Stan Weinstein's Stage Analysis

[isatrader]

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.

 

[Moonbeamzz]

Thank you isatrader, I think your posts are great.
Cheers
Moonbeamzz

 

[isatrader]

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)

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

 

[lplate]

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

 

[isatrader]

Attached is the updated major equity index charts and relative performance table

 

[isatrader]

Copper (HG)

This weeks close in Copper (HG) saw it move back close to it's recent swing low and close well below the 3 year trendline, which has had a number of attempts at being broken over the last few years, but has finally given way. So if Copper closes below the recent swing low to break horizontal support also, then I'd say it was making a new Stage 4 breakdown.

Relative performance versus the S&P 500 continues to be weak and the cumulative volume is below the November 2012 lows which isn't a good sign either. So this is one to watch in the next week as it has implications for the equity markets. Attached is the weekly and daily chart.

The rest of the updated charts are on the new thread.

 

[isatrader]

Soft Commodities - Stage 4 Breakdowns

A number of commodities took a big hit yesterday and made Stage 4 continuation moves. Corn (ZC) was one of the worst hit, but Wheat (ZW), Soybeans (ZS) and Soybean Meal (ZM) all had strong down days, potentially beginning new Stage 4 continuations also. Oats (ZO) was also notably weak but is still in Stage 3 for now.

Attached is the Corn (ZC) weekly and daily charts, and the P&F 1% chart.

 

[jamateuss]

Hello Everyone... !
I 've just readed Stan's weinstein book n i've learn a lot of basic concepts there. Even though I'm new in this subject, Overall i understood his methods... However, there are some questions i have on How to look for the stocks...

From the book, I know i must check:
1st, the market.. and determine whether it's bullish or bearish..
2nd, the sectors.. Look for the best ones... (in stage 1 or beginning stage 2, etc)
3rd, the industries... look for the best ones.. (")
4th, Look for the best share ... (")

But, I wonder how can i do this procedure by internet?
I can easily look for the stocks and the markets' graphs with yahoo finance... though icant see the sectors (they just show a record of the last 5 days...so, it's not what i need..)
So what i do, is to look for the sectors in "bartchart.com", but then i try to compare these with the industries and sectors from the "yahoo finance" stock screener list , but they aren't the same... the names are different.. or there are much more industries and stock in the list of YF stock screener..

So my questions are:
1. Could anyone pls explain me the difference (of what i said before)?

2. Some webpages show the sector for the S&P (like stockscharts.com). So...Are there any graphs for the NYSE and the NASDAQ sectors?

3. How do u do (or what's ur method) to look for the right stock? what internet website or what tool do u use to do so?

Thanks for ur time...

Jhon --

 

[isatrader]

I can easily look for the stocks and the markets' graphs with yahoo finance... though i cant see the sectors (they just show a record of the last 5 days...so, it's not what i need..)
So what i do, is to look for the sectors in "barchart.com", but then i try to compare these with the industries and sectors from the "yahoo finance" stock screener list , but they aren't the same... the names are different.. or there are much more industries and stock in the list of YF stock screener..

So my questions are:
1. Could anyone pls explain me the difference (of what i said before)?

2. Some webpages show the sector for the S&P (like stockscharts.com). So...Are there any graphs for the NYSE and the NASDAQ sectors?

3. How do u do (or what's ur method) to look for the right stock? what internet website or what tool do u use to do so?
-

You'll find that different websites categorize stock sectors in different ways, which can be annoying, but the differences are normally minor, and are usually different ways of saying the same thing. Stockcharts has all the NYSE stocks and Nasdaq stocks in it. The nine S&P sectors are just how they are categorized. See here: StockCharts Sector Summary - Free Charts - StockCharts.com and if you click through on one of the them, like for example Health Care Sector then it will take you through to the Dow Jones US Sector Indexes, which are the minor sectors of which there are a few hundred sectors.

You can also see them in stockcharts by doing a search for the $ symbol in the site search and then go to page 6 of the results to find all of the Dow Jones US Indexes.

Another site you might find useful for sectors especially is chartmill. Go to: ChartMill.Com | Sector Rankings: evaluate sectors on Euronext, Amex, NYSE and Nasdaq. which has a list of 213 sectors, and you can order by relative strength which is what you need with Weinstein's method.

I personally use multiple free websites and download the free end of day data from yahoo finance to a desktop chart software program to look at. There's not a really good option for the sectors unfortunately. It takes a bit of work to organize, but once you find a solution that suits your needs you'll be alright. But I wouldn't focus too much on it initially. The first step when learning Weinstein's method is to understand the stages properly and the various breakout points. This will take a while and a fair bit of effort, so get your charts set up correctly first, and then start going through charts and identifying the stages. Once you can identify a charts stage at a glance, then you can start worrying about identifying the best sectors. I hope that helps. But for more info there's over 100 pages of discussions about it in this thread on here, or you can visit the new stageanalysis thread where I spend most of my time these days.

 

[isatrader]

US 10 & 30 Year Treasuries Stage Analysis

The last Stage Analysis of US Treasuries was back on 10th March in post#937 here: http://www.trade2win.com/boards/technical-analysis/134944-stan-weinsteins-stage-analysis-118.html#post2090198 when I highlighted that the 10 & 30 Year US Treasuries had made their first continuation moves lower following their Stage 4 breakdowns early in the year. That continuation breakdown failed and marked the swing low for US Treasuries this year, which have since rebounded strongly for the last four weeks, and on Friday broke back above the most recent swing highs and the 30 week MA to move back into Stage 1A.

I noted in post#23 on the Stage Analysis site that there was a divergence forming in the cumulative volume at the bottom of the charts, and since then cumulative volume has continued to recover and crossed above it's own MA on the weekly chart this week. Relative performance versus the S&P 500 is also improving again, and so US Treasuries are back in neutral territory in the early part of Stage 1 after a relatively short Stage 4 phase of only three months.

