledge about them but Feb 27th apears to have thwarted a previous attempt to rally.
What do yo usee gonig on in MacDH. I at first thought it was a significant positive divergence happening. But when you compare it to Novembers actions it looks like normal activity.
I also use the 20,40,50 Exp ma's and they pont to a reversal soon or just a retraction in to the slingshot for another downwrd run. I suspect it will be up..
Oh I read further and now understand that A "hound of the Baskervilles" is a failed divergence entry setup.. in which case becasue something is seriously wrong stop losses could be considered to be a "stop and Reverse".
|
|
Registered User
Joined: 1/28/2005
Posts: 6,049
|
Scott
You may want to "fool around" with this.
Bullish MACD divergence PCF.
(MACD histogram 12,26.9 up from 10 bars ago and price down):
((XAVGC12-XAVGC26)-(XAVG(XAVGC9,12)-XAVG(XAVGC26,9))>(XAVGC12.10-XAVGC26.10)-(XAVG(XAVGC9.10,12.10)-XAVG(XAVGC26.10,9.10)))AND(C<C10)
-----------------------------------------------------------------------------------------
Bearish MACD divergence PCF.
(MACD histogram 12,26,9 down from 10 bars ago and price up):
((XAVGC12-XAVGC26)-(XAVG(XAVGC9,12)-XAVG(XAVGC26,9))<(XAVGC12.10-XAVGC26.10)-(XAVG(XAVGC9.10,12.10)-XAVG(XAVGC26.10,9.10)))AND(C>C10)
-------------------------------------------------------------------------------------------
Realize that this is not the "classic" definition of divergence but
is simply MACD vs. price.
-------------------------------------------------------------------------------------------
The bullish one seems to do good with strong stocks and the
bearish one with weak stocks.
---------------------------------------------------------------------------------------
You can either scan with these or use them in a percent true
indicator.
good bullish calls 2006 to today:
ALB
BID
NU
PCP
(and so on)
---------------------------------------
good bearish calls 2006 to today:
PWAV
HOV
FBN
PTEN
(and so on)
--------------------------------------
Because good bull and bear calls are dependent on price action.
It might be a good idea to use the moving average filters.
(only stocks in bullish or bearish mode would be considered
for bull bear calls)
Thanks
diceman
|
|
Registered User
Joined: 4/18/2005
Posts: 4,090
|
Thanks Diceman.
You have been a great help and inspiration. I'm coming around to your line of thinking in that divergences are up in the air ... but I do think they have value. I'm thinking to focus my self on trend following rather than picking can callig bottoms and tops...
|
|
Registered User
Joined: 12/21/2004
Posts: 902
|
QUOTE (scottnlena) I'm looking at AMD and thinking that sooner or later it will bounce and make a run for those gaps. I have NO fundamental knowledge about them but Feb 27th apears to have thwarted a previous attempt to rally.
What do yo usee gonig on in MacDH. I at first thought it was a significant positive divergence happening. But when you compare it to Novembers actions it looks like normal activity.
I also use the 20,40,50 Exp ma's and they pont to a reversal soon or just a retraction in to the slingshot for another downwrd run. I suspect it will be up..
Oh I read further and now understand that A "hound of the Baskervilles" is a failed divergence entry setup.. in which case becasue something is seriously wrong stop losses could be considered to be a "stop and Reverse".
WOW - cool chart! I don't see a MACD-H divergence on the daily chart, *but* I think it's awesome that it hit a major multi-year low in early April and the MADC-H never went below zero. Elder refers to that as "breaking the back of the bears" or something like that and would have been an incredible signal to get in.
On a weekly chart, notice how the MACD-H hit it's lowest point on Feb 7. Even though the price went down further for another 2 months, the MACD-H went up from that point - I count that as a divergence. Better yet, compare the weekly MACD-H at the April low to the MACD-H at the previous July low - here's what Elder says on p 106 of Come Into My Trading Room - "Go long when MACD-Histogram traces a bullish divergence, that is, when prices fall to a new low while the indicator ticks up from a more shallow low." - and that looks like exactly what happened with AMD.
|
|
Registered User
Joined: 12/21/2004
Posts: 902
|
Diceman - I must second Scott's praise and appreciation both of your ideas (and willingness to share them) and the interesting tools that you come up with for us to use.
