Spydertrader's Jack Hershey Equities Journal

[nwbprop]

Was just wondering if TASR made it as a buy today.

 

[Spydertrader]

Our system generated two signals today when actual volume exceeded calculated Dry Up Volume for PMTI and ECSI. I have attached charts for both stocks in the .zip file located at the bottom of this post.

PMTI
Price: $22.50
MACD: -.1312
Stoch: 20.0035


ECSI
Price: $11.60
MACD: -.0007
Stoch: 80.0256

Although actual volume levels for both stocks exceeded calculated Dry Up Volume, we did not have price improvement on either stock. In addition, a negative MACD and / or a low Stochastic Indicator prohibits us from taking a long position. Therefore, we take no trades today.

According to the (attached) chart for ECSI, price has not moved much - even with increased volume. We don't see the 'classic pullback' pattern observed with so many Hershey Stocks. By EOD, price remains off by .05, even though volume levels are nearly double the daily average. Also, use of the 'scoring tab' in the latest release of Master List v.18 .xls, yields a score of two. We would like to see the score of a stock transition from zero to seven. As a result, we take no action on ECSI.

However, for those interested in 'shorting' Hershey Stocks, PMTI provided an outstanding opportunity. Increased Volume on declining price, combined with negative MACD and very low Stochastic meet our 'shorting' criteria previously discussed in this thread - although outside the scope of this Journal. An Analysis of the PMTI chart (attached) and corresponding trendlines associated with PMTI indicated price breaking through the trendline at $23.10. Since actual volume exceed calculated Dry Up Volume at $22.50, and MACD crossover occurred (alternative exit strategy) at the $22.10 price point, one could have made a nice profit today 'shorting' Hershey Equities.

The focus of this Journal remains on trading the Jack Hershey Equities Methods from the long side. As a result, I provided the analysis of the above 'short' trade for educational purposes only. While I have shorted Hershey stocks in the past, 'shorting' Hershey Equities remains outside the scope of this journal. As a result, I did NOT trade PMTI.

I hope you find the above information useful.

- Spydertrader

 

[Spydertrader]

Quote from nwbprop:

Was just wondering if TASR made it as a buy today.

Using the requirement of a stock being in Dry Up Volume on the previous trading day, then exceeding Dry Up Volume by 11:00 AM and having price improvement, TASR (attached Chart) did not signal a buy today. Using other methods may have yielded different results. While volume appeared to decline over several days before rising, is this enough volume to be considered FRV? Compared to other volume levels (in previous cycles) occurring after a low in trading volume, today's volume reaches only 50% of the average volume.

While significant price improvement ultimately occurred with TASR, the stock did not reach FRV levels by end of day. I would be interested in your take on TASR using your variant of Jack's methods.

- Spydertrader

 

[nwbprop]

Quote from Spydertrader:

Using the requirement of a stock being in Dry Up Volume on the previous trading day, then exceeding Dry Up Volume by 11:00 AM and having price improvement, TASR (attached Chart) did not signal a buy today. Using other methods may have yielded different results. While volume appeared to decline over several days before rising, is this enough volume to be considered FRV? Compared to other volume levels (in previous cycles) occurring after a low in trading volume, today's volume reaches only 50% of the average volume.

While significant price improvement ultimately occurred with TASR, the stock did not reach FRV levels by end of day. I would be interested in your take on TASR using your variant of Jack's methods.

- Spydertrader

I have seen stocks in your DU list and HOTLIST that BO and start their up half cycle without you being in them. Just wondering what steps you are taking to figure out why you arent in them when they make 10%.

 

[Spydertrader]

Quote from nwbprop:

I have seen stocks in your DU list and HOTLIST that BO and start their up half cycle without you being in them. Just wondering what steps you are taking to figure out why you aren't in them when they make 10%.

Frustrating as it has been to watch stocks like TASR (and many others over the past year) increase in price without signaling a 'buy,' my current set of rules requires I wait until Dry Up Volume has been exceeded prior to 11:00 AM (a pro-rata version of FRV by EOD). If this criteria isn't met (along with several other criteria), then I don't take the trade. Following the rules has caused me to miss out on several opportunities (true), but the same rules have prevented numerous mistakes as well. I have concluded that a superior method of Dry Up calculation (one that more accurately reflects the Dry Up Levels of stocks such as TASR) needs to be implemented to improve 'catching' these movers. I hope to test Jack's Three "Stages of Dry Up" formula (DU1, DU2, DU3) to determine if these three formula improve results.

Knowing why stocks like TASR didn't trigger a 'buy signal' is the easy part. Their volume simply didn't exceed Dry Up threshold (as calculated by 4 different methods). Testing a viable solution to the problem takes some time. I hope to have that solution before the end of this year, but until then, I keep testing various methods in an effort to improve results without increasing risk.

Any input you may have is always appreciated.

