# The Market Indicators thread



## treefrog (19 February 2008)

*What Is a Market Indicator?*
Like a technical indicator, a market indicator is a series of data points derived from a formula. In this case, however, the formula for market indicators is applied to the price data for multiple securities within the market, instead of just one security. Price data can come from open, high, low or close points for the securities, their volume, or both. This data is entered into the indicator formula and the data point is produced. 

Unlike technical indicators, market indicators are not charted above or below the chart. Market indicators are what is being charted, and as such have their own ticker symbols. There are often many symbols that apply the market indicator formula simply to different markets. For example, the $BPSPX and $BPNDX track the Bullish Percent Index for the S&P 500 and the NASDAQ 100 respectively. 

*Bullish Percent Index (BPI)*
The Bullish Percent Index (BPI) is a popular market breadth indicator that is calculated by dividing the number of stocks in a given group (an exchange, an industry, etc.) that are currently trading with Point and Figure buy signals, by the total number of stocks in that group. Bullish Percent levels that are above 70% are considered overbought, whereas levels below 30% are considered oversold. Strong buy signals occur when the Bullish Percent Index falls below 30% and then reverses up by at least 6%. Conversely, promising sell signals occur when it goes above 70%, and then reverses down by at least 6%. 

It is important to note that the Bullish Percent Index is not something that can be applied to a single stock but rather an index that is calculated for a group of stocks. 

The most popular version of this chart is the NYSE Bullish Percent ($BPNYA) which is mentioned prominently in Thomas Dorsey's book, Point & Figure Charting, however it is important to remember that the Bullish Percent index can be calculated for any grouping of stocks. 

Because the NYSE's Bullish Percent Index is so closely followed, each day we also publish the list of NYSE stocks with P&F buy signals as well as the list of all stocks in the current NYSE "universe". Those lists can be found on our NYSE BPI Components page. 

Traditionally, the Bullish Percent indicator is charted on a Point and Figure chart (example) using a 2 point box size. However, the indicator can also be charted and studied using standard charts (example) as well.

more at:   http://stockcharts.com/school/doku.php?id=chart_school:technical_indicators:introduction_to_mark


----------



## treefrog (19 February 2008)

*Re: XAO Analysis*

The NYSE Bullish Percent Index 
The NYSE Bullish Percent Index was invented by the estimable market technicians at Chartcraft in 1955 (now known as Investors Intelligence). The NYSE Bullish Percent Index is calculated by reading either a buy or a sell signal from the point and figure chart of each of the 2800+ stocks on the NYSE each evening. (For a review of the P/F technique take a look at this article on Stockcharts.com.) The value of the index represents the percentage of stocks listed on the NYSE that signal a buy. For example, if 2100 stocks signal buy and 700 signal sell, the value of the NYSE Bullish Percent Index is 75. Since it incorporates every NYSE listed company, it is easy to see how useful this index can be. 

Bullish Percent gives buy and sell signals just like any other point/figure chart. In fact, the chart of Bullish Percent is always in one of six phases. These six phases determine the underlying market condition and therefore indicate an appropriate trading strategy. Below are the six phases and an explanation of the associated market strategy. Remember, the index is always in only one of the phases. 



Bull Confirmed - Bull confirmed is, just as it sounds, the most bullish signal the index emits, giving traders a green light to take on multiple long positions with confidence. In the bull confirmed phase, the Bullish Percent Index has a column of X's on its right edge, and this column must have surpassed the next column of X's over to the left by at least one square. Since a market that is in bull confirmed mode is upwardly trending, directional indicators such as MACD are more appropriate than oscillators during this phase. 

Bear Confirmed - Again, just as it sounds, the bear confirmed phase is the most bearish signal the index gives. In this mode, the Bullish Percent Index has a column of 0's on the far right edge of the chart, and this column must surpass the next column of 0's to the left by at least one square down. Since a market in the bear confirmed mode is trending downward, only short positions should be considered during it, and directional indicators are again the weapons of choice. 

Bull Correction - The bull correction mode, following only a bull confirmed phase, is a sideways market or a market experiencing a correction after a bull confirmed phase. The chart features a column of 0's on the right edge that has yet to pass the last 0's column. Long positions should be taken with caution because a bull correction can reverse into a bear confirmed. During the bull correction mode, look to oscillators like stochastic for insight into timing trades. 

Bear Correction - A market in the bear correction phase, following only a bear confirmed phase, is also a sideways market, and it is experiencing a correction from bear confirmed. A bear correction features a column of X's on the right edge of the chart that fails to surpass the last column of X's. Again, use short positions with caution, and use oscillators instead of directional indicators with the charts. 

Bull Alert - The final two phases of the Bullish Percent Index involve overbought or oversold conditions. On the Bullish Percent chart, readings above 70% are considered overbought, and readings below 30% are considered oversold. The bull alert phase is simply a reversal into a new column of X's from below 30% on the chart, and it indicates that the index is oversold and due for a bounce. As soon as the index signals a bull alert, traders can take long positions with caution until the X's cross back above the 30% line. 

Bear Alert - A bear alert is simply the opposite of a bull alert, except to signal a Bear Alert, the index must be crossing below the 70% line with a column of 0's. It is important to remember that for a bear alert to signal, the column of 0's must actually cross back below the 70% line. During a bear alert the market is overbought and due for a sell-off. Take short positions with caution until the market reverts back to bull confirmed. During Alert phases it is a good idea to take quick profits (10-15%) because there is a good chance the market will reverse. 


Here are some charts showing each of these phases: 





Now that you have an idea of how to read the NYSE Bullish Percent Index, take a look at the actual chart and see if you can tell what phase the market is in from this daily chart on the Investor Intelligence website. 

http://www.investopedia.com/articles/trading/04/080404.asp


----------



## motorway (19 February 2008)

The problem with trends is that they end !




> that what was needed was some sort of soulless barometer that would become negative at market tops and positive at market bottoms. A contrary indicator that would afford the investor the ability to become less aggressive as the market reached high risk levels and more aggressive when the market reached low risk levels.






> We play offense (buy stocks) when we have the ball, and we play defense (protect what we have) when the market has the ball. We look at the chart's scale as the football field. Where the index "is" on the chart (field position) is very important, too.
> 
> We consider above 70 percent as a high risk level and below 30 percent a low risk level. Let's see why. When there are more than 70 percent of the stocks underlying the NYSE on Point & Figure buy signals there are no disconcerted investors; just about everyone is making money and the newspapers are as bullish as can be. Earnings estimates are coming in on the money like clockwork.
> 
> ...




So You see why position is prospect ?

eg You ask what are the prospects and I ask what is the position .


Now it has to be integrated with other analysis ( price Volume & Time )

eg on the line chart look at the volume surges

I use the B% as a simple Wyckoff Postion Sheet



> Our discussion of Wyckoff's analytical methods have so far concentrated on deductive reasoning to
> reach investment or trading conclusions. We first determined the position and trend of the general
> market, then the positions and trend of group averages, and finally selected individual stocks based on
> their ability to move in harmony with those larger trends.
> ...




B% quotes are from Thomas J. Dorsey
The Wyckoff Quotes are from the book by Jack K.Hutson



The B% is  like a calendar.. It forces one out of a linear mode of thinking
when to look for Signs of Weakness
When to esp look for Signs OF Strength

( when to be careful with margin etc When calls and puts could be timely etc )

I think We can see how it is seasonal !


motorway


----------



## motorway (19 February 2008)

Both forms are useful...

You can see a number of nice divergences on the second chart
The red line ( B% ) , The index and Volume..

yesterday Price tried to go down
But volume was lower and bullish % stayed much the same ..

At the ultimate top
B% made a lower high
Price made a higher high

Very clear divergence from April 2007
Price struggling Up in an expanding Oscillation
B% Falling

*.* such behaviour ( divergent / inharmonious )  is not sustainable
                Such behavior is a red flag that will  resolve.

motorway


----------



## motorway (19 February 2008)

A look at how a  stock  becomes counted on the B%

On the bar chart the red arrows point to the "last point of supply"

*.*  This is the last point of resistance

The blue arrows point to the "last point of support " ( demand ) 

Now these points are constantly changing
They are evolving over time.

becoming closer and further apart..

If BHP moves up a little more it will become a "vote" on the B%

The Price will be above the last point of supply
( what chartcraft call a "buy signal" -- maybe  )

You can see how that looks on the actual P&F ( 2% x 3 ) That builds the B%

Every stock on the XAO has an equal Vote  ( unlike the Cap weighted index )

motorway


----------



## Timmy (19 February 2008)

Great thread Treefrog and Motorway, thank-you both.


----------



## motorway (20 February 2008)

http://208.149.108.6/cgi-bin/foxweb.exe/fwuniv?email=&lesson=4&doc=index4_2.html

hope that link works.....

