Understanding the Relationship Between Stocks & Bonds

December 15, 2014 5:00 am3 comments

Intermarket Analysis is the comparison of potentially related markets. For example: S&P500 and 30 Year Treasury Bonds 30 Year Treasury Bonds and Gold S&P500 and Japanese Yen Shanghai Composite Index and Aussie Dollar, etc. The problem with using TradeStation for any Intermarket Analysis is the dreaded “You may not mix symbols with different delays in the same window” error code. That’s exactly what you’ll get if you try to add 30 Year Treasury Bond Futures (symbol US) to an Emini chart (symbol ES). The problem arises because the data comes from two different exchanges – CBOT for Bonds and CME for the Emini. TradeStation says: Tradestation limitation TradeStation does not allow you to plot two symbols in the same chart […]

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MCVI Indicator and Strategy on Daily Charts

November 3, 2014 5:00 am8 comments

In a recent article, “Modified Chartmill Value Indicator“, the author presented an indicator that might prove helpful in your trading. The indicator is an oscillator which highlights overbought and oversold conditions. The author created a simple test strategy to test the effectiveness of the strategy. The results looked promising and you can read about them here. The original article provided the indicator and strategy as Amibroker code. I’ve received many requests to provide an EasyLanguage equivalent. So here it goes. The MCVI Indicator The EasyLanguage code is at the bottom of this article. It’s available as a text file and as an ELD file which can be imported directly into your TradeStation Development Environment. Below is an example of the […]

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Modified Chartmill Value Indicator (MCVI)

October 20, 2014 5:00 am7 comments

I read about this indicator in an article titled “The Chartmill Value Indicator,” which appeared in the January 2013 issue of Technical Analysis of Stocks and Commodities. The article was written by Dirk Vandycke. In the article, Vandycke introduced an interesting oscillator called the Chartmill Value Indicator (CVI). The following article explains the CVI formulas, proposes a modified version of the CVI (MCVI), and demonstrates the potential of the MCVI with a sample pullback strategy. AMIBroker code for the MCVI is included at the end of the article. The Modified Chartmill Value Indicator (MCVI) The CVI represents a standardized deviation from a moving average, which can be applied to any price series over any period. The concept is simple. As […]

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The Bullish Outside Month

June 16, 2014 5:00 am2 comments

I came across an article over at the blog, Jay On The Markets, that talked about applying a bullish outside indicator on a monthly chart. The article I was reading is titled, “One Sign That the Bull May Still Have Legs“. In this article Jay talks about the incredible run the U.S. broad market has experienced as of late. Remarking that “The Trend is Your Friend”, Jay goes on to highlight a potential bullish indicator which appears on the monthly chart of the S&P. The indicator is a bullish outside month. I thought I would spend some time testing this indicator and see what the results may tell. Of course, the code used to test this indcator appears at the […]

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The Deadly Double Divergence

November 4, 2013 5:00 am0 comments

Would you be interested in an indicator that has signaled ten market tops since 1966 without a single false signal?  I read about such an indicator in an article titled “Double Divergences in the Advance-Decline Line,” which appeared in the November 2013 issue of Active Trader.  The article was written by Charles Kirkpatrick. In the article, Kirkpatrick presented compelling evidence that double divergences in the cumulative advance-decline line are always followed by large bear market declines. Even more important, Kirkpatrick observed that a double divergence occurred on August 2, 2013.  Given that I currently have long equity positions; that certainly got my attention.  The following article examines the August 2013 double divergence and explores the implications for the market. Market Breadth […]

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FRAMA – Is It Effective?

September 16, 2013 5:00 am5 comments

The Fractal Adaptive Moving Average aka FRAMA is a particularly clever indicator.  It uses the Fractal Dimension of stock prices to dynamically adjust its smoothing period.  In this post we will reveal how the FRAMA performs and if it is worthy of being included in your trading arsenal. To fully understand how the FRAMA works please read this post before continuing.  You can also download a FREE spreadsheet containing a working FRAMA that will automatically adjust to the settings you specify.  Find it at the following link near the bottom of the page under Downloads – Technical Indicators: Fractal Adaptive Moving Average (FRAMA).  Please leave a comment and share this post if you find it useful. The ‘Modified FRAMA’ that we tested consists of more […]

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Moving Averages – Simple vs. Exponential

July 29, 2013 5:00 am4 comments

In this round of testing we put the Simple (SMA), Exponential (EMA) and Double Exponential (D-EMA) Moving Averages through their paces to identify which is the best and what characteristics can be expected as the length of each average is adjusted. We tested Long and Short trades using Daily and Weekly data, taking End Of Day (EOD) and End Of Week (EOW) signals with Moving Average lengths varying from from 5 – 300 days or 60 weeks.~ These tests were carried out over a total of 300 years of data across 16 different global indexes (details here). Simple vs. Exponential – Test Results: Annualized Return Annualized Return During Exposure Trade Duration Time In The Market Biggest Loss Probability Of Profit […]

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Best Stock Market Indicator Ever: Rises to 85%; Secondaries Are Negative

July 15, 2013 5:00 am2 comments

The $OEXA200R (the percentage of S&P 100 stocks above their 200 DMA) is a technical indicator available on StockCharts.com used to find the “sweet spot” time period in the market when you have the best chance of making money. The weekly charts below are current through the week’s close. Important Notice: As of June 17, the criteria for the OEXA system have been modified to get a more accurate indication of market conditions. The new methods are detailed in the section below entitled “Background on How I Use This Indicator“. Note that I have also switched from monthly to weekly OEXA200R and S&P charts for increased precision.  Weekly OEXA200R vs. S&P Comparison According to the new criteria explained in the section “Background […]

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Stochastic Oscillator (SO) – Test Results

June 24, 2013 5:00 am4 comments

The Stochastic Oscillator (SO) is a widely used momentum indicator. As part of the Technical Indicator Fight for Supremacy we have put it to the test through 16 different global markets~ (a total of 300 years data) to find out how well it works and what settings produce the best returns. First of all let’s establish how the market performs while the Stochastic Oscillator is in each 10th of its range: I have highlighted each of the negative results across a Red—>Orange gradient and positive results across a Light Green—>Dark Green gradient (depending on how great the loss or gain).  Clearly most of the market gains occurred while the Stochastic Oscillator was above 50 and the lion’s share when it was above 90. What this means is that when the market […]

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Price-Volume Ratio Identifies Reversals

May 27, 2013 5:00 am1 comment

Sometimes the simplest ideas work the best.  Before market peaks, shares typically transition from strong (institutional) hands to weak (retail) hands.  Before market troughs, shares usually move from weak hands back into strong hands.  Both of these scenarios result in increased trading volume. Given this premise, I created a simple indicator based on the ratio of price to average volume.  In this article, I will demonstrate how to use this Price-Volume (PV) indicator to identify potential reversals in broad market ETFs.  I also provide the AMIBroker code for this indicator at the end of the article. PV Ratio Indicator If volume increases after sustained advances as the market approaches a peak, then the price/volume ratio should decline, even while prices […]

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