Spydertrader's Jack Hershey Equities Journal

Status
Not open for further replies.
2005-03-24, Thursday - TASR

After falling in price this morning on low volume, TASR has rallied showing large increases in both Price and Volume. Actual Volume for TASR exceeded Calculated First Rising Volume (FRV) Levels over 4 hours before EOD. Actual Volume for TASR exceeded calculated Dry Up Volume (not pro-rata) at 10:49 AM, but Price ($11.25 USD), MACD (-.0328), and The Stochastic Indicator (10.5385) each fell outside normal parameters. However, at 11:40 AM, Actual Volume had rapidly increased to levels exceeding FRV within a 50 minute timeframe- a phenomenon I had not previously experienced. Price for TASR at the time Actual Volume surpassed FRV levels held at $12.85 USD (significant Price Improvement), and both MACD (+.2987) and The Stochastic Indicator (94.9228) had confirmed our buy signal.

As much as I would like to report entering a trade with TASR, I cannot truthfully do so. The responsibility for this error falls exclusively onto my shoulders. Having never witnessed such a dramatic turnaround in a stock (one which clearly fell way outside our trading parameters) in such a short period of time, I allowed my confusion to alter my thinking. For the first time in a very long time, I doubted what the system told me to do. My error resulted in a missed opportunity. Fortunately, I have made the appropriate notations in my handwritten trading Journal and online (here, in this Journal) in order to avoid repeating the same mistake in the future.

To those individuals that did follow what the system told you to do, congratulations on an excellent trade.

I hope you find the above information helpful.

- Spydertrader
 
Well, I'm not sure why you're saying you didn't follow the rules. It did not fit the rules - some news hit the wires after 11am. That is the price of religiously following a system. Once you go outside of it to take a trade, you risk breaking it again in the future.

Good luck with the CUTR trade! That degree of volume is outside my comfort zone - I stick to the 200,000 avg volume rule though I understand Jack meant this as a parameter for traders using larger positions. Admittedly, I might be breaking the system that way, but I think it's less harmful to add parameters that avoid taking trades rather than ones that loosen your system and enable you to take more trades.
 
Quote from sluzbenik:

Well, I'm not sure why you're saying you didn't follow the rules. It did not fit the rules - some news hit the wires after 11am. That is the price of religiously following a system. Once you go outside of it to take a trade, you risk breaking it again in the future.
More...

I like your viewpoint, but when volume reached FRV Levels, I should have entered the trade. The game had changed, and I failed to adapt. The system says to enter on the breach of DU Volume (or pro-rata depending on personal preference) or when volume reaches First Rising Volume levels by EOD - whichever comes first. I just didn't listen to the system. We all make mistakes. I've certainly made my fair share over the years. The important thing is to learn from those mistakes and to avoid repeating them - providing the trader an opportunity to turn the mistake (a negative) into a learning experience (a positive).

Quote from sluzbenik:

Good luck with the CUTR trade! That degree of volume is outside my comfort zone - I stick to the 200,000 avg volume rule though I understand Jack meant this as a parameter for traders using larger positions. Admittedly, I might be breaking the system that way, but I think it's less harmful to add parameters that avoid taking trades rather than ones that loosen your system and enable you to take more trades.
More...

Thank-you for the kind words with respect to CUTR. I normally avoid stocks trading underneath 200,000 average daily shares due to the number of positions I like to trade (and my own comfort zone). However, I didn't feel 500 shares would 'move the market' on a 145,000 share daily average stock. Keep in mind, Jack often approaches his self imposed limit of 100,000 shares maximum because of his large account. As a result, he once had the minimum volume set to 400,000 shares. Most of us don't have access to that kind of an account. Ultimately, it comes down to personal preference (as you indicated in your post). I have no doubt some individuals wouldn't hesitate to trade on a minimum volume significantly lower than CUTR showed today.

Again, thanks for the kind words regarding CUTR and TASR. As always, I appreciate your contributions to the Journal.

- Spydertrader
 
2005-03-24, Thursday - CUTR Update

Actual Volume for CUTR reach FRV levels by EOD. As a result, I hold the 500 shares overnight. Since price for CUTR reached an intraday high of $19.25 (an improvement of .70 over our purchase price), we improved our stop accordingly. Our stop now holds at $18.32 USD.

- Spydertrader
 
Spydertrader - 3 questions for you.

I've been working on the AmiBroker code and I have a handle on getting buy/sell indicators. When I compared my signal for a given stock with those that would have been (or were) generated through the Wealth-Lab scripts we were close but not always exactly the same. I was trying to figure out why w/o completely understanding the Wealth-Lab code and I have a question.

I'm not sure but it looks like that the WL code works backwards from a sell point to find if the run up occured in 6, 7, or 8 days. If this is not true then you can skip the rest of the question. If it is, this would explain the difference as I worked forward from 6 months ago and looked for 6 to 8 days forward to see when the price went up 20% In some scenarios the results are the same, but there are others where maybe the price run up was 11 days (more than 8) and I caught the first 8 and the Wealth-Lab script caught the last 8 of the 11. (Hope that makes sense). So, can you tell me if the WL script is working backward from current to 6 months past? If not, I'll have to see why else I might be off.