Those interested will find a lesson on B% charts


Here is another one to  ponder

% of stocks above their 10 week mov averages






> One of the criticisms often leveled against technical analysis is that charts, in a very general sense, look best at the top and worst at the bottom. Obviously, it would be far more valuable if charts looked their worst at the top and their best at the bottom.




motorway


----------



## motorway (20 February 2008)

Wrong chart

The one above is % making new highs 

here is the % above their 50 day mov average

motorway


----------



## treefrog (21 February 2008)

appreciate the plain english speak motorway
I take it that your platform doesn't give %B for other aussie indexes such as banks, industrials, miners etc but just for the XAO

if so, the B% may help if only trading the XAO, but early indication in the different sectors is usually the best information for managing stocks held in those sectors

always good to have 20/20 hindsight but will include a bit of foresight as well in the next bit
first the hindsight:
common factors for the following weekly charts are;
the Linear regression indicator of 30
the relevant bull run for each sector since early 03
the fibonacci levels applied to the start and finish of the bull runs to foresee potential support levels

*Utilities* index gave the first SELL signal at week 21 - it was a total uncontested reversal - ie no double top - and it is still heading south 
*Financials* next at w23 but the bulls were having none of it - not their beloved banks!! After the bulls ran out of puff (and money) it was all downhill quickly - 50% retraced at this time 
*Industrials* next at w27 - but a DT resulted to confirm the dirrectional change as for the financials
The *XJO/XAO *didn't give a sell signal until w30
So what?? well there is nothing odd about an increasing number of indexes reversing one after the other until they collectively pull the overall index down
but it is how this might be used to indicate a recovery or further slide that is interesting
*that bit of foresight I promised*
assume that first down could well be first to recover - provided the others making the current effort to hold the market up aren't starting to falter (mining,energy), that may be the start of a recovery
but at this time they are heading south with a full tank of gas, and holders of stocks (long) in these indexes should ask themselves - why have I been holding stocks for three-six months in a clearly downtrending index
time to consider buying only when the worm turns white and the little green arrow pointing UP appears
and while it is easy from my position in this tree to see, it usually is best to be long in stocks in an index that is rising and short in the ones that are going the other way
and then its always hard to find a reason why I am holding after the trendline has been broken (if you are not partial to worms)


----------



## motorway (21 February 2008)

> appreciate the plain english speak motorway
> I take it that your platform doesn't give %B for other aussie indexes such as banks, industrials, miners etc but just for the XAO
> 
> if so, the B% may help if only trading the XAO, but early indication in the different sectors is usually the best information for managing stocks held in those sectors




1) Since I posted on B% before and explained it... I assume people interested in it -did read it , know how to use Google etc...So I rather move forward with the discussion. Others I assume are not interested...

2) The first time just before the bottom of the August correction I posted the B% it was a whole market, I then changed it to the top 300... and recently with  the XAO.
The software will do a B% of any sector

3) early indication ? Just look at the inharmonious and divergent behavior between the B% and the Index eg the P&F chart in the XAO thread..

Note this quote from Dorsey 







> It is also the point where everyone is in that wants to be in. If a broker called his client with a new recommendation for a stock purchase, the investor's response might be "I love the idea, what stock should I sell to get the money to buy it?" He's already in the market and has no funds to create new demand for this new idea. He is in a situation where he must create supply to have the liquidity to create demand. The net of selling to buy is a wash concerning supply & demand.




So how do we measure that ?

The How ( character ) of the interaction between Price, volume Time and Position... ( wyckoff )

Deductively  by the P V T & Pos of the index itself and then down through sectors groups and stocks

Inductively by the P V T & Pos of individual stocks aggregated together

top down & bottom up


a B% can be constructed from many measures

The most important is the P&F ,,,

eg a  B% of  above 50day ( or 200 day etc ) average needs a certain amount of time ( as in the earth going round the sun ) to pass... 

A B% of P&F just needs points of resistance to become points of support
That happens in it's own time (  when the forces that are drawing the chart make it happen ).. at any time...

Chartcraft and Dorsey tend to use the Chartcraft scaling ( very large stepped box sizes ) This tends to make their B% slower

I have used log scaling this make the B% very sensitive and adaptive
to the changes in support and resistance in each stock..

Each stock gets one vote ( the more stocks in the "election" the better )

Even your sector charts are cap weighted ( making up equal weight "wave charts "  is an option )

  I divide the B% into winter, spring, summer, autumn, winter

Then the behaviour of the bar charts and the P&F charts either confirms or negates those phases of the b%... Measure P,V, T &  Pos to judge the character of demand and supply....

eg



> Now, in order for a stock or a market to move upward, so much stock must be bought: This is volume.  It will move a certain distance: This is price or price change.  And the movement will last for a certain amount of time: This is time.  The same process takes place on a downward move.
> Richard Wyckoff




So where are We ..... In Winter ( But that is where the beginning is )

B% has already signalled BULL CONFIRMED ...But is atm in BULL CORRECTION

what will happen now is support and resistance will come closer together

"Coiling"



> Bull Correction - The bull correction mode, following only a bull confirmed phase, is a sideways market or a market experiencing a correction after a bull confirmed phase. The chart features a column of 0's on the right edge that has yet to pass the last 0's column. Long positions should be taken with caution because a bull correction can reverse into a bear confirmed. During the bull correction mode, look to oscillators like stochastic for insight into timing trades




Chartcraft is a fairly mechanical and more limited P&F methodology
very rule based imo..... ( good rules though ,,, High Clarity )





motorway


----------



## treefrog (21 February 2008)

> =motorway;262412]1) The software will do a B% of any sector



hadn't noticed your posting of different indexes - perhaps because I make more use of the "like activity" sectors and looked for them - appologies for not picking this up in your text.


> early indication ? Just look at the inharmonious and divergent behavior between the B% and the Index eg the P&F chart in the XAO thread..



certainly did notice the divergence but felt this was apparent in other chart indicators too and didn't clearly see "stand out" entry and exits with your B%- likely that is a lack of familiarity with it. Will add that divergence was so prolonged it continued across some good "buy" opportunities along the way


> Each stock gets one vote ( the more stocks in the "election" the better )



can't say I like this idea - prefer the weighting from capitalisation factored in


> So where are We ..... In Winter ( But that is where the beginning is )
> B% has already signalled BULL CONFIRMED ...But is atm in BULL CORRECTION
> what will happen now is support and resistance will come closer together
> "Coiling"



the term "Bull confirmed" says to me "buy with confidence" but looking at the ordinary chart, can only see a smallish oversold bounce followed by consolidation - and yes I realize Bull Correction indicates a modification to consolidation/undecided.
Thanks for your efforts


----------



## Timmy (21 February 2008)

treefrog said:


> didn't clearly see "stand out" entry and exits with your B%




Hi treefrog and motorway, thanks again for the thread.

I have read motorway's posts on the B% in the XAO thread and here.  I wont profess any expertise on it but would say that it is not the sort of thing that is going to give buy and sell entry and/or exit signals in and of itself?  More of a warning that when the B% is very high, or very low, that it is showing a probably irrational degree of bullishness, or bearishness, in the market and that heed should be paid to price and volume movements on the bar/candle chart of the instrument itself to time entry and/or exit.

Also, re divergence, look also to the case where the price moves are mismatched with the B% moves - eg. a high and accelerating B% accompanied by a sluggish price move up.  This is not divergence but it is perhaps very instructive of a change in the dynamics of what is going on.    Motorway refers to this in his prior post as inharmonius behaviour (the price and B% are out of harmony).


----------



## Timmy (21 February 2008)

motorway said:


> Each stock gets one vote ( the more stocks in the "election" the better )







treefrog said:


> can't say I like this idea - prefer the weighting from capitalisation factored in




This has me scratching my head ... it takes more money to move a large cap. stock price (generalisation I know, but largely true) than a small, and yet they both get the same value vote.  The B% is showing, in my terms, exuberance, irrational or not (thanks Mr. G).  Irrational at the highs or lows certainly.  Is a 'plus' vote on a smaller cap. stock nevertheless an equal vote to a 'plus' vote on a large cap. stock, when viewed with this purpose in mind?  Interesting.

They say you can't step in the same river twice ... does a market cap. weighted index ever measure the same thing twice?


----------



## Timmy (21 February 2008)

treefrog said:


> the term "Bull confirmed" says to me "buy with confidence"




And another thing...

Sorry for the hat-trick of posts, just a very good topic.

Treefrog, in your opening post +1 you gave the link to 
http://www.investopedia.com/articles/trading/04/080404.asp
where they show a break of a double top on a P&F chart and label it as "Bull Confirmed".  I think it is very dangerous to equate "Bull Confirmed" with "buy with confidence", as the next post (from m/way) points out we need to have regard to many other factors than just a simple break of a double top on a point and figure.  I think of the case, specifically where there is a break of a double top after a very long column of "x" the market may be well long by then and the break of the top has been triggered so as to enable an easier offloading of some of these longs?


----------



## treefrog (21 February 2008)

Timmy said:


> And another thing...
> 
> Sorry for the hat-trick of posts, just a very good topic.
> 
> ...



hmmmmm......going by motorway's definition posted in Jan tim - emphasis mine
*Bull Confirmed *- Bull confirmed is, just as it sounds, *the most bullish signal the index emits, giving traders a green light to take on multiple long positions with confidence.* In the bull confirmed phase, the Bullish Percent Index has a column of X's on its right edge, and this column must have surpassed the next column of X's over to the left by at least one square. Since a market that is in bull confirmed mode is upwardly trending, directional indicators such as MACD are more appropriate than oscillators during this phase.


