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Registered User
Joined: 1/28/2005
Posts: 6,049
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There was an interesting article a few months ago in
TASC magazine. Related to rating stocks based on
their relationship with major moving averages.
The six phases were:
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Bullish Phases:
1)Bullish
2)Accumulation
3)Recovery
Stocks start in the recovery phase(worst) and work
their way up to bullish (best)
Bearish Phases:
4)Warning
5)Distribution
6)Bearish
Stocks start in the warning phase(best of bearish) and
work their way down into bearish phase (worst of bearish)
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They are defined as:
1) Bullish:
Close>50 moving average simple
Close>200 moving average simple
50 moving average simple > 200 moving average simple
2) Accumulation:
Close>50 moving average simple
Close>200 moving average simple
50 moving average simple < 200 moving average simple
3) Recovery:
Close>50 moving average simple
Close<200 moving average simple
50 moving average simple < 200 moving average simple
4)Warning:
Close<50 moving average simple
Close>200 moving average simple
50 moving average simple > 200 moving average simple
5)Distribution:
Close<50 moving average simple
Close<200 moving average simple
50 moving average simple > 200 moving average simple
6)Bearish:
Close<50 moving average simple
Close<200 moving average simple
50 moving average simple < 200 moving average simple
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I ran some tests:
All stocks watchlist:
1) 3425 (bullish)
2) 399 (accumulation)
3) 551 (recovery)
4) 893 (warning)
5) 296 (distribution)
6) 1017 (bearish)
Total Bull: 4375 (66.48%)
Total Bear: 2206 (33.52%)
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There was a post about stocks $5 and under. I decided
to test if they were "weaker" than the market:
Stocks $5 and under:
1) 231 (bullish)
2) 54 (accumulation)
3) 142 (recovery)
4) 116 (warning)
5) 63 (distribution)
6) 304 (bearish)
Total Bull: 427 (46.92%)
Total Bear: 483 (53.08%)
Stocks $5.01 and over:
1) 3194 (bullish)
2) 345 (accumulation)
3) 409 (recovery)
4) 777 (warning)
5) 233 (distribution)
6) 713 (bearish)
Total Bull: 3948 (69.62%)
Total Bear: 1723 (30.38%)
Apparently they are.
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Obviously this offers a lot of opportunities.
Portfolio checking.
Strength based on price range
Sector/industry strength.
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I decided to test a few hundred stocks from some
of my fundamental scans over the last six months:
Stocks my scans:
1) 192 (bullish)
2) 10 (accumulation)
3) 5 (recovery)
4) 18 (warning)
5) 2 (distribution)
6) 6 (bearish)
Total Bull: 207 (88.84%)
Total Bear: 26 (11.16%)
Apparently these are putting good stocks in front
of my eyes
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This can also be used as a tool to improve your performance.
Someone who wants to focus on stocks $5 and under.
may have better results by focusing on stocks in the
recovery phase and staying with them as they move into
accumulation and bullish phases.
I had always felt the above was true. This is the first time
I have been able to put hard numbers on it.
Thanks
diceman
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Registered User
Joined: 4/18/2005
Posts: 4,090
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so to complete the cycle Bearish would then move into recovery?
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Registered User
Joined: 1/28/2005
Posts: 6,049
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Yes
At the other end.
Bullish would move into
Warning.
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Registered User
Joined: 4/18/2005
Posts: 4,090
|
Pretty neat..I'm putting togeather the PCF's to creat a scan for the Recovery and acumulation phases in stocks in my price range and volume preferences.
I had similar thought but hadn't verbalized in such a cohesive way. and mine was built around the 100 ma EXP. Price above the 100 Ma was a good sign and "tradeable" in my system. It seemed like inplaying with back scanner that more often than not if price crossed the 100 ma and held it would continue to trend for at least the next couple of months.
I spend a few days fililng a notebook with thought and ideas tracking down or getting the worden guys to make the pcf's necessary to implement it. Then I got sidetracked with the discovery of "divergences" and thoght I had really found something to help me identify tops and bottoms earlier.
I think I'll be switching back to the system I created which odly enough is similar to Elder's and one I found i Mastering the trade only I use a super short and semi short Ma as a heads up and signal for preparing to enter a trade. I still enter off of candles and enter above the candle. Elder uses a similar system only considers pullbacks to the area between a buying oportunity. mastering the trade prefers to buy below the short ma and sell when ever prices get to high off of it and rebuy when they cross below and on and on and on. As price cross below the longer ma then it is exited and abandoned for the long side.
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Registered User
Joined: 4/18/2005
Posts: 4,090
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So what about MSPD? it is < 50 >200 and 50>200 is there a typo above or is this one falling between the cracks.. I would think this is recovery or thereabouts becasue 50 recently > 200 and price pulled back < 50. but unless im' missing it the system dosent define that scenario
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Registered User
Joined: 1/28/2005
Posts: 6,049
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What you describe is the warning phase:
"it is < 50 >200 and 50>200"
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4)Warning:
Close<50 moving average simple
Close>200 moving average simple
50 moving average simple > 200 moving average simple
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Registered User
Joined: 4/18/2005
Posts: 4,090
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Right... so it is.. I for some reason didn't "see" it.
thanks.
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Registered User
Joined: 9/21/2005
Posts: 566
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Interesting stuff. Diceman, what about if you were looking to actively short stocks, would your attention be focused on the sub 5 group?
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Registered User
Joined: 1/28/2005
Posts: 6,049
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Probably start with warning and watch what falls into
distribution and bearish.
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