Spydertrader's Jack Hershey Equities Journal

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2005-04-20, Wednesday - Update

Our system triggered a signal this morning almost immediately after the open when actual volume for MIPS exceeded the 25% pro-rata level for calculated Dry Up Volume. We do not have price improvement ($8.30, down $1.15 at time of signal generation). MACD (-.1783) and The Stochastic Indicator (8.2878) fell outside desired parameters for entering into a long position. However, if one wished to consider shorting MIPS, all parameters fall within desired levels. As a result, I entered into a short position with MIPS.

04/20/05 09:33:03 8.23 8.23 8.41 3000

Target Price: $7.41
Trailing Stop: $8.64

We needed to remain vigilant with our monitoring efforts due to the 4.9% gap down MIPS experienced at the open. By gapping by 4.9%, MIPS finds itself extremely close to our exclusionary gap rule.

Volume continued to rise with MIPS in the first 15 minutes of trading exceeding all levels of Dry Up Volume calculation before 9:45 AM. Due to price continuing to fall to a morning low of $7.49, we moved our trailing stop in parallel with price (.74) to the $7.90 price point. As a result of price improvement occurring just before 10:00 AM, price triggered our trailing stop.

04/20/05 09:53:59 7.91 7.90 7.91 3000

The above trade lasted 20 minutes and yielded a gross profit of .32 per share (or 3.8%). This translates to $960.00 USD on 3000 shares.

- Spydertrader
 
2005-04-20, Wednesday - Update

Our system triggered a second signal this morning at 10:15 AM when actual volume for SYNA exceeded the 50% pro-rata level of calculated Dry Up Volume. We did see price improvement ($20.66, up .32 at time of signal generation) and MACD (+.0324) returned a positive level. However, The Stochastic Indicator (39.9863) fell outside our desired parameters. As a result, I took no action with respect to trading SYNA.

- Spydertrader
 
I have updated the k9 calculator in two ways. It will now include the WL score in the second column position. This is hand entered directly from the latest script. Second, though they are colored grey incorrectly (should be black, will be fixed in a few days) all 65, FRV and Peak columns now will continue to update past the DU calculation period. This way you can continue to use the calculator for 65, FRV and PEAK calculations. If you see any other bugs please let me know.

I hope this helps!

The new URL is:
http://www.mbtrading.com/k9/k99.asp

Ross
 
Here's a observation. Does the JH ranking system work well in reverse? It seems to me that lately as the market goes into high bearish mode, the PV relation is backwards - DU occurs near the high of the up cycle and FRV occurs at the start of the down cycle.

I don't really recall much commentary from Jack on this activity. Its very apparent lately. Think of it as while in bull markets a rise volume is positively correlated with an up move in price, while in bear markets the relationship has a negative correlation.

It would seem that a short rather than long version the JH system would need to find DU stocks near the high of the channel or ready for a left to right traverse, with DU volume and a sort of anti-correlated PV relationship.

Look at FORD today as an example. MIPS's last 2-3 day rally is another great example. DCAI also had similar characteristics when it was near its 52w high. I suppose this is part of the origin of the CAN SLIM sell recommendation of selling at new highs made on low volume.

Just some observations lately.
 
Quote from acesheet:

It would seem that a short rather than long version the JH system would need to find DU stocks near the high of the channel or ready for a left to right traverse, with DU volume and a sort of anti-correlated PV relationship.
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Nice Observations.

Jack spoke briefly about this very topic. Ideally, a combination of price position within a channel, volume, and score would indicate a bias for either long or short. Unfortunately, reality doesn't always work this way. Often, a stock breaks through the upper part of a channel rather than reversing as anticipated. Occasionally, a stock breaks through the lower channel even with a 'score' and a previous day volume indicating Dry Up. Frequently, The Hershey Stocks move independent of the overall market. Occasionally, they do not. Today, MIPS headed south while the overall market headed higher (only to reverse direction a few hours later). While the rest of the market retreated, MIPS improved in price (triggering my stop earlier than I would have liked). A few months ago (while the market was still rising) HANS exhibited 'short' behavior - rising significantly on low volume, but falling on high volume. At the time, I described HANS as an "Anti-Hershey" Stock. As a result, I let the individual price and volume action on an individual equity determine my bias (long or short). However, I think you correctly observe the increased opportunity to profit from shorting Hershey Equities during a bear market. Keep in mind the same opportunities exist to short during a bull market. They just don't occur as frequently.

- Spydertrader
 
Quote from Trend Fader:

Spyder whats your P&L since the start of the journal?
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Attached, please find a copy of all trades made since the Journal began. Over seven months, we made 28 trades using this system. Beginning with a $50,000 account, our current gross profits stand at $19,704 USD.

- Spydertrader
 

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I just had to follow the trading plan and exit when price crossed my stop didn't I. Ahh well, tomorrow is another day. Although today's MIPS trade could have yielded significantly greater profits, the stops protect us from mounting losses more often than they prevent us from obtaining increased profits.

- Spydertrader

<img src=http://www.elitetrader.com/vb/attachment.php?s=&postid=732586>
 

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Spyder, I followed your journal now for a few month. Excellent work.

But I have one question today - why did´nt MW make it into the Ones from stocktables. Did I overlook something simple?

Best regards,

Helmut
 
Quote from hpeganz:

But I have one question today - why did´nt MW make it into the Ones from stocktables. Did I overlook something simple?
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Nope. You didn't overlook anything. I did. MW should have made the One's List, but for whatever reason, I skipped right over it during my initial sort. I apologize for any confusion resulting from my error.

Thank-you for bringing this to my attention.

- Spydertrader
 
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