----------



## Timmy (21 February 2008)

Treefrog - that definition of Bull Confirmed is also given in your post 2 in this thread?  Is it from Dorsey's book, webiste, or elsewhere?  Regardless, I would be very wary of relying on one input, such as the B% ... or any one input for that matter, as 'giving the green light'.  

Motorway points out that the B%



motorway said:


> ... has to be integrated with other analysis ( price Volume & Time ) ..........
> 
> The B% is  like a calendar.. It forces one out of a linear mode of thinking
> when to look for Signs of Weakness
> When to esp look for Signs OF Strength




I think this is really important.




Another thing that occurs to me is that an indicator (like B%, or any other), and of course and more importantly, price itself, do of course switch from one mode to another, and sometimes very quickly indeed.  Qualifying B%, or anything else, with analysis of price, vol and Time can be very helpful in assessing the likelihood, and timing, of any switch.


----------



## treefrog (21 February 2008)

Timmy said:


> Another thing that occurs to me is that an indicator (like B%, or any other), and of course and more importantly, price itself, do of course switch from one mode to another, and sometimes very quickly indeed.  Qualifying B%, or anything else, with analysis of price, vol and Time can be very helpful in assessing the likelihood, and timing, of any switch.



think the B% is probably a good but very limited indicator. Maybe more definate switch signals - I would have to observe it over a longer period of time.
Any half reasonable system should factor in a substantial retrace probability after significant and quick moves - I traded the XJO long back to the 38% fib level, deciding prior that the move down was so solid how could we get a 50% retrace and watched it continue to the 50%fib. This entry was indicated based on a "significantly oversold" reading - the same as the b% indicated
and the indicator I use for this, (overbought/oversold) plus diversion signals and momentum trends is the Chande Momentum Oscillator
so a total of two indicators, LR and CMO and there is nothing additional that the B% appears to add that these two do not give. I can use this on ALL instruments and all timeframes - it is not limited in application to composit indexes.
So KISS - no volume, no time cycles, no seasons, no swapping oscillators for trend followers, no stops - a simple (60/40) system with clear buy/sell signals.
Oh, but do toss in the fib levels to know how far its going in its current dirrection.
The market is just a bus really - have to know which dirrection the one you are about to hop on is going - Up Down or Sideways! Pay your fare, hop on and know when to get off - hopefully with a few of other passenger's fares


----------



## motorway (22 February 2008)

> think the B% is probably a good but very limited indicator




It can have as many uses as you like

It is  a starting point to pick stocks to be active in

It is not just about composite indexes

*It is about rotation and the flow of money*
It is about the bricks not just the building..

without the bricks there is no Building..

Trends sustain themselves by rotation, by money flowing along the "" line of least resistance " rotating between the different themes stocks represent.


I do not regard it has an indicator ( it is more an index )
and while We are using Chartcraft definitions 
I do not practice Chartcraft methodology


About the one vote

If We want to understand something eg the health of  a Body..

We can look at the body as one thing as a functioning whole
or as made up of functioning parts and systems..
To determine health both approaches have their merits.

Top down .... bottom up



> so a total of two indicators, LR and CMO and there is nothing additional that the B% appears to add that these two do not give.




Those two indicators are just the same price information represented in another form as the index... The B% is derived from totally different information. 
This is an important point indicators are just the same information as a price series.

A B% is looking at the health of the foundations . It's construction is independent of the indexes price series.



> very limited indicator




It is support and resistance
buying pressure and selling pressure
It's use is unlimited...

eg We can look at the stocks that have given a vote
or we can look at those about to vote
or far from voting
we can uses it as a start to see
where is the money flowing
in conjunction with relative strength etc

I can use this on ALL instruments and all time frames - it is not limited in application to composite indexes.

P&F charts do not  have time frames 

 Support and resistance draws the P&F chart not time frames.

B% is applied to a group of stocks... Anything that is of interest
It is not about composite indexes .. Though it can reveal like an X ray the 
internal health of an index( you only have to think about it... Like I said in the XAO thread money flows somewhere .... *it can not flow out of everything* and be sustainable nor can it flow into everything.... see the possibilities )



> So KISS - no volume, no time cycles, no seasons, no swapping oscillators for trend followers, no stops - a simple (60/40) system with clear buy/sell signals.



KISS for Me is to deal with the basic reality

of Price, Volume & Time in the context of position

To add anything is to add complexity

There are no time cycles ( there is just duration eg how long does a rally last)
There are no time frames..... there are just price moves of a certain range.

I have never traded a time frame.... only moves

They have a certain price range, they involve a certain amount of volume , They last a certain amount of time.... and they leave the price in a certain position

Once a move is finished a contrary move sets in ..
This is all there is

Anything else is artificial.. complexity

Anything else can be a tool though  like bar charts ..
Candles & Bars  overlay  and cut up the  simple reality

The P&F B% is just aggregating all the these buying and selling waves of individual stocks..
It is not the index in another form ( indicator )

Agree the other examples are "indicators"   ( They introduce time twice. Once as duration and second  as time frame .. This defines for me an indicator from an index)


To understand B% you have to understand P&F


Timmy.... support and resistance are democratic  ...that is why one vote one stock...smart money flows where it will...rotation..

Not the wisdom of the crowd
or it's stupidity.. but the keeping in harmony with the smarter money.

For  those who asked the questions..

motorway


----------



## treefrog (22 February 2008)

> =motorway;262732]Those two indicators are just the same price information represented in another form as the index... The B% is derived from totally different information.
> This is an important point indicators are just the same information as a price series.



in total agreement - but the bottom line is what works simply and reliably 


> I can use this on ALL instruments and all time frames - it is not limited in application to composite indexes.



sorry, but have difficulty seeing it as usuable on an instrument such as $A/$US after your explanation of needing multiples of those within an instrument 


> Not the wisdom of the crowd
> or it's stupidity.. but the keeping in harmony with the smarter money.



I used to take note of where the smart money was going - studdied COT reports etc and threw them all away agreeing with some rabbit who said 'but you are trading *the market* and that includes the crowd and their stupidity as well as the smart money'. 
In my years in engineering and management, I subscribed to the view that if it couldn't be explained on a single page it should be re-written - I put much effort over my 15 years in trading/investing the markets to end up with the system I mentioned earlier - one page of explanation and one page of charts - hmmmmm, maybe thats two pages.
appreciate your efforts to explain your system motorway - you have put an incredible amount of research and analysis in to develop it.
You would be a lot more confident of your trades whereas I pretty much just follow the bouncing ball (well not quite - do toss in a few fundamentals)


----------



## motorway (22 February 2008)

> sorry, but have difficulty seeing it as usuable on an instrument such as $A/$US after your explanation of needing multiples of those within an instrument




yes the bigger the crowd  the more votes to build the picture

and the easier maybe to see the flows ..





> Not the wisdom of the crowd
> or it's stupidity.. but the keeping in harmony with the smarter money.






> appreciate your efforts to explain your system motorway




 I will try to update it in the XAO thread when "that ( voting ) behavior changes "


regards
motorway


----------



## eieio (9 March 2008)

Hello there Motorway. 

Re the Updata Technical Analyst software that you use. Does it allow you to select some/all of the individual stocks in a particular sector (or sectors) to analyse for %B construct outcomes such as the ones you have shown above. If so, is the process of selection of these stocks from your database straight forward or tedious ie: is there a built-in pulldown menu or do you have to program the software to do it.

Btw: I presume that when you are talking about XAO you are in fact analysing all of the ASX stocks that make up the XAO index - is this correct?

NB: Thanks to you and Greenfrog both for some enlightening posts


----------



## motorway (9 March 2008)

> Does it allow you to select some/all of the individual stocks in a particular sector (or sectors) to analyse for %B construct outcomes such as the ones you have shown above.




There are various versions of UpdataTA

Bloomberg , Esignal & EOD....There are also real time and 15 min delayed 
versions that also come with ( updata's  own)data but for only UK & USA)

atm I have the EOD version which also comes with data... But the ASX data they provide is unadjusted.... So i do not use it..

The software will link to eg a metastock database and I have  so linked it to
a premiumdata metastock database....



> If so, is the process of selection of these stocks from your database straight forward or tedious ie: is there a built-in pulldown menu or do you have to program the software to do it.




The EOD versions have  very good scanning and of course P&F

It will calaculate the B% for example in about 20 seconds for the XAO
That is calculated from all the stocks in the XAO..
Just click B% define settings ( eg calculate log charts 2% single breaks )
and bingo... 

Now because it is a third party database a first step is to buffer the data
this takes about 30 seconds... eg It imports the metastock folder for the XAO it will then build or scan from the data very quickly..