Question 2: If this is true (that your script works backwards) I thought about adjusting my code to work that way so our results would be the same - and then I realized that you might not be getting completely accurate DU readings if you work backwards. If something has run up over 11 days and you get the last 8 days, then 3 of your 5 volume numbers for your DU5 are actually occuring after the start of a slightly earlier 8 day run up - which may not be what you'd want if you were trying to anticipate the next run up. Again, if you arn't working backwards this is irrelevant - but if you are this is worth thinking about if I made myself clear.

Question 3:

I saw earlier that you posted the following:

DU cycle - add lowest volume during each cycle divided by the number of cycles.

Du 5 - lowest volume averaged 5 days before breakouts averaged over number of breakouts

Du 10 - lowest volume averaged 10 days before breakouts averaged over number of breakouts

Du 20 - lowest volume averaged 20 days before breakouts averaged over number of breakouts (Closest to Chart Script)

Can you explain one of these for me. Does DU 5 mean that you simply take the volume for the 5 days before the first day of the 6 or 8 day cycle and come up w/ an average volume for these 5 days - and then you average this average with the other breakouts? Your writing is usually extremely clear so I'm guessing that I don't quite have it.

Thanks. I hope w/ some input I can have some AmiBroker code up shortly.

Mike L.
 
Quote from mlsignups:

I've been working on the AmiBroker code and I have a handle on getting buy/sell indicators. When I compared my signal for a given stock with those that would have been (or were) generated through the Wealth-Lab scripts we were close but not always exactly the same. I was trying to figure out why w/o completely understanding the Wealth-Lab code and I have a question.
More...

I have yet to use Wealth-Lab to develop the Buy / Sell signals. I only use the Hershey Chartscripts for determining DU Volume and (with the latest Version) 'Score.' While I am currently testing a few possible scenarios for automating the Volume Signal & Price, MACD, Stochastic confirmation; I have yet to include these items in the Chartscripts currently posted on the Wealth-lab.com web site.

Quote from mlsignups:

I'm not sure but it looks like that the WL code works backwards from a sell point to find if the run up occurred in 6, 7, or 8 days. If this is not true then you can skip the rest of the question. If it is, this would explain the difference as I worked forward from 6 months ago and looked for 6 to 8 days forward to see when the price went up 20% In some scenarios the results are the same, but there are others where maybe the price run up was 11 days (more than 8) and I caught the first 8 and the Wealth-Lab script caught the last 8 of the 11. (Hope that makes sense). So, can you tell me if the WL script is working backward from current to 6 months past? If not, I'll have to see why else I might be off.
More...

Yes, the code looks backwards in time roughly 6 months (127 bars) seeking a 20% increase in price from low to high. You could use open to open, close to close, close to open, open to close or any other combination to arrive at the 20% increase in price. I felt the method of choosing held less importance than obtaining a timeframe before which one needed to look for "unusually low volume levels" (to use Jack's words). The script also returns price increases that occurred over less than 6 days. DCAI, for example had a few at 2 days. It counts backwards looking for a "low bar" and then determines if price fits the criteria from that particular point. If not, the script looks for an increasing number of days over which price may fit the requirements stipulated. This "low bar" stipulation looks for the last low bar in a particular cycle.

Quote from mlsignups:

Question 2: If this is true (that your script works backwards) I thought about adjusting my code to work that way so our results would be the same - and then I realized that you might not be getting completely accurate DU readings if you work backwards. If something has run up over 11 days and you get the last 8 days, then 3 of your 5 volume numbers for your DU5 are actually occurring after the start of a slightly earlier 8 day run up - which may not be what you'd want if you were trying to anticipate the next run up. Again, if you aren't working backwards this is irrelevant - but if you are this is worth thinking about if I made myself clear.
More...

Crystal clear. You now understand why I didn't want to provide daily numbers for all the methods I use for various Dry Up Volume calculations. Because of the numerous interpretations of how to quantify Dry Up Volume from a mathematical (formula based) perspective, I hoped others would test a variety of different methods of Dry Up Volume calculation and determine their effectiveness. It has long been my contention that we may actually find ourselves attempting to quantify that which may be unquantifiable. To this end, I added the DU Volume Range to the latest update of the Hershey Chartscript.

Quote from mlsignups:

Question 3:

I saw earlier that you posted the following:

DU cycle - add lowest volume during each cycle divided by the number of cycles.

Du 5 - lowest volume averaged 5 days before breakouts averaged over number of breakouts

Du 10 - lowest volume averaged 10 days before breakouts averaged over number of breakouts

Du 20 - lowest volume averaged 20 days before breakouts averaged over number of breakouts (Closest to Chart Script)

Can you explain one of these for me. Does DU 5 mean that you simply take the volume for the 5 days before the first day of the 6 or 8 day cycle and come up w/ an average volume for these 5 days - and then you average this average with the other breakouts? Your writing is usually extremely clear so I'm guessing that I don't quite have it.
More...