As I've explained in other posts, my methodology is to go long working trends, and rather than relying on MACD-H divergences for overt trading signals, use the absence of bearish divergences as confirmation of trend strength - so this is a very cool tool to use for quickly screening out those MACD-Hs that are misbehaving. Thanks!
|
|
Registered User
Joined: 4/18/2005
Posts: 4,090
|
DICEMAN
WOW, These are cool! Ididn't get a chance to get into them till Saturday morning. Using this as an indicator on BID I noticed that it spikes up and at time when the MACd isn't clearly looking like a buy signal, BUT big prise swings seem to follow it's spikes.
Just flipping through some random charts BEBE shows a nice spike .. right where I got whipsawed... but is looking buyable again.
I'll try to convert it to blocks.
How would you suggest using them to get the most out of them?
|
|
Registered User
Joined: 1/28/2005
Posts: 6,049
|
There are so many ways.
The tickers I supplied. I would consider the
"classic" use. The indicators seem to trigger
in reactions to uptrends/downtrends.
Unfortunately they can also trigger in the
wrong direction.
The symbol T is a good example:
Good buy signal MAR 07
Good buy signal NOV 06
(note the strong uptrend)
Bad signals thru MAR 06
(note stock not in strong up trend)
So one idea would be to filter price trend.
Since most triggers will be in a down trend.
A downward sloping trendline could be
drawn as a buy trigger.
-----------------------------------------------------------------------------
In the style of tobydads 1 cent above the highs.
I would look for something like a breakout of
a 10 bar high. (this will keep you from entering
downturns)
C>MAXH10.1 (for example)
-------------------------------------------------------------
Another idea is to look for strength and "classic"
trendline support.
In the all stocks watchlist there are 501 stocks true
for the bullish condition.
I sorted them by a 200 day linear regression percent
slope. Then looked at the charts for "classic pullbacks"
and eliminating low priced junk and "unnatural" declines.
I came up with:
PTT
PRGX
BBI
IAX
SYX
OMRI
IGTE
as "stocks to keep an eye on".
(of course with the trick we are up something like
19 of the last 21 days)
So this would be the case of using strength
and your eyes as a filter.
---------------------------------------------------------------------------
More ideas on trend strength and volatility expansion
can be found here:
Diceman, question
Realize that all values supplied by me are off the top of
my head. (and maybe could be improved) I'm just trying
to steer you into the possible directions you should be
thinking.
Thanks
diceman
|
|
Registered User
Joined: 4/18/2005
Posts: 4,090
|
Thanks.
Just for clarit's sake a "buy signal' with this indicator is a sharp turn up? or a complete spike, or a spike that makes to the top of the screen?
|
|
Registered User
Joined: 1/28/2005
Posts: 6,049
|
They are in true/false form.
MACD up and price down
or
MACD down and price up.
So for example with a percent true indicator
you will see a spike up.
Thanks
diceman
|
|
Registered User
Joined: 4/18/2005
Posts: 4,090
|
right I forgot to replot it as a % true.
|
|
Registered User
Joined: 4/18/2005
Posts: 4,090
|
So in the case os AEHR and GROW what is it telling us.
On Grow ou see how it spiked up then traveled falt and then fell and came back up again. that is several candles in the consolidation that are meeting the criteria? Sometimes it looks like the spike is gonig down.. but i'm using the bullish formula. As I understand it shoudl hover off the bottom and then spike up and fall back when the criteria are met.
|
|
Registered User
Joined: 1/28/2005
Posts: 6,049
|
GROW signaled bearish from 4-10 to 4-17 then fell.
AEHR has signaled bullish now.
However AEHR is a weak stock. (flat)
Remember this is signaling true when the MACD-H is
up over ten bars and price is lower over ten bars.
(bullish)
Also when MACD-H is down over 10 bars and price
is up. (bearish)
All the indicator tells you is that the condition is happening.
Notice in the examples provided by me. Strong trends are
underway. You want to use trend filters and entry/exit methods
to put the odds of success in your favor.
To me AEHR would be off the table. It is too weak no matter
what any indicator says.
Re-read my examples above and my reply to jcfla7 in the
"diceman question" post.
Thanks
diceman
|
|
Registered User
Joined: 4/18/2005
Posts: 4,090
|
Just to let Those who might be niterested know.. Craig converted these to a blocks indicator for us.
%True indicators in Blocks.
In terms of Filters for trend i was thinkign either
your bullish and Accumulation. Recovery may work as well but possibly get you buying still in the bottom .
Or something a little shorter term?
C<AVGC20 and C>AVGC50 Plus volume filters, optionable (for liquidity) etc etc.
|
|
|
Guest-1 |