You don't need to do this with charts it will fetch data... it just makes scans and market breadth calculations quicker if you pre buffer

There are number of mkt breadth options
scans are user defined
including P&F eg all stocks above up sloping trend line..on a buy/sell signal ( user defined ) and with any other conditions ..
scan volume relative strength, patterns ...

it will tell you what stocks are voting yes on B% etc




> Btw: I presume that when you are talking about XAO you are in fact analysing all of the ASX stocks that make up the XAO index - is this correct?




YES.... Premium data allows one to construct custom folders
There is a large number...  Then buffer the data and scan or construct B% etc
On any of the available folders

You just need a folder containing the stocks you want to scan or build from

The Esignal Version is much more powerful and would be more  integrated with the data 
It has custom coding etc and of course dynamic real time charts


You only need an email address to get a 2 week trial 

It is very possible that justdata would be the better 
option in looking for data for updataTA EOD

Esignal which I have been waiting for
would maybe be the premium option




motorway


----------



## motorway (9 March 2008)

Here is the B%
and here are the stocks voting YES atm

took about 5 seconds all up of calculation time

( I had pre buffered already )

motorway


Code Name	Long Name
AAC	AUSTRALIAN AGRICULT.  ORDINARY
AAX	AUSENCO LIMITED  ORDINARY
ABB	ABB GRAIN LIMITED  ORDINARY B CLASS
ABC	ADELAIDE BRIGHTON  ORDINARY
ABY	ADITYA BIRLA  ORDINARY
AED	AED OIL LIMITED  ORDINARY
AEU	AUSTRALIAN EDUCATION  UNITS
AGM	ALLEGIANCE MINING  ORDINARY
AIM	AIM RESOURCES  ORDINARY
ALB	ALBIDON LIMITED  CHESS DEPOSITARY INT
ALS	ALESCO CORPORATION  ORDINARY
AMC	AMCOR LIMITED  ORDINARY
AMU	AMADEUS ENERGY  ORDINARY
ANE	AUSPINE LIMITED  ORDINARY
ANN	ANSELL LIMITED  ORDINARY
API	AUSTRALIAN PHARM.  ORDINARY
AQA	AQUILA RESOURCES  ORDINARY
ASB	AUSTAL LIMITED  ORDINARY
AWB	AWB LIMITED  B CLASS SHARES
AWC	ALUMINA LIMITED  ORDINARY
AWE	AUSTRALIAN WORLDWIDE  ORDINARY
AZA	ANZON AUSTRALIA LTD  ORDINARY
BBW	BABCOCK & BROWN WIND  STAPLED SECURITIES
BEI	BABCOCK & BROWN ENV.  ORDINARY
BMN	BANNERMAN RESOURCES  ORDINARY
BPT	BEACH PETROLEUM  ORDINARY
BSG	BOLNISI GOLD NL  ORDINARY
BSL	BLUESCOPE STEEL LTD  ORDINARY
BTA	BIOTA HOLDINGS  ORDINARY
BVA	BRAVURA SOLUTIONS  ORDINARY
CCL	COCA-COLA AMATIL  ORDINARY
CCP	CREDIT CORP GROUP  ORDINARY
CDA	CODAN LIMITED  ORDINARY
CDD	CARDNO LIMITED  ORDINARY
CDU	CUDECO LIMITED  ORDINARY
CEY	CENTENNIAL COAL  ORDINARY
CFU	CERAMIC FUEL CELLS  ORDINARY
CLOR	CLOUGH LIMITED  RIGHTS 17-DEC-07
CNA	COAL & ALLIED  ORDINARY
CNT	CENTAMIN EGYPT  ORDINARY
COA	COATES HIRE LIMITED  ORDINARY
COU	COUNT FINANCIAL  ORDINARY
CSL	CSL LIMITED  ORDINARY
CSR	CSR LIMITED  ORDINARY
CTO	CITIGOLD CORP LTD  ORDINARY
CTY	COUNTRY ROAD LIMITED  ORDINARY
CWP	CEDAR WOODS PROP.  ORDINARY
CXC	COEUR D'ALENE MINES.  CDI 1:1
DMP	DOMINO PIZZA ENTERPR  ORDINARY
DOW	DOWNER EDI LIMITED  ORDINARY
DRT	DB RREEF TRUST  STAPLED UNITS
DUE	DUET GROUP  STAPLED SECURITIES
DXL	DYNO NOBEL LIMITED  ORDINARY
EMP	EMPEROR MINES  ORDINARY
EQI	EQUIGOLD NL  ORDINARY
EQN	EQUINOX MINERALS LTD  CHESS DEPOSITARY INT
ERA	ENERGY RESOURCES  ORDINARY 'A'
FAN	FANTASTIC HOLDINGS  ORDINARY
FCL	FUTURIS CORPORATION  ORDINARY
FLX	FELIX RESOURCES LTD.  ORDINARY
FMG	FORTESCUE METALS GRP  ORDINARY
FXL	FLEXIGROUP LIMITED  ORDINARY
FZN	FONE ZONE GROUP  ORDINARY
GCL	GLOUCESTER COAL  ORDINARY
GNC	GRAINCORP LIMITED  A CLASS ORDINARY
GRR	GRANGE RESOURCES.  ORDINARY
GUD	G.U.D. HOLDINGS  ORDINARY
HER	HERALD RESOURCES  ORDINARY
HFA	HFA HOLDINGS LIMITED  ORDINARY
HGI	HENDERSON GROUP PLC  CHESS DEPOSITARY INT
HWI	HOUSEWARES INTERNAT.  ORDINARY
HZN	HORIZON OIL LIMITED  ORDINARY
IFM	INFOMEDIA LTD  ORDINARY
IGO	INDEPENDENCE GROUP  ORDINARY
IIF	ING INDUSTRIAL FUND  UNITS
IPL	INCITEC PIVOT  ORDINARY
IRE	IRESS MARKET TECH.  ORDINARY
IRN	INDOPHIL RESOURCES  ORDINARY
IVC	INVOCARE LIMITED  ORDINARY
JBM	JUBILEE MINES NL  ORDINARY
JST	JUST GROUP LIMITED  ORDINARY
KAR	KAROON GAS AUSTRALIA  ORDINARY
KSC	K & S CORPORATION  ORDINARY
KZL	KAGARA LTD  ORDINARY
LGL	LIHIR GOLD LIMITED.  ORDINARY
LNN	LION NATHAN LIMITED  ORDINARY
LYC	LYNAS CORPORATION  ORDINARY
MAH	MACMAHON HOLDINGS  ORDINARY
MBN	MIRABELA NICKEL LTD  ORDINARY
MCC	MACARTHUR COAL  ORDINARY
MCR	MINCOR RESOURCES NL  ORDINARY
MDL	MINERAL DEPOSITS  ORDINARY
MIN	MINERAL RESOURCES.  ORDINARY
MLB	MELBOURNE IT LIMITED  ORDINARY
MLE	MACQUARIE LEISURE  STAPLED SECURITIES
MLI	MINTAILS LIMITED  ORDINARY
MLX	METALS X LIMITED  ORDINARY
MMG	MACQUARIE MEDIA  STAPED SECURITIES
MND	MONADELPHOUS GROUP  ORDINARY
MRE	MINARA RESOURCES  ORDINARY
MYO	MYOB LIMITED  ORDINARY
NCM	NEWCREST MINING  ORDINARY
NHC	NEW HOPE CORPORATION  ORDINARY
NXS	NEXUS ENERGY LIMITED  ORDINARY
OGC	OCEANAGOLD CORP.  CHESS DEPOSITARY INT
ORG	ORIGIN ENERGY  ORDINARY
OXR	OXIANA LIMITED  ORDINARY
PDN	PALADIN ENERGY LTD  ORDINARY
PLA	PLATINUM AUSTRALIA  ORDINARY
PMM	PORTMAN LIMITED  ORDINARY
PNA	PAN AUSTRALIAN RES  ORDINARY
PRG	PROGRAMMED  ORDINARY
PSV	PERSEVERANCE CORP  ORDINARY
PVE	PO VALLEY ENERGY LTD  ORDINARY
RDF	REDFLEX HOLDINGS  ORDINARY
RIO	RIO TINTO LIMITED  ORDINARY
RIV	RIVERSDALE MINING  ORDINARY
RSG	RESOLUTE MINING  ORDINARY
RSP	RESOURCE PACIFIC  ORDINARY
SBM	ST BARBARA LIMITED  ORDINARY
SDM	SEDGMAN LIMITED  ORDINARY
SEK	SEEK LIMITED  ORDINARY
SEN	SENETAS CORPORATION  ORDINARY
SGM	SIMS GROUP LIMITED.  ORDINARY
SGN	STW COMMUNICATIONS  ORDINARY
SGX	SINO GOLD MINING LTD  ORDINARY
SLV	SYLVANIA RESOURCES  ORDINARY
SMY	SALLY MALAY MINING  ORDINARY
SRV	SERVCORP LIMITED  ORDINARY
SSM	SERVICE STREAM  ORDINARY
SST	STEAMSHIPS TRADING  ORDINARY
STO	SANTOS LTD  ORDINARY
STV	SUNRAYSIA TELEVISION  ORDINARY
SUL	SUPER CHEAP AUTO GRP  ORDINARY
SYB	SYMBION HEALTH LTD  ORDINARY
TAH	TABCORP HOLDINGS LTD  ORDINARY
TIM	TIMBERCORP LIMITED  ORDINARY
TLSCA	TELSTRA CORPORATION.  INSTALMENT RECEIPTS
TPI	TRANSPACIFIC INDUST.  ORDINARY
TRS	THE REJECT SHOP  ORDINARY
TZN	TERRAMIN AUSTRALIA.  ORDINARY
WAN	WEST AUSTRALIAN NEWS  ORDINARY
WCB	WARRNAMBOOL CHEESE  ORDINARY
WES	WESFARMERS LIMITED  ORDINARY
WPL	WOODSIDE PETROLEUM  ORDINARY
WSA	WESTERN AREAS NL  ORDINARY
WVL	WINDIMURRA VANADIUM  ORDINARY


----------



## eieio (9 March 2008)

Hello again Motorway. That B% summary is very impressive. I bought du Plessis' book in anticipation of getting the Updata software, as I have always had a soft spot for P&F. Right now you are certainly demonstrating its versatility - have you had a look at P&F OBV yet?


