Friday, December 14, 2007
Attention, Users of VolSum, EVRAA, and VolShift
I have coded a
number of unique volume indicators over the years and a kind user just today emailed me to tell me that as of the December 2007 release of Ensign Software, the templates for VolSum, EVRAA, and VolShift are no longer working as intended. Unfortunately, I cannot at this time update the templates, but will let you know when new properly functional templates are uploaded. My very sincere regrets!
Labels: ensign, indicators, templates, volume
Saturday, April 21, 2007
following up: Chick Goslin's Method
Thanks to a recent comment from morganp to a
post from March 2005 on Chick Goslin's method, I now can say there is a template available to Ensign users for Chick Goslin's method. Ensign users can download directly from within Ensign the
Q&A Template 1296-Concurrence (click only if you have Ensign).
There is some meaty discussion regarding the technical aspects of the implementation, which you can read at Howard Arrington's Q&A Knowledge base
article on the topic by clicking on #1296, which will open a new page in IE.
I have created a
Chick Goslin page in my Ensign collection that collects all this for reference and easy access.
Thanks morganp! You're a champ!
Labels: ensign, indicators, templates, trading-method
Tuesday, October 17, 2006
Follow-up: INDU & RSI
Following up on
prior post. The early action pushed the INDU hard into a mid-day reversal. (See inset on image) During that flush, "classic" RSI pushed thru the first (Oct 17th) trendline, into the next one down, and almost tagged the "Bump" line.
The midday reversal canceled all that and the close was on the second (Oct 20th) trendline. Notice that the fisherized RSI didn't make a perceptible budge.
So...still in strength, reaction down is still positively divergent (ie, pullback not full blown reversal).
Labels: chart-analysis, indicators, RSI
Saturday, October 14, 2006
INDU Daily, an RSI study
Hey, how 'bout one of my own charts? :) Here's a study with "Fisherized" rsi and a classic, but fast (7-period) rsi.
There is already a negative divergence of the rsi related to the current high with respect to the rsi from the prior high (5/10/2006). It could resolve itself two ways:
(1) bust thru the prior resistance line
(2) reverse
The inflection window for either would be 10/17 - 10/20.
The Fisherized rsi is useful for hot trends, where it will stay pinned (OB or OS). It is a "do not fade til you see the whites of their eyes" type of thing. Even a "dip" below 98 could be just that, a dip. Full disclosure: I'm still only day-trading and using Daily charts for "big picture". I gotta say, though, I kinda miss swing trading sometimes.
PS-- not going to go into the rest of the chart voodoo, except to say you'll recognize the
Alan Box (Yellow is an annual),
rabbit's xSwing "big bollie" of 180, showing big time hot trend as price is riding high above it, and VolSum extremes, the Green/Red little arrows.
Labels: chart-analysis, Dow-INDU, indicators
Saturday, April 08, 2006
The Hull MA and Regression Curves
I've written a short article comparing
the Hull MA and Regression Curves. I have long used regression curves as they embody a concept central to my thinking: actio-et-reactio, the name of this market commentary page, the first "law" of physics, and the idea behind median lines.
Here is the complete article.
Labels: indicators
Monday, February 20, 2006
Tinkering on President's Day: ADX Template Tweak
Please, someone eliminate ALL market holidays!! Too much time is a very serious liability for a market tinker (wink wink nudge nudge).
I've done some tweaking of the
ADX with Alerts template.. In addition to adding two more templates, I've included a few more comments here and there, so it may be worth a quick read.
My favorist tweak is ADX with Alerts, Version2, for the minimalist. It shows the Buy and Sell signals but replaces all the indicator lines with a "Chopzilla Band" that is White for Trending, Red for No Trend, and Orange Hash Overlay when ADX is below both DMI values. The later is for the trader that wants only the best signals. I can't vouch for how effective it is, however.
Here is the minimalist chart
I've also included Version 1, which I think of as for the technician that likes to see *everything*:
--Normalizes the sub-window to a 0-100 scale.
--Adds near-background colored DMI value displays.
--Adds a pale orange band when ADX is below the DMI values
--*Does not* show Buy and Sell signals when ADX is below 20.
The Normalization and DMI line displays are style preferences and easily removed with simple clicks on the topmost DMI study pane. The ADX>DMI and removal of signals are, IMO, keepers.
Labels: ensign, indicators, trading-method
ADX with Alerts, an amg Ensign Template
My favorite market technician, second only to Richard Wyckoff, is Welles Wilder. His contributions include RSI, PSAR (Parabolic Stop & Reverse), Average True Range (ATR), the 'Delta Phenomenon' (of which PVAC is a form), and the Directional Movement Index group (+DMI, -DMI, and ADX), the subject of
this article (with Ensign template).
