Spydertrader's Jack Hershey Equities Journal II

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I noticed that the chartscript "Hershey Equities Chartscript Version 4.1" does not always show charts that are in DU with a green background.

For example, the DU script listed these symbols from my FU as being in DU for today:

ANDE CBEY CHAP CMED DXPE EZPW GMXR IIIN ISE LMIA MGPI NEU OMNI TIE TWPG

However when I run the Hershey Equities Chartscript 4.1, CMED, MGPI, and NEU all show up without a green background.

I thought the green background represented that the symbol was in DU? No big deal, just wondering if I am doing anything wrong here by ignoring the background on these stocks?

Cheers,

Adrian
 
Quote from OpenTrader:

Sometimes I think you have to take the dryup scan with a grain of salt. For example, it suggests NEU is in drup on 9/08. But to my eye the volume just does not look in dryup.

Does anyone else sometimes ignore the chartscript when their eye tells them a different story?

Thanks for your help.
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Opentrader,

Of the DU stocks today that do not have a green background, each appear to have volume exceed the bottom horizontal line, which I believe is the Dryup.

So I guess we are both asking the same question. Why are these symbols showing up as DU in one script, but not appearing as DU in another?

Can anyone shed some light on this?

Thanks,

Adrian
 
DU is more of a concept but not an exact number. In the video Mr Hershey uses unusual volume and the appropriate TA setups to trigger a trade. My gut instincts tell me that you can ignore DU Volume as a pre entry criteria and focus more on unusual volume and chart patterns for suitable entry. I would recommend testing what I wrote more before
using real money.
 
Just to provide a little clarity .....

The concept of 'Dry Up' occurs over and over again throughout the natural cycle of a particular equity. Many traders have attempted to create specific formula in an effort to quantify specific 'Dry Up' levels. However, as we discovered in Journal I, Dry Up values to not materialize as a 'line in the sand.' Rather, Dry Up values exist within a range of values. Hence, Jack's use of the 'eyeball' technique to determine whether or not a stock finds itself in Dry Up.

In an effort to obtain most of the values which could represent Dry Up Volume Levels, we use statistics to capture 98% of the values underneath a bell curve. By using standard deviation as our limiting factor, we do, on occasion, receive 'false positives' with respect to an equity finding itself in Dry Up. Such appears to be the case with NEU.

With respect to why some stocks appear in Dry Up in later versions of the Hershey Chartscripts but not in earlier versions (or vice-versa), we now use a three month average (as described by Jack in the Oddiduro Thread) rather than a six month average for calculating Dry Up Volume levels. Using a shorter time frame for calculating Dry Up levels allows us to use the most recent price and volume activity in an effort to arrive at a more accurate calculations.

Keep in mind that using Dry Up Values for entry represents a 'beginner' methodology for trading Hershey Stocks. Eventually, one should move into watching Unusual Volume, and other criteria for trading Hershey Equities.

Good Trading all.

- Spydertrader
 
Quote from Spydertrader:

Just to provide a little clarity .....



- Spydertrader
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Excellent. I understood the reasoning behind the bell curve and that DU is not a single number. Just wasn't sure why the principles used in one script may not apply to another.

As always, one is never left without answers on this forum.

I hope everyone's week is profitable.

Cheers,

Adrian
 
Speaking of unusual volume, on one of Jacks recent uploaded videos from Tucson he mentioned an analog to Qcharts Unusual Volume available in Tradestation. I don't see anything like it though and was wondering if any other TS users know what he was talking about or if any of you converted WL stuff to TS.

Many thanks in advance.
 
Spydertrader,

Did you take any action on it?

I didn't get into it on the 7th and figured that horse has left the stable. Just looking at the huge volatility that has entered into the stock, not to mention the huge spike in volume seems to say that this isn't behaving normally.

Too risky for me right now :)

<img src="http://www.elitetrader.com/vb/attachment.php?s=&postid=1196444"/>
 

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