----------



## motorway (10 March 2008)

> have you had a look at P&F OBV yet?




Yes ... You can do any chart of any chart..

You are looking for 
change in behavior between
Price & volume through time

Divergence and inharmonious  behaviour (speed ).




motorway


----------



## motorway (11 March 2008)

B%

Is displaying fairly high levels of pessimism
inability to rally on to 50% is very significant

You can not have a sustained bull market with the index below 50%

B% is  above the extreme FEAR reading of 6.6%

Though the index itself is nearly at the same level

That is suggestive of an extended bottoming pattern

ie some way from a sustained advance

But the B% is very adaptive ... it reflects  the constant coiling of support and resistance.......So it  can move quickly esp as resistance and support form apexes .

The Line version can be interpreted just like a stock chart

Price Volume & Time in the context of position..

Selling Climax , Automatic rally , Secondary Test  pending...

B% is at 28.2%

motorway


----------



## motorway (12 March 2008)

B% can be made has sensitive as one wants it to be

Here is the same 2%

With a B% calculated from a .5% box size ( .5% X 3 reversal charts )

It does not seem to turn any quicker but
does definitely get to 50% quicker

changing from High/low to close would change the behaviour as well.
( could well turn a day earlier )


motorway


----------



## motorway (15 March 2008)

> %
> 
> Is displaying fairly high levels of pessimism
> inability to rally on to 50% is very significant
> ...




Update .......

You can see 15/01/00 peeping over the left hand side

You can also see how the behavior (three close spikes below 30)

is significant 

motorway


----------



## Timmy (16 March 2008)

Motorway, thank-you very much for the posts and detailed charts.

I particularly like this idea ... 


motorway said:


> the B% ....
> 
> The Line version can be interpreted just like a stock chart



...as a complement to the B% P&F putting the B% in line with time/bar charts like this is very useful visually.


----------



## lioness (16 March 2008)

motorway said:


> Here is the B%
> and here are the stocks voting YES atm
> 
> took about 5 seconds all up of calculation time
> ...




Motorway, you missed EXT which is impossible to be off your list as it has beaten 97% of all stocks on the market on percentage gains.

Can you check that code and have another look at it for me please.

I think you are wrong on this one.


----------



## eieio (16 March 2008)

EXT is not yet a component of the All Ordinaries I'm afraid. Maybe real soon now though


----------



## lioness (16 March 2008)

eieio said:


> EXT is not yet a component of the All Ordinaries I'm afraid. Maybe real soon now though




Oh, sorry about that Motorway and thanks eieio for pointing that out.

As you say, soon it will be re-rated.

Cheers.:


----------



## motorway (17 March 2008)

> Can you check that code and have another look at it for me please.




lioness


If EXT was in the ALL ORDS

It would still be a no vote as regards the B%

Here is EXT's   2%x3 P&F chart.........

Analogies are useful

Think of the chart as a coiling serpent
it coils in order to generate thrust..

The "head" is constantly seeking 
support and resistance 

propelled by demand and supply
and generating demand and supply

EXT was on a simple "buy signal" ( I do not favor that name ) in February
But since March the last signal is a simple "sell" 

support and resistance are coiling closer 

rising bottoms and a ceiling top..

.................................


A Bottom is in a sense not a place but a process
A process that unfolds and is found

B% has moved up from ~20% to 24.3%

The EXT chart shows how quickly
readings could  change.

To get to 50% for example  the index hardly needs to change in terms of points.
But only  the position of the last price of each stock
in relation to the "last points" of the coils of support and resistance.

eg as seen in EXT


motorway


----------



## lioness (18 March 2008)

Motorway,

Thanks for the analysis on EXT, obviously things can change quickly if a positive announcement came out for example.

But at the moment, you are saying it is a sell in March, is that correct?

Also on your charts, it looks like support and resistance are coming to a head which means it either breaks up or down. Is this understanding correct???


----------



## Timmy (18 March 2008)

Motorway,

the B% calculation on a straight break of a top/bottom ... is there a way to incorporate an assessment of 'position' into the calculation ... such that a break after a coil is differentiated from a break after a long column and small reversal ... probably I am being too mechanical, but just a thought/question?


----------



## motorway (18 March 2008)

Timmy said:


> Motorway,
> 
> the B% calculation on a straight break of a top/bottom ... is there a way to incorporate an assessment of 'position' into the calculation ... such that a break after a coil is differentiated from a break after a long column and small reversal ... probably I am being too mechanical, but just a thought/question?





Position is such an important factor

because you need to know
If you are coming or going 


The B% is in a sense a measure of risk close to the right hand side of the chart..

It is also a measure of position in terms of risk ( and hence opportunity )
It asks is there support or resistance NOW..

A stock does not fall through support
if it is falling, There is no support..

Watching the B% unfold from before the market top
Has increased my respect for it's simplicity

eg Last few days  Property and financials are making a presence

( does not mean they are a buy, But they have found some support while other stocks have lost it........ROTATION )


B% gets over 70% and money becomes tight......RUN FOR THE HILLS 
B% gets under 30% .....WAIT FOR THE BOTTOM

There is a lack of money at both extremes for different reasons..


We can then do other scans for POSTION

eg ( EXAMPLE ONLY )
P&F buy signal ( for these troubled times above two X columns )
+ above 45 degree trend line + vertical objective 3 times higher than support point )



> Code Name	Long Name
> AGM	ALLEGIANCE MINING  ORDINARY
> AMU	AMADEUS ENERGY  ORDINARY
> ANN	ANSELL LIMITED  ORDINARY
> ...




small list 

motorway

PS B% is not much changed ( Just different Delegates voting  )


----------



## motorway (21 March 2008)

> ABP,ABACUS PROPERTY GRP.  UNITS/ORD STAPLED,1,1,1,3,3,
> AGM,ALLEGIANCE MINING  ORDINARY,1,1,1,3,3,
> AIX,AUSTRALIAN INFRASTR.  UNITS/ORDINARY,1,1,1,3,3,
> ALZ,AUSTRALAND PROPERTY  STAPLED SECURITY,1,1,1,3,3,
> ...






B% readings all moved higher

2% 1% & .5%

The list of stocks above are the 83 stocks that have as their  last P&F signal
A "buy signal" on all three filter percentages

ie 2%x3..........1%x3...........0.5%x3

being "bullish" on one  list does not  qualify a stock for being on the other two.

The index went down on very high volume
But the B% ( the number of "bullish" ) stocks increased

The index did not make "new low ground" 

The Bullish percents however  did make new high ground

motorway


----------



## josjes (21 March 2008)

motorway said:


> B% readings all moved higher
> 
> 2% 1% & .5%
> 
> ...



I take this as a tentative good sign for the bull 

Question: 
1. your 18 March list include LGL, NCM, WPL but not in Today's list, does this mean that they are in the sell signal list? 

2. 
*being "bullish" on one list does not qualify a stock for being on the other two*. Can you please explain further on this ? are you referring that being in the 2%x3 does not qualify being on the 1%x3 ? If so how do you tell which stock is in which list of %B ? and why ?


----------



## motorway (21 March 2008)

josjes said:


> I take this as a tentative good sign for the bull
> 
> Question:
> 1. your 18 March list include LGL, NCM, WPL but not in Today's list, does this mean that they are in the sell signal list?
> ...




*1*... It means their charts are no longer "bullish" on at all three filters

Trends in the mkt are sustained by rotation between sectors and stocks..

There are 193 stocks "bullish" on at least one of the charts
But only 83 "bullish" on all three .

A stock might be "B" on the 2%x3  but "bearish" on the .5% chart
or a stock could be "bullish" on the .05% and bearish on the 2%

only 83 are bullish on all three close of Thursday..

It is a very good sign...The negative sentiment  measured has been  DIRE

it is all DOOM... The most negative in maybe two decades at least.