EXAMPLE (click to show full size in a separate window)
Labels: ensign, indicators, trading-method
Saturday, February 18, 2006
Jack Chan's Technical Analysis
Are simplicity and consistency traits you would like to incorporate in your technical analysis?
Jack Chan's approach embodies both cleanly, with a particular focus on Energy and Gold as when as Tech (Nasdaq). His website,
traderscorporation.com offers a PDF of the acronyms he uses, along with his 2005 Performance summaries, which give further insight into his views. I am not a subscriber.
In a nutshell, he uses Trendline breaks coupled with MACD crossovers, along with classic 50/200 ema directionality. His methods are amply illustrated in
his Stockcharts.com Public List and there are many samples of his annotated views over at
his Gold-Eagle.com pages. Here is a sample chart:
Labels: indicators, trading-method
Saturday, May 14, 2005
Price - Indicator Divergences
Traders spend hours tinkering with methods that will give them an edge better than simply flipping a coin. One such edge is to use an indicator on price. Depending on the complexity, indicators are at least one step removed from price. Even so, unless you are trading at lightning speed, indicators can be a useful aide to decision making.
One aspect of RSI, MACD, stochastic, CCI, and similar oscillators is that, while intrinsically lagging, they will set up divergences with price that can be exploited by the trader.
In the example at the end of this article, taken from todays ES e-mini, I've marked up various
Divergences and
Reversals. Divergences are fairly well known and, for many, easily spotted, as price goes in one direction and the indicator goes in the opposite. It is called a Positive Divergence when in a downtrend and a Negative Divergence when in an uptrend.
Reversals may take more screentime to recognize, but from my swing trading experience, I've found them to be patterns well worth study. Connie Brown discusses these in her book,
Technical Analysis for the Trading Professional, and credits Andrew Cardwell with teaching her the method. While called a reversal, they often appear within a range and signal continuation after a short pullback reversal. Reversals are also called "Hidden Divergences" and
Buffy's article goes into further depth on both. Additionally, there are scores of examples at
dacharts here and
here for further study.
One useful aspect of these Reversals is that they provide a measuring target, as shown below.
Finally, here are some divergences found on a tick chart during today's trading. These two indicators are RSI and Stochastics, the shorter one giving more signals in this case, but virtually any indicator will generate divergences.
Labels: indicators
Sunday, May 01, 2005
Expanded RSI scale
Long time users of RSI know that, although an oscillator, RSI also channels, rarely staying in the 20/80 extremes for very long, but staying within a 45/65 or 25/55 channel. Constance Brown shares this and other Andrew Cardwell observations on standard RSI in her book
Technical Analysis for the Trading Professional. This feature, while a bonus, can also be frustrating as the indicator often flattens in the center of the channel.
An
Inverse Fisher Transform of RSI is one alternative. As you can see in the chart, inflections at major reversals are captured and it stays in the zone above 80 (or below 20) while trending. However, there is some loss of intra-trend oscillations ("slings").
To bridge these two options, another solution is to expand the indicator scale, which sort of "magnifies" the plot. A benefit if sharing your work with others who may be unfamiliar with the Fisher-ized RSI.
This template for Ensign users does just that.
Labels: ensign, indicators
Saturday, March 26, 2005
Chick Goslin, SMR and IFT
SMR and
Trading Day by Day, Chick Goslin's Intelligent Futures Trading (IFT) methods
When I first heard his name, I couldn't help but think of a family of swans, the chicks trialing in the wake. The cuddly image was shattered by the picture of him at his site: a burly smiling ex-Marine crouched down next to his shaggy dog friend. He has acquired a number of faithful adherents on the web, particularly at the
trade2win boards, who as of this writing have over 22 pages of reviewing, demystifying, and at this point, documenting their use of the method.
Goslin's IFT might sound complicated, but striped to its essentials, it is a straightforward method with a very nice number-weighting of the long, medium, and short term signals the system generates. I haven't backtested the results, but each piece of the system is simple and will be recognized by most technicians and market hounds.
The 3-point System is outlined at SMR in
this Word file. NOTE: it is labeled as a .txt file, but it is best viewed as a Word file as Notepad will expose the internal code as gobbledegook.