- Spydertrader

 

[Spydertrader]

Sevens Ones Zeros
AVD HTCH CFC
GIVN NAVR INSP
PETD HDWR UTHR
CTSH PENN LPX
YHOO LEND CREE
MTEX CRDN DPTR
TRMB TASR BR
FMT CYTC TKC
LPX FTI UPL
INSP JUPM DECK

Hot list:

TASR
DPTR
CRDN
NAVR
JUPM
PETD

Watch List:

TASR - DU Cycle
HRT - DU Cycle - DU5 - DU10
ESMC - DU Cycle - DU5 - DU10
NVEC - DU Cycle - DU5
IDSA - DU Cycle
UBET - DU Cycle - DU5
IDSY - DU Cycle - DU5 - DU10
CALM - DU Cycle - DU5 - DU10 - DU20
LWAY - DU Cycle - DU5 - DU10
ANIK - DU Cycle - DU5 - DU10 - DU20
SWIR - DU Cycle - DU5
TRMM - DU Cycle
ALDN - DU Cycle - DU5 - DU10
HANS - DU Cycle - DU5 - DU10 - DU20
GMAI - DU Cycle
CRDN - DU Cycle
LIFC - DU Cycle - DU5
NAVR - DU Cycle - DU5
ASKJ - DU Cycle - DU5 - DU10 - DU20
HLEX - DU Cycle
LSCP - DU Cycle

(HRT, NVEC, IDSA & LWAY have float outside normal parameters)

 

[nwbprop]

Quote from Spydertrader:

Frustrating as it has been to watch stocks like TASR (and many others over the past year) increase in price without signaling a 'buy,' my current set of rules requires I wait until Dry Up Volume has been exceeded prior to 11:00 AM (a pro-rata version of FRV by EOD). If this criteria isn't met (along with several other criteria), then I don't take the trade. Following the rules has caused me to miss out on several opportunities (true), but the same rules have prevented numerous mistakes as well. I have concluded that a superior method of Dry Up calculation (one that more accurately reflects the Dry Up Levels of stocks such as TASR) needs to be implemented to improve 'catching' these movers. I hope to test Jack's Three "Stages of Dry Up" formula (DU1, DU2, DU3) to determine if these three formula improve results.

Knowing why stocks like TASR didn't trigger a 'buy signal' is the easy part. Their volume simply didn't exceed Dry Up threshold (as calculated by 4 different methods). Testing a viable solution to the problem takes some time. I hope to have that solution before the end of this year, but until then, I keep testing various methods in an effort to improve results without increasing risk.

Any input you may have is always appreciated.

- Spydertrader

How about looking into buying a stock near the end of the day if it hits FRV. Just something that would let you catch stocks that you miss out on at 11:30.

 

[Spydertrader]

Quote from nwbprop:

How about looking into buying a stock near the end of the day if it hits FRV. Just something that would let you catch stocks that you miss out on at 11:30.

Excellent advice. In fact, I have added this rule after missing out on ENWV last Tuesday when I failed to notice ENWV actually hit FRV by EOD (after NOT reaching DU by 11:00 AM). While adding 'near' EOD volume monitoring to my trading schedule improves the odds of 'catching' multiple opportunities, additional pieces to the puzzle remain undiscovered. By example, TASR failed to reach FRV (by EOD) yesterday as well as DU. In fact, Total Volume for TASR on 2004-10-12 remained near 50% of the daily average.

Also, adding trendlines to daily charts in search of 'point three formations' has helped to avoid a few mistakes. Great advice you provided here as well.

Since DU Volume appears to be the lynch pin of The Jack Hershey Equities Method, and since I see stocks on both / either Hot List and Watch List break out without exceeding the levels of Dry Up I have calculated, I can only conclude I required improved methods of DU calculation (in addition to the two pieces of advice mentioned above) to aid in 'catching' these movers. At least it appears to be a logical place to start.

Again, thanks for the helpful advice.

- Spydertrader

 

[Spydertrader]

ASKJ triggered a 'buy' signal this morning as Actual volume exceeded calculated DU Volume. Significant price improvement occurred with positive MACD and a nice looking Stochastic. Unfortunately, ASKJ also gapped open by 8.9%. Based on my experience over the last year, stocks that gap above 5% have a reduced probability of reaching the target price. As a result, we take no action and monitor the stock (and volume) throughout the day - looking to find a better entry price.

Date Time last bid ask volume
10/13/04 10:04:56 34.87 34.78 34.81 2082129

- Spydertrader

 

[Spydertrader]

UBET also triggered a 'buy signal this morning when actual volume exceeded calculated Dry Up Volume.

Price: $3.00
MACD: .0124
Stoch: 83.6667

10/13/04 10:37:37 3.00 3.00 3.00 2800

We have correct Volume, Price Improvement, MACD and Stochastics all in agreement. As a result, we take the trade. One note of caution: if FRV does not materialize, I will exit based on a MACD crossover prior to end of day.

- Spydertrader