However 

The 2%B% is close to making a very significant reversal formation

( could come next week maybe Tuesday )

That would maybe signal the end of winter and the beginning of spring..

ie A very immature and infantile Bull.... So you don't want to buy a sickly or weak stock.... But one ready to go up ( Spring can be still dangerous )

There is continuous ROTATION.... With some stocks always getting ready to lead .

some on this list are very beaten down
some have been strong

You would need to do more analysis..

Here is one very beaten down
here is one of the banks

both are on the list ( which is just a starting point )

*2*... WPL is not bullish on the .5% and 1%
But still is on the 2%

motorway


----------



## josjes (21 March 2008)

motorway said:


> *1*... It means their charts are no longer "bullish" on at all three filters
> 
> Trends in the mkt are sustained by rotation between sectors and stocks..
> 
> ...




Thank you Motorway. I am getting more impressed on your method. Would you care to point out how I am able to get this B% software ? It would be a tremendous help for a medium-long term asset allocation. For a start, it would be excellent tool to decide when to be in defensive mode, move from shares to cash and vice versa into offensive mode. And which sector to get on board when the overall B% market making a turn signal to spring. As an interest also, does this tool able to forewarn the overall market trend change back in November-December last year of the imminent bear market down turn ? If so can you post the graph too ? Or has it been posted before ?


----------



## motorway (21 March 2008)

I think the b% is a very powerful tool

it is very sensitive 
But also does not give false signals

This is because of how adaptive P&F methodology is
To what is always happening NOW

over 70% on the 2%B% and  you are well and truly on risk alert

Then keep a look out for falling momentum


Any stocks or sectors that start to roll over and form tops


looking at the USA data that goes back a long way..
If Interest rates are rising too or there is a money problem 
Then that is 1929 1987 etc dynamics

P&F charts become volatile 
They show churning and make no headway etc

Look at the divergence between the B% and the index.

The bullish % was saying .. "now get out of this ,and then this ,and this 

eg it would have urged you out out of CNP approx may 07

The market can not keep going up
IF the foundations ( the individual stocks ) start to falter


Nor can it keep going down
once it hits bed rock 

At the top no one has money
it's all in and more ( leverage )
At the bottom money is a problem too

We do seem to be in a time were the cycles are quicker...
It is always the "next 6 mths" that matters

The B% is often referred to as a leading indicator

SMART MONEY 
has to buy or sell FIRST

out of or into something

in order to make a future  profit

The timeliness and the sensitivity
of the B% picks up these flows

eg look at the divergence

motorway


PS Nov  Dec the index made a new high
The B% did not
the Index then made a lower high ( a Last Point of Supply )
But the B% was falling and below 50%
Already in a Bear confirmed mode


----------



## josjes (22 March 2008)

Motorway

Thank you again for your posts so far. I am getting hooked on this market indicator B%. I have started to subscribe the DorseyWright website (trial only first), and notice that according to Bullish%, the Bank, Real Estate and Retail sectors in the US market have all given out Bull Confirmed signal (Finance Bull Alert). Can you give a quick run-down on these scetors in our ASX if they are in Bull Confirmed status ? I notice from the list of stocks above that are giving out B% of 2%,1%,0.5%, 5 Banks and few of infrastructure stocks are all in there. 

Once a stock has all the 3 B% , how likely is it that it  changes its status in a short term, i.e. how likely is it to go down south in a few weeks/months (short) term, and break its year low/support again. in other words what is the risk and reward if we take long position at this point. 
Thanks.


----------



## motorway (22 March 2008)

Here is the XFK 

The S&P 300 Financials

It is made up of  65 stocks

Here is the result of the 2% 1% .5% scan

Those that score  a 3 are bullish at all three filters

there are only 15 of them

( important it means on a down day these stocks were stronger)




> Code Name	Long Name	Score
> ABP	ABACUS PROPERTY GRP.  UNITS/ORD STAPLED	3
> ALZ	AUSTRALAND PROPERTY  STAPLED SECURITY	3
> AMP	AMP LIMITED  ORDINARY	3
> ...




The B% speaks for itself

look at the change in behavior 

motorway


----------



## motorway (23 March 2008)

> Once a stock has all the 3 B% , how likely is it that it changes its status in a short term, i.e. how likely is it to go down south in a few weeks/months (short) term, and break its year low/support again. in other words what is the risk and reward if we take long position at this point.
> Thanks.




Here is BOQ

I have overlaid a  3 column Exponential Moving average

It is Just  a signal line  The blue and red arrows show how often

Signals change ( not often )

This is the First "bullish" signal since the top

note the absence of many signals 

Do you have a knowledge of P&F ?

I could suggest some books

P&F charts because they are non linear
do not produce much in the way of whipsaws

They simply tend to stop moving..

As well as bullish or bearish
there are the trend lines
and relative strength considerations

and ( If you want ) coordinating with bar charts
There are also price objectives

(  P&F is very versatile , very powerful imo

Look how good the signals are ! )



motorway


----------



## motorway (23 March 2008)

Also note the movement becoming horizontal at the top

( Horizontal is not TIME it is RISK )

I mentioned this loss of momentum when the B% is also at high risk levels

It is what Wyckoff means by  a "CAUSE" that will have an effect..

P&F  was used by the tulip traders in Holland

maybe by Cain and Abel 

Yet it is so cutting edge

motorway


----------



## motorway (25 March 2008)

Also note how the movement also becomes horizontal at a bottom

horizontal = Risk --->To what has been prevailing

Hence it is important to define the trend and the position in the trend

B% is a valuable tool to identify aspects of this position


Since horizontal is risk to what has been
it also represents the building of a cause for what will be

Horizontal
has to be

(re) Accumulation
or
(re) Distribution

once you define the trend and the position in the trend
you have an answer

(Of course there is always more to it than that  )


Important point
horizontal on a P&F chart is not Time

It is always something else (unless it is nothing---Stocks like the banks at a 2% filter very unlikely )

motorway


----------



## josjes (25 March 2008)

ok, I kind of understand this 'horizontal' meaning. It is saying that when B% is > 70% horizontal means that watch out below we are topping out, take your profit.
When B% is < 30% and the horizontal at the bottom, means that we have a strong support here, further downside risk is minimal, grab your position. 

But this:
It is always something else (unless it is nothing---Stocks like the banks at a 2% filter very unlikely ) -=> please translate, particularly 2% filter very unlikely  ??


----------



## motorway (25 March 2008)

> ok, I kind of understand this 'horizontal' meaning. It is saying that when B% is > 70% horizontal means that watch out below we are topping out, take your profit.
> When B% is < 30% and the horizontal at the bottom, means that we have a strong support here, further downside risk is minimal, grab your position.





The B% could be over 70%  and fall back to low risk levels
While the stocks themselves hold their gains and move sideways
for an extended period

Resting and consolidating ....The RISKS have to evaporate through

a process of reaccumulation

sideways is aways new dynamics...Always the other side turning up...




> But this:
> It is always something else (unless it is nothing---Stocks like the banks at a 2% filter very unlikely ) -=> please translate, particularly 2% filter very unlikely ??




A bar chart could move sideways just because day follows night.

The P&F chart can only move sideways if there is "work" ( acc-dis )

But if the filter is too sensitive then sideways could be just noise across the buy sell spread or could just be background volatility

eg think of a penny stock churning ( so an 8% filter might be needed )

Banks could be traded on 1% and even .5% ( even less for day traders )
So sideways on a 2% filter ( And these are 3 box reversal charts)
is not just the noise of the buy sell spread or just the background volatility

It is significant change in behavior



> I kind of understand



 I think you are starting to 

motorway


----------



## josjes (25 March 2008)

Yep, starting to grab this concept now,  thanks MW for your patience. 
Can you do P&F chart and B% for one stock that I own, which has been puzzling me greatly and caused quite pain. It has been on sideway move for the last 2-3 years then in February it appeared to break through this stubborn resistance line on weekly close, but turned down again savagely to close at year low. What's the P&F chart  trying to tell that we don't know ?


----------



## motorway (26 March 2008)

Is it RIC ?


Computer and data problems tonight
so a bit of fixing before any more charts



motorway


----------



## josjes (26 March 2008)

motorway said:


> Is it RIC ?
> 
> 
> Computer and data problems tonight
> ...



Sorry, yes it's RIC.


----------



## chops_a_must (26 March 2008)

motorway said:


> Here is BOQ
> 
> I have overlaid a  3 column Exponential Moving average
> 
> ...




Interesting how you can sometimes get the same conclusion, with different analysis.

Didn't see this until just then.

I noticed AMP was especially dangerous to the upside as well, and closed the short on that. Still think that has some potential.

All very interesting...


----------



## motorway (27 March 2008)

> The negative sentiment measured has been DIRE
> 
> it is all DOOM... The most negative in maybe two decades at least.
> 
> ...




OK three "low pole" reversals on a stock chart

would be very significant...esp with the higher bottom..