It may sound mysterious as it is sprinkled with his own nomenclature of the elements. Can you fault him? We all do that with our methods! However, enough of the method can be gleaned to get going. My intent is to present a TA tinker with enough to create the template on their own and find out if their interest is peaked enough to buy the book and explore in depth the methods and nuances Chick has developed. The book reviews indicate there is value.
The basic indicators:
- Trend Line is a 49 SMA of price.
- DL is the "Dotted Line" Intermediate Term indicator, which is a 16ma of the 3-10 MACD.
- SL is the "Solid Line", ie, Short Term indicator, which is the 3-10 MACD.
An imaginative leap is taken for position trading. Chick assigns each of the three main components a value of +1, 0, or -1 depending if the indicator is moving up, sideways, or down as follows:
- Long Term49/50 sma (1 pt), also called the Direction Line
- Intermediate16ma of 3-10 MACD, also called the Confirming Line (+/- .5 trend, +/- .5 when above/below zero), and can lag 5 days
- Short Term3-10 MACD value (1 pt), aka the Timing Line
One then counts only the positive contributions when the trend is up, or only the negative values when down. +/- 2 is considered bullish or bearish, and values between +/- 1.5 are considered neutral (ie, no position).
Finally, to eliminate lag and anticipate a change in the Position Indicator, the past values of both the 49 sma and the 16 ma on the 3-10 MACD are reviewed to see if a lower or higher value is being "dropped" off by the ma calculation.
All things considered, a very sensible approach.
Labels: indicators, market-buzz-gurus, trading-method
Saturday, January 22, 2005
Keltner Channel and Average True Range
I got an email from a friend who wrote
"I'm trying to learn about Keltner Channels - there are a few sites on the net but what I'm searching for is parameters I can use at Stock Charts that would 'substitute' or act as a Keltner Channel indicator."
Keltner bands use True Range (H minus L of each bar) and Average True Range (H-L average of # of bars) to calculate the bands. Like Bollinger Bands, a typical cycle length is 20 bars.
Also like BBands, volatility is what is being tested. Keltners use the TR and ATR as a measure of volatility whereas BBands calculate the statistical deviation of # bars from the average. Both methods use touches of the band to signal "something is afoot".
The thing to remember about ATR is that its direction doesn't directly match price direction. A rising ATR just means the bar H/L is widening (bigger volatility). A flat ATR means the HL hasn't much changed. So a flat ATR is followed by a rise, and following a large ATR move is a period of decreasing ATR. It is the CHANGE in this rate that is of interest and what Keltner strategies exploit.
One way using to simulate Keltners is to a 20-bar ATR as an indicator. Because Kelter bands use the change in ATR to draw the bands, you can use Trendlines on the ATR to indicate changes. I like to draw TLs across peaks/troughs as well as rising bottoms and falling tops. Where a horizontal line stops the movement and reverses, you drop a line down to the price. Where the ATR breaks a TL, you drop a line. Sounds like fishing.
I marked up a weekly COST chart to show what I mean. I added a BBand on the price and a couple of indicators, not that you need them, but one of them might provide another measure of confirmation.
I've marked the inflections (ATR breaks, reversals) with red dashed lines. You can see some are BBand touches or even MA touches, both useful to enter or exit positions. In addition to the clues from the BBand, you can also use CCI crosses of +/- 133 (or +/- 100 or even +/-200 when *really* OS/OB), Sto5 cross 20/80, or the MACD 3/10 cross, as further confirmation and/or entry/exit aides. Notice that the CCI on this chart is using 14, so the signals will look "early" relative to the ATR20. You can adjust one or the other or both and study a combo that works for you.
Not all of the ATR signals pan out as reversals, but even the ones that seem wishy-washy signals ended up as continuation signals. Like all methods, the more you use it, the more you'll see its particular nuances. I will be following this post with a comparable chart using Keltner Bands created with Ensign Software.
Labels: chart-analysis, indicators
Wednesday, January 19, 2005
AD Volume Divergence & Total Volume vs. Up/Down
Following up to the earlier posts (
1st,
2nd) on using VOLD for volume divergences, here is yet another instance of a positive divergence in Volume, ie, Net AD Volume was higher for a comparably lower (or in this case, near equal, price.
I am including this chart showing Total Volume. You can see that total volume was in a general decline over the past few days as the SPX tested lower levels. However, yesterday's volume was very robust. The little horizontal lines are for times, the green being noon. You can see volume pace was also running faster. In case you wonder, the "pink" or "blue" bars are nothing special. They are pixel artifacts: overlap of RGB colors.