I apologize for any confusion resulting from my previous explanations. No, you don't average twice (as my previous posts may have suggested). Rather than provide additional confusion, I have added the following two stocks from Thursday, March 24, 2005 and their corresponding DU5 calculations:

FORD 389720
CUTR 38100

The above DU5 Volume calculation totals are for DU5, and not 50% pro-rata DU5 Volume. I hope that makes more sense, and again, my apologies for any confusion.

Quote from mlsignups:

Thanks. I hope w/ some input I can have some AmiBroker code up shortly.
More...

You're Welcome, and I look forward to seeing the results of your efforts. As always, I appreciate your contributions to the discussion.

- Spydertrader
 
Spydertrader -

Thanks for the reply and the DU volume #'s. I think the volume levels will be useful to confirm that I am getting the same numbers.

I probably wasn't clear at the end of my last post but I'd like to add the DU calcs to the AmiBroker code and was wondering, using the DU5 as an example (or any other) if you could quantify the formula and I'll adapt it for the others. Rereading this again: "Du 5 - lowest volume averaged 5 days before breakouts averaged over number of breakouts " does this mean:

Take the lowest one day volume level during the 5 days before a given breakout (so if the breakout was 12/15/2004 you'd look for five days prior to 12/15/2004) then average this with the lowest volume during the 5 days prior to the other breakouts?

Thanks - sometimes I can be a bit slow...
 
Quote from mlsignups:

Take the lowest one day volume level during the 5 days before a given breakout (so if the breakout was 12/15/2004 you'd look for five days prior to 12/15/2004) then average this with the lowest volume during the 5 days prior to the other breakouts?
More...

You have the correct interpretation.

- Spydertrader
 
2005-03-28, Monday - Lists

I used RS Setting of 90 and EPS Setting of 80 for the following lists

Stocktables.com
Sevens - Ones - Zeros
CHTT - AAPL - ADM
ANTP - MUSA - MT
NXTP - AKS - VMSI
AFFX - JOYG - ELOS
CENX - MACR - KEYW
ISSC - MDRX - CMC
TKC - MHR - XTO
FTO - TOPT - MTEX
ELOS - XXIA - VPI
VMSI - WWCA - LCAV

Wealth-Lab Chartscript/Manual
Hotlist

ANTP
XXIA
ELOS
TOPT

Wealth-Lab Data/Yahoo Data
Watch List

CUTR - DU Cycle
FRD - DU Cycle - DU5 - DU10
XXIA - DU Cycle - DU5 - DU10
SYNA - DU Cycle
MFLX - DU Cycle - DU5
BCSI - DU Cycle - DU5 - DU10
MIPS - DU Cycle
LCBM - DU Cycle
TOPT - DU Cycle - DU5 - DU10
SINA - DU Cycle - DU5 - DU10 -DU20
SNDA - DU Cycle - DU5 - DU10 -DU20
MCRI - DU Cycle - DU5
USG - DU Cycle
SPTN - DU Cycle
ULBI - DU Cycle - DU5 - DU10 -DU20

Wealth-Lab Developer Data & Equations/G33M4K Equations
SRVZ Wealth Lab Equations - Dry Up (with G33M4K Score)

FRD - 4

Eyeball
Gallas2 "Keep an Eye on These" Stocks

FFIV (Attached)

Yahoo Data/G33M4K Equations
Dry Up Stocks with G33M4K Master List Score of Zero

XXIA
SINA
ULBI

Wealth-Lab DU Volume Range - Hershey V2.0.1 / QCharts Data
Dry Up Stocks and G33M4K Master List Score

BCSI - 5
MCRI - 4
SINA - 0
SNDA - 4
SPTN - 1
TOPT - 5
XXIA - 0

Stocktables Sort/Qcharts/G33M4K Equations/
Test Culling Method with Score Hotlist

DCAI 0
PARL 0
XXIA 0
FORD 1
MFLX 1
MIPS 1
SGTL 2
MCRI 4
GDP 5
PMTI 5
TOPT 5
TRGL 5
ELOS 7

ANTP failed to make the Final Universe List due to insufficient float.

<img src=http://www.elitetrader.com/vb/attachment.php?s=&postid=714882>
 

Attachments

<p align=center><embed src="http://www.billis.com/assets/audio/buffet06.mp3" safehtml autostart="true" loop="3"></p>

I have decided to take a last minute trip south to relax and unwind - a Spring Break Trip! In a few hours, I depart for the Caribbean. I plan to spend the next ten days relaxing on the sun drenched shores of The Dominican Republic enjoying the sun, surf and sand. I anticipate the consumption of numerous margaritas during this timeframe, and expect the cycle of margaritas, piña coladas and tequila to repeat itself a minimum of 5 times over a period of six to eight days.

Before I headed off, I wanted to upload a round of margaritas for you to enjoy while listening to an appropriate tune. Hopefully, everything worked out correctly. I plan to resume posting on April 6, 2005. Until then, enjoy the margaritas and Jimmy Buffet.

- Spydertrader

<p align=center><img src=http://www.elitetrader.com/vb/attachment.php?s=&postid=715106></p>
 

Attachments

Status
Not open for further replies.
Back
Top