( the DOW in 2003 made a powerful reversal off this pattern )

I have used the metaphor of the seasons ,, I think it is useful

Now where is Spring ?  We do not want to be mechanical but if this moves up to 50%.... That would be a lot warmer...
And it can do that in a proverbial wink  

Seasons are cyclical...

another way of saying--->



> One of the few flat statements you can make about the stock market is that any price trend will eventually be carried to excess.  John W. Schulz   ( A P&F practitioner )


----------



## josjes (27 March 2008)

motorway said:


> OK three "low pole" reversals on a stock chart
> 
> would be very significant...esp with the higher bottom..
> 
> ...




Aha... so we had THE double bottom then ?? And the widely held theory of hitting 4700 in May - June has a remote chance of materialising ???


----------



## motorway (27 March 2008)

josjes said:


> Aha... so we had THE double bottom then ?? And the widely held theory of hitting 4700 in May - June has a remote chance of materialising ???




That is a strong "bottoming pattern" 

But it could produce a fourth pole below 30

( I would not favor that ) at 6.6% it was the end of the world

I think that dire sentiment would be unlikely to return

There are a lot of stocks turning UP

Here is an XAO chart it is now possible to draw some upside objectives

look to the near one first

IF That come easy it "proves" the accumulation in the pattern..

( Those stair steps  )

A very old P&F pattern ( law of secondary bottoms )
is a bottom forming either side of the 45 trend line drawn from a top

only discussion

motorway

PS
This chart is an update from one posted in the XAO thread after the first "bottom" had been made


----------



## motorway (29 March 2008)

> There are those who think they are studying the market, when all they are doing is studying what someone has said about the market...
> Not what the market has said about itself..
> 
> Study your charts not with an eye to comparing the shapes of the formations. Rather study your charts or tape from the viewpoint of the behavior of the stock, the motives of those who are dominate in it, and the successes and failures of the buyers and sellers as they struggle for mastery on every move.
> ...





The 2% bullish percent continues to move higher reaching 40% on the 27th

and signaling ( in ChartCraft terms )* Bull Confirmed*

It is currently at 41.5% with 202 stocks now having bullish charts ( 2% x 3 )

The B% is a chart of technical positions... 

Of what is being done... Not what is being said...

P&F dissolves the patterns of appearance
into patterns of character



It is  what demand and supply are actually doing that matters...

price moving down builds the cause that will take prices up.

Support and Resistance are dynamic...


50% is still an important milestone 


motorway


----------



## motorway (3 April 2008)

The 2 percent B% is now at 49.8%...

The blue numerals 1,2 & 3

line up the lows ( the three poles ) of the B%

with the relevant action on the XAO chart.

Significant change in the technical position..

IMO The lateral move between 2 & 3 with two spike rejections
has almost been negated as meaningful zone of "distribution"

Yes it looks  a ceiling . But that is only because of the delayed ending..
Look at  the tight pattern of accumulation at 3

What looks like a ceiling is ( imo ) a floor ( at a higher level hence , a delayed ending )..........

With the B% back at nearly 50% the market is in a very good position to continue to rally.. ( More stocks are above Support and above at least some zones of accumulation...)

A little mention of the moving average ... On a P&F chart they are not averages of time.  

There has been only two crosses since 2003... One in 2003  and one in 2008.

On a 1 box reversal charts I am  using them to ( see if they )help define meaningful thrusts and change of behavior.


For discussion 
motorway

With eg Opes Prime ( as a known example ) is it any wonder that ending actions have been delayed and extended..


----------



## motorway (4 April 2008)

> 50% is still an important milestone




Was an important milestone

motorway


----------



## motorway (6 April 2008)

update


----------



## josjes (10 April 2008)

motorway said:


> Here is the XFK
> 
> The S&P 300 Financials
> 
> ...




Motorway

Could you give us an update on how's the financial doing now. I am a bit worried given the damages done in the past few days on the banks. Any worrying sign there ?
Are the list above of the 15 stocks on  2% 1% .5% scan still valid ? If not, would you mind running them again ? Many Thanks.


----------



## josjes (10 April 2008)

motorway said:


> update



Was at the Relief point last week but I think we're back verging between Hope and Despair. I hazard a guess the B% down below 50 now ?


----------



## motorway (10 April 2008)

> Code 	C1	C2	C3	Success
> AAX	1	1	1	3
> ABC	1	1	1	3
> AEZ	1	1	1	3
> ...




columns read across  2% 1% .05 %

so WHC is falling back to support ( maybe ? )

This so far is hardly a correction

2% and  1%  bullish percent  as lines under the XAO chart




motorway


----------



## motorway (11 April 2008)

> Code 	C1	C2	C3	Score
> AEZ	1	1	1	3
> AFG	1	1	1	3
> AMP	1	1	1	3
> ...




See where the B% for the XFK reached ?

probably nearly at thrill level ( thrilled that the world had not ended )


At the least a correction not unexpected


motorway


----------



## josjes (11 April 2008)

I really find it hard to swallow, with the beaten to a pulp Banks/Financials shares, I mean probably >70% of them are at 2-3 years low, how can they have 80% reading of Bullish percent. Care to explain Motorway ?


----------



## motorway (11 April 2008)

The B% is very sensitive and some would say leading indicator
of sentiment

80% for the XFK is probably at thrill level ( thrilled that it was not the end of the financial world )

Stocks started to go UP money flowed back into the sector
and sentiment ( as objectively ) measured SOARED

so at 80% it is time to be cautious
at 80% almost everyone ( including the extreme laggards )

is thinking of THE BOTTOM..

So caution is warranted

If stocks want to react back and find support... LET THEM


Look at AMP...

People would be thrilled

It has stopped going down
and started to go up

demand and supply 

The B% is not the index
but the sentiment at the level of the individual components

sentiment turns way before the index makes any sort of highs..

The B% leads ( remember the divergence at the top )

It is saying be careful ATM

stocks found support ( no more margin loan problems ? )

But are now above that support

so ?

motorway


----------



## Timmy (12 April 2008)

josjes said:


> I really find it hard to swallow, with the beaten to a pulp Banks/Financials shares, I mean probably >70% of them are at 2-3 years low, how can they have 80% reading of Bullish percent. Care to explain Motorway ?




Hi josjes - a little while ago Wayne started a thread "Deconstructing Indicators", or something like that.  I thought that thread should be one of the top ten threads ever as in order to understand what an indicator is telling you really need to, well... understand what the indicator means...

So, for example, an RSI is NOT telling you to buy when its oversold or sell when it overbought or buy when it crosses above 70 or sell when it crosses below 30 .... all the RSI indicator is telling you is a fairly simple characterisitic of the price movement over the past "X" periods ... Wayne was saying (amongst other things) in his deconstruction thread to look very closely at the equations the indicator employs and from these you could see exactly what the moveoment in the indicator means.

I use the RSI just as an example ... the indicator in question here is the %B indicator.  Earlier posts in this thread show exactly how this is constructed and it is well worth studying these posts closely to gain an intimate understanding of the indicator, if you plan to use it.  Only by understanding exactly what the %B is showing does it become clear ... what it is actually showing.

I hope this helps.  And can I add thanks to Treefrog for starting this great thread.


----------



## motorway (19 April 2008)

> This so far is hardly a correction




B% suggests stocks are simply pulling back rather than breaking support.

This XAO P&F has built a ( nice )  stepping stone.



motorway


----------



## Whiskers (19 April 2008)

motorway said:


> > This so far is hardly a correction
> 
> 
> 
> ...




Yes I agree. 

I think the term I used was having a little spell, before pushing on. 

Good to see confirmation from different methods.


----------



## josjes (15 May 2008)

Hi Motorway

Now that  XAO is on the verge of breaking 6000, would you care to post your analysis of B% and P&F chart of XAO with your thoughts on how is the market going forward ? Always appreciate your analysis. Many thanks. 

JJ


----------



## motorway (16 May 2008)

Hello josjes..

I have just installed a major upgraded version
of the Updata Software ..

It is really an impressive 
improvement.

faster , more powerful scanning ,stability etc

However a few teething problems 
that are effecting data linking and particularly 
Breadth like B% charts
So hope to soon be able to update the thread

XAO is moving up through a zone where there was little volume on the way down....This explains the absence of any definitive jump up


But a tentative probing ( like walking on thin ice ) with rotation between
the financials and the materials flip flopping

There are springboards above and below this point...

The volume activity distribution histogram is one of the new toys .

B% was very strong
and should be even stronger

B% would suggest there is support under the price activity

( The ice is not so thin )

DYOR
motorway


----------



## motorway (23 May 2008)

> However a few teething problems
> that are effecting data linking and particularly
> Breadth like B% charts
> So hope to soon be able to update the thread




All fixed

have a look at this chart

B% coordinated with a P&F

I have marked some of the divergences

look left
look at the B%

what do you see ?

motorway


----------



## motorway (23 May 2008)

> look left




Put a blue line here 

to make it easier


This chart is new highs as a % of new highs and lows
( 50 day period )

It moves fairly fast

reached 90%

back down to 48% present...

motorway


----------



## josjes (24 May 2008)

Thanks Motorway.
B% and P&F divergence, which is not healthy. Market is going up but B% is moving lower. 
It's quite simple really, only OIL, Coals, Materials,GOLD that are moving this market, the rest are mostly DOG. 
We have hit the target for the bear market bounce (the blue line), from here on down towards 5600 ?? 