Labels: indicators
Thursday, January 06, 2005
update to the Advance-Decline Study
This updates the image below with the latest Advance-Decline Volume data. So far, the Reversal Divergence is holding. It's tenuous, however, in that price is still in the lower range of the retrace (see the daily).
Labels: chart-analysis, indicators
Tuesday, January 04, 2005
Advance-Decline Volume Study
John Wooden, and no doubt other basketball coaches, say to watch a player's hips, not their heads. This sound like the likely origin of "head fake". Well, volume is to price as hips are to head. They are both connected, but volume will tell you where the player is moving. Price is always "right", but it will move where volume takes it.
But enough of basketball, here is a study using $VOLD (Esignal), which is the difference between Advancing Issues Volume and Declining Issues Volume. Divergence studies are never exact, that is, there are often time lags. Those who use RSI or Stoch are familiar with that. So, with that in mind, shown below are various divergence signals using $VOLD vs. $SPX. There is a potential for a Positive Reversal Divergence, in play just now. But that means price must reverse, and stay so, with a corresponding rise in $VOLD. There are clues in the daily chart that indicate a potential rest point or short term reversal also. Time will tell.
Labels: chart-analysis, indicators
Thursday, December 30, 2004
One more example of ADVolume and TICK
click for full size image
Labels: chart-analysis, indicators
TICK is very tricksy!
$VOLD is the Esignal symbol for Advance Issues Volume minus Decline Isses Volume. I believe it to be a much better indication of "bias" than TICK, or the simple A/D line. This chart demonstrates how TICK and VOLD "interact". Obviously they are not correlated, but one can see that a whole lotta TICK (in this case a move from 1000 to -92) didn't put much of a dent into the VOLD, indicating that simple re-distribution is going on, rather than a prelude to a flood. Here is the comparable 1m ES chart for reference only (I do not use a 1m chart in my trading).
Labels: chart-analysis, indicators
Thursday, September 09, 2004
Heikin-Ashi Candle Charts
Aside from many chat sites discussing how to code the special candles of this method, there is scant else on the web regarding this method. The earliest mention I found is by Forex trader and Ichimoku chartist Yasuji Yamanaka, who in addition to publishing many analyses using this method, also wrote two English language articles on heikin ashi (
pt. 1 and
pt. 2, pdf files). Heikin-Ashi means "average bar" and is, according to Mr. Yamanaka, a method introduced by a Japanese commodities trader who, of course, made a fortune with it. Also according to Mr. Yamanaka, it is a derivative of the Ichimoku method, after Ichimoku Sanjin, a pseudonym of another smart cookie. In addition to Mr. Yamanaka's articles, there is also a well-popularized article by
Dan Valcu, writing in TASC. To see how they look, try the slideshow below, showing the ES or SPX in various time frames. In addition to the tailored indicators I use, you will see heavy black trendlines on some of the charts. These are the new Auto-Trend lines, automatically discovered by the
Ensign program, one of the many new features introduced by Howard Arrington, Ensign proprietor and chief programmer, this month. The simple rules for trading heikin ashi are summarized in the following table, attributed to Mr. Yamanaka:
Previous • Auto/Stop• Next
Labels: indicators, trading-method
Tuesday, January 27, 2004
Simple Trend Trading: Fibonacci, MACD, STO, RSI
There's quite a bit on this chart, some for targeting, some for learning.
(A) In addition to yesterday's lesson on the Regression Channel to gauge pullbacks, Fibonacci retracements are also helpful. While NOT A RULE, a move off the 38.2 is strong, a move off 50 at times results in sluggish/congestion, and a move below 62 is often weak.
(B) I've arranged the indicators in an order of priority:
(1) Chose a sufficiently long MA (34ema) for direction and a shorter MA (13ema here) for early indication of either trend change or pullback entry opportunity. Other popular combos are 5/25, 9/18, 9/30, 8/13, etc. Suit your style.
(2) MACD-- This is a trend indicator: strong above Zero, weak below Zero, as I've often written about. 'Divergences' on MACD can be deceptive. When the long (34) MA is UP, the lower MACD 'divergence' is often a 'wind-up', ie, a pullback.
(3) STO -- Not always my favorite as it is very misused and misinterpreted. Best to USE IT WITH THE TREND, ie, a reversal out of oversold when the long (34) MA is UP is a decent buy. One could use it reversing out of overbot in an uptrend as an exit, but you may leave $$ on the table or churn up commissions. Experiment and find your own comfort zone.