The fact that Treasuries have broken above their recent swing highs is interesting to me, as they have a strong inverse relationship with equities, which haven't broken down yet below their February swing lows yet. And so the question is, are Treasuries acting as a leading indicator of weakness to come in the equity market? Definitely, something to keep an eye on imo.

 

[isatrader]

Major Stock Indexes Update

Attached is the updated major equity index charts and relative performance table

US Stock Indexes



European Stock Indexes

 

[isatrader]

Commodities Update and the Dollar Index

Attached is the updated major commodities charts, Gold (GC), Copper (HG), West Texas Intermediate Crude (CL) and the Dollar Index (DX).

 

[isatrader]

US Industry Sectors

Attached are the updated US Industry Sector Charts and relative performance table.

The defensive sectors are taking the lead, with Health Care, Consumer Staples and Utilities all outperforming the S&P 500 on the Mansfield 200 day Relative Strength reading. Health Care (XLV) moves into the top spot this week, while Technology (XLK) continues to be the weakest sector.

 

[jamateuss]

Thank you very much for ur help. I hope to do well on applying this method...
i will check that website...
Thanks for the info n the advices!

You'll find that different websites categorize stock sectors in different ways, which can be annoying, but the differences are normally minor, and are usually different ways of saying the same thing. Stockcharts has all the NYSE stocks and Nasdaq stocks in it. The nine S&P sectors are just how they are categorized. See here: StockCharts Sector Summary - Free Charts - StockCharts.com and if you click through on one of the them, like for example Health Care Sector then it will take you through to the Dow Jones US Sector Indexes, which are the minor sectors of which there are a few hundred sectors.

You can also see them in stockcharts by doing a search for the $ symbol in the site search and then go to page 6 of the results to find all of the Dow Jones US Indexes.

Another site you might find useful for sectors especially is chartmill. Go to: ChartMill.Com | Sector Rankings: evaluate sectors on Euronext, Amex, NYSE and Nasdaq. which has a list of 213 sectors, and you can order by relative strength which is what you need with Weinstein's method.

I personally use multiple free websites and download the free end of day data from yahoo finance to a desktop chart software program to look at. There's not a really good option for the sectors unfortunately. It takes a bit of work to organize, but once you find a solution that suits your needs you'll be alright. But I wouldn't focus too much on it initially. The first step when learning Weinstein's method is to understand the stages properly and the various breakout points. This will take a while and a fair bit of effort, so get your charts set up correctly first, and then start going through charts and identifying the stages. Once you can identify a charts stage at a glance, then you can start worrying about identifying the best sectors. I hope that helps. But for more info there's over 100 pages of discussions about it in this thread on here, or you can visit the new stageanalysis thread where I spend most of my time these days.

 

[isatrader]

Major Stock Indexes Update

Attached is the updated major equity index charts and relative performance table.

US Stock Indexes

The S&P 500 has taken the top spot in the relative performance table for the first time since I've been following this over the last year or so. However, as you'll see on the chart it isn't necessarily a good thing as it appears to be losing momentum, as the 30 week WMA momentum line turned neutral and is close to crossing it's 10 week MA which I use for a signal line. And the detrended distance above the 30 week WMA also broke down below it's recent swing lows, as did the momentum index and so it's looks to be showing signs of forming a Stage 3 top, although it's the strongest of the major US charts I follow.

The Russell 2000 small caps index also looks to be forming a Stage 3 top with the price closing well below the 50 day MA which has started to rollover. However, it needs to close a week below the previous swing low of 894.24 to complete the Stage 3 top, although it would still be above a rising 30 week MA.



European Stock Indexes

The German Dax broke down into Stage 4A, but is very close to it's 200 day MA and so there's a chance of a bounce to retest the breakdown level. Relative performance versus the S&P 500 has been below the zero line for four weeks now and the cumulative volume closed below it's signal line this week as well. The measured swing target imo is down to the 7000 level.

The FTSE 100 is also close to completing a Stage 3 top, but looks relatively stronger than the Dax as it's still quite far above it's 200 day MA, and the 30 week MA is still rising.

 

[isatrader]

Commodities Update and the Dollar Index

Attached is the updated major commodities charts, Gold (GC), Copper (HG), West Texas Intermediate Crude (CL) which are all now in Stage 4 and the Dollar Index (DX) which is in Stage 2 consolidation phase imo.

 

[isatrader]

US 10 & 30 Year Treasuries

Attached is the updated US 10 & 30 Year Treasuries charts which are currently in Stage 1A imo.

 

[isatrader]

US Industry Sectors

Attached are the updated US Industry Sector Charts and relative performance table.

Health Care (XLV) retained the top spot this week followed by Consumer Staples (XLP) in second place. Utilities also closed the week at a new high and remain above the S&P 500 in the table. So the defensive sectors are strengthening still while money is leaving some of the previous leaders like Industrials (XLI) and Financials (XLF).

 

[Dentalfloss]

ermmmm
what is stage 1,2 ,3 and 4 ??
is that a chart formation ??

 

[isatrader]

ermmmm
what is stage 1,2 ,3 and 4 ??
is that a chart formation ??

I would advise you to read Weinsteins book that the thread is about or the even the thread from the beginning as we've gone over it in great detail over the last few years.

A basic explanation is that:

Stage 1: The Basing phase
Stage 2: The Advancing Stage
Stage 3: The Top Area
Stage 4: The Declining Stage

There is lots more to the method as anyone that has read the book or the thread will know, but learning to identify the four major stages at a glance is the first thing that anyone should do that wants to learn Weinsteins method.