What say you ?


----------



## motorway (5 June 2008)

It is all about
the harmony or lack between
the various attributes 

of Price , Volume & Time...

harmony  = some sort of continuation
inharmonious( wyckoff ) = some sort of possible turning point

Index has pulled back to halfway zone

Price bars are congested and today's bar is narrow 
and with a close if not at the middle. off the bottom..

There was an increase of volume today ( not shown )

B% has slipped lower ( into bear confirmed ) BUT not from a high risk level
(~70% )

Price is moving DOWN but with not much "ease of movement"

Look at the % of highs to new Highs and lows index !

See the goodish bounce from yesterday ?

Early Strength ?

( Market in fact tried to go up from the 28th )

Springboard ?

Only if it happens 




> It's quite simple really, only OIL, Coals, Materials,GOLD that are moving this market, the rest are mostly DOG.
> We have hit the target for the bear market bounce (the blue line), from here on down towards 5600 ??




I see some support here ..
But
Support is not any line drawn from the past
It is  something met (or not)

and always up ahead...

DYOR 

For Discussion 





motorway


----------



## tcoates (6 June 2008)

Not sure if anyone has posted this link before, but came upon this link 

http://208.149.108.72/cgi-bin/foxweb.exe/fwuniv?email=&lesson=3&doc=index3_2.html

through a page that I went to from elitetraders

http://elitetrader.com/vb/showthread.php?threadid=122236&perpage=6&pagenumber=148

If you want to find out more about PnF charting, it is worth a look. The thread (about 150pages+) on elitetrader is all point and figure charts.

Tim


----------



## motorway (7 June 2008)

% highs 

continued to  move higher




> The High-Low Index
> This index is a short-term indicator .
> 
> The two critical levels are 30 percent
> ...





*This index is a short-term indicator *

It is one way of looking ( for example ) into

high and low poles that might be in play on the B% chart

motorway


----------



## motorway (7 June 2008)

But

The 







> PRIMARY MARKET INDICATOR
> FOR GAUGING RISK




( and opportunity )


is the B%

and as stated it is in Bear confirmed.

motorway


----------



## motorway (15 June 2008)

josjes said:


> Thanks Motorway.
> B% and P&F divergence, which is not healthy. Market is going up but B% is moving lower.
> It's quite simple really, only OIL, Coals, Materials,GOLD that are moving this market, the rest are mostly DOG.
> We have hit the target for the bear market bounce (the blue line), from here on down towards 5600 ??
> ...




A couple of updates

B% is in a column of Os
That column is lower then the last column of Os

BUT

The "Position" is now in the green zone

There is a folktale character ( name ? )
who was always happy walking uphill
but became full of despair when walking down.

( because he Knew what would soon lay up ahead  )

cycles

Posted a longer term chart
with some comparisons 

That are suggestive of some possibilities ( like everything there are two sides )

Something to consider at different points in the cycle

is that we could
expect to experience changes  in the behavior and outcome of 
various accepted setups and methods

What was tried and true etc

Think of how

breakout patterns
( eg descending triangles )
Relative strength  ( eg perseverance or reversal )

Volume patterns

etc

All could be different with B% above 70 or below 30

and depending also  on what degree or leg of  a larger cycle
the particular reading resides ( eg third of a bottoming cycle ?)

The two sides ( bearish and bullish ) relate to How close together these "bottoms" are occurring.

tIme vs Work ( is there enough )

eg (one) Thing to look out for 
are Higher LOWS and inharmonious action..

For Discussion
motorway


----------



## rub92me (15 June 2008)

Motorway, or anyone else: What are some good books on getting a good understanding of how to read P&F charts? I've had a bit of a look around and see some websites with the basics explained, but would like to dig a bit deeper. I'm seeing mixed reviews for the Jeremy du Plessis and Thomas Dorsey books.


----------



## It's Snake Pliskin (16 June 2008)

rub92me said:


> Motorway, or anyone else: What are some good books on getting a good understanding of how to read P&F charts? I've had a bit of a look around and see some websites with the basics explained, but would like to dig a bit deeper. I'm seeing mixed reviews for the Jeremy du Plessis and Thomas Dorsey books.




Du Plessis is the authority on PF charting. I have the book which is not cheap but it is good. Some myths dispelled in good books.


----------



## rub92me (17 June 2008)

Thanks Snake, looks like that one is the most comprehensive one so may as well spend a little extra if it's good.


----------



## Timmy (17 June 2008)

Thanks Snake, I haven't read the DuPlessis book but it sounds very helpful.  Snake, you mention myths being dispelled, is it possible for you to expand on what you mean with respect to P&F and the du Plessis book?


----------



## It's Snake Pliskin (17 June 2008)

Timmy said:


> Thanks Snake, I haven't read the DuPlessis book but it sounds very helpful.  Snake, you mention myths being dispelled, is it possible for you to expand on what you mean with respect to P&F and the du Plessis book?




Timmy,

It doesn't really give a typical myth busting rundown on PF charting but rather gives a very good introduction to what they are, before it goes into the nitty gritty. In the introduction I learnd a lot. 

It is interesting to see how they evolved also, not created, originally not for charting

I believe you need to read more than one book though. Overall I am happy with it.


----------



## motorway (17 June 2008)

Hi Rub

Best way to learn P&F is to do it

But you need to understand the principles that underlay P&F

What is it that makes a box
what does changing the reversal do
What are trend lines measuring
what is significant about 45 degrees

What  draws the chart and makes the chart move.

Du Plessis's book is a compendium 

Of various aspects and practices of P&F

An appendix lists the books he has consulted

You will learn more by reading those books ( and others )
Than you will from this one book

However as a thorough introduction with 
a lot of examples esp on construction

it is OK

There are  only a few texts on P&F
For the reason many charting softwares can not draw them
or very well..

It is an old technique  ( Holland Tulip traders ? )
Probably re invented many times

pre dates bar charting in the USA
started to be used 1880s

It is not removed from the reality of the tape


It is just Xs and Os   

too simple

but so are the 1s and 0s that create all the wonders of the computer age

So simple is not the same as profound..
Or not being effective


Some OLD books are very good
because they are not removed from the reality of the "TAPE"

Some quotes below are from the free E-Book I posted a few times
Though it is ON P&F RS charting

it is still P&F , It is these principles that need to be understood

The P&F chart NEVER has to move sideways
It only does so IF..

The Author ( clay allen ) refers to "Hidden Order"

Authors from the late 1800s and early 1900s

Referred to manipulation ... A 1926 book compares charts drawn by roulette wheels to stock charts

And how the way to make the Random chart look like a Stock chart
This comes back to the 45degree movement ( no matter what the box size is )

It is what Clay Allen obviously is calling hidden order



> Another important aspect of performance measurement is the element of time.
> The back and forth movement of this component of the performance measurement process is recorded across the horizontal X-axis on the chart. A new column is recorded whenever a reversal of relative performance exceeds the minimum absolute amount. This converts the horizontal X-axis from the measurement of time to the measurement of alternations of trend. The alternation of trend is a function of the stock’s volatility and that is a proxy for the stock’s risk. Therefore the X-axis can be characterized as measuring risk and not time.








> Hidden Order?
> The stock of Best Buy was chosen for this analysis because its performance over the year 2003 was among the top 100 performing stocks in the Market Dynamics database. The time period covered by this study is 253 days, or one full year.
> The lower chart is a 3-point, point-and-figure chart of the relative strength of BBY over the past year. This chart has been cropped to focus on only the record for 2003.
> 
> ...




Manipulation Detector
Hidden Order
Invisible Hands

Xs and Os 
Charts not draw by *t*ime ( small t )
But by something else

The rhythm of broken rhythms


Here is the link to the book on RS P&F

http://www.clayallen.com/Winning The Performance Game 12-16-2006.pdf


motorway


----------



## rub92me (17 June 2008)

Thanks motorway. I can see lots of reading coming up.  I'll be on plenty of long haul flights over the next couple of months so that will help pass the time a bit.


----------



## Timmy (18 June 2008)

It's Snake Pliskin said:


> Timmy,
> 
> It doesn't really give a typical myth busting rundown on PF charting but rather gives a very good introduction to what they are, before it goes into the nitty gritty. In the introduction I learnd a lot.
> 
> ...




Thanks Snake, yes it sounds like a good one


----------



## motorway (22 June 2008)

For Discussion


http://www.qwafafew.org/?q=filestore/download/249

G. C. Selden was a very close  associate of Richard Wyckoff

What was old is new again

Tape reading ---> Behavioural Finance

But tape reading was more than just Psychology.



Hope and Fear

some more context ( to compare with now )

Fear Driven bottom--->  An Event

Hope unfolding top---> A Process

seen in

2000 & 2001

Also updated chart of the present.

A major juncture ( bottom pivot )
tends ( context--> what is the character of the instrument)
 to need a significant 
cohesion or alignment of
the tools( factors )
of manipulation



Price......uncorrected drive
Time .......running  out
news..... BAD



motorway


----------