(4) RSI -- A favorite of mine, used largely for setting price targets from divergences. The channel zones indicated (45-80 and 35-60) are only rough, draw them in for each market and time.
click to open in separate window
Labels: indicators, RSI
Sunday, January 18, 2004
Monthly SPX observation using PPRO
The purpose of this chart is to show that a cross ABOVE the Zero line is a more powerful indicator of a SUSTAINABLE rally. Much is being made of this run to the mid-1990s run. Aside from fundamentals, of which there are more than a few differences, this one difference is, IMO, considerable. Note that the current run was off a cross BELOW Zero, where PPRO (a percentage-based MACD) remains. A reversal below that crucial zero cross would validate the view that this has been a so-called "bear market rally". On the other hand, a continued climb up, of course, sets up a bullish Zero cross, from which continued bullish gains can be made. This already happened on a PPRO using shorter MA settings, where a hook at this point would also signal a correction, albeit on a relatively glacial monthly scale.
click to open a larger window
Labels: indicators
Monday, December 08, 2003
Monday: +RSI Reversal is getting fulfilled
Shown below is today's 60min chart, which shows the +RSI Reversal being fulfilled. It targets 1075.4, but there are reasons to suspect 1071 may be all it yields:
(1) CCI entered overbot (not bearish yet, but did it too quickly;
(2) MACD is reversing, but sub-zero (can be a weak bullish signal)
(3) Relatively low participation in the bullish move suggests it may not be sustainable.
FOMC meets tomorrow with minutes released on Thursday, both of which may be a sufficient catalyst for some more selling. This is a speculative scenario, so as always, it's best to watch what price DOES not what one thinks.
click to open in new window
Labels: chart-analysis, indicators, RSI
Wednesday, November 05, 2003
Harmonically, a hum dinger of a day
For traders using geometry (bisects, Fibonacci, patterns), there are some days that come together just right. Today was one of them. This piece focuses only on the moves after the opening flush.
Click here to open the chart in another window (easier to follow the comments)
The chart below is a 1000-Tick chart. I actually trade off a 400T or 550T chart using a 150T or 266T chart as a finer vernier. However, I couldn't make the 550T chart "small" enough and used the "Lock Studies" feature in Ensign to leave my studies from the 550T chart on the 1000T chart. Pretty nifty.
The colorful band at the between the price & indicator pane are equal-hour bands. Tick volume is not constant in time and this band gives some insight into trade volume. Short bars mean very little trade volume (more risk) whereas longer bars indicate good liquidity.
Bisects: [1] There was an early "yellow" bisect that let me know when the trend changed, confluent with a tradeable RSI divergence.
The blue bisect was drawn in at the 13:55 reversal. Remarkably, this bisect would prove useful for the remainder of the session.
Fibonacci: [2] The reversal at the low allowed me to sketch in possible Fibonacci retracements from the fall off the morning high, which I use to aid me judge the strength or weakness of price moves.
[3] The first move off the low to the .382, where it reversed, allowed me to sketch in a smaller Fibonacci retrace of *that* move, which along with rising RSI/MACD indicated a low risk long entry.
Patterns: The Low, and next two reversals, allowed sketching in the first AB=CD [4], which reversed just shy of its 1.0 target (1048.75), which itself was a confluence with the 50% large Fib, and the 25% inner parallel of the blue fork. Not exact (the angle of ascent was also a tad too sharp), but coupled with a negative RSI, a good pullback signal.
Not shown (there are already too many lines) is another mini-Fib of the short leg, which showed a 50% pullback, confluent with the .786 level of the prior leg.
I don't pyramid my intraday trading, but this reversal was a low risk long for another trade, and the place to add the second AB=CD pattern [5], which was confluent with a spike touch of the lower ML.
This was the most exciting move of the day, moving very rapidly, and consolidating just above the AB=CD target, within a quarter point of the big 61.8% Fib. While still strong, intraday for me is more about getting the meat of a move and not drinking the last drop out of the bottle. That was my last trade today.
However, for real party goers, the Positive RSI Reversal (aka "hidden" divergence) [6], along with a
WILD EPREM move signaled the end of day fireworks, engendered by the anticipation of the CSCO earnings report after the 4pm bell.
All in all, one of the few days where so much comes together. A day to savor but to not "expect" again as in my experience, it doesn't happen this way that often!
By the way, the lines were (1) cleaned up a bit (eg, took out the extraneous Fib targets that weren't touched) (2) not as confusing when trading in real time as the chart is larger and the old stuff "falls off".
Labels: chart-analysis, indicators
Thursday, January 17, 2002
Making an Inside Day
Looks to be making an
Inside Day across the market indices
Labels: indicators, market-calls-dated
