Spydertrader's Jack Hershey Equities Journal

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Quote from hpeganz:

Even with my own data (CSI-data)and wealthlab and the web based chartscript on the wealthlab homepage I don´t get JMDT in dry up. I think this difference is worth of discussing, because I may doubt my own calculations.
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My data source indicates JMDT experienced a volume yesterday of 244,305 shares. The Wealth-Lab.com Web Site Version shows JMDT with a volume of 249,405 shares. The difference in volume results from differences in the way the two data sources capture data for the day. Simple as that. Nothing of major concern here. Today, the difference was just enough to place JMDT "In Dry Up" using my data source (and maybe a few others), but not using the Wealth-Lab.com Web Site Version Data Source. Again, as long as you remain consistent in which data source you use, the differences equal out over time.

- Spydertrader
 
Quote from oddiduro:

Can you explain briefly how you developed these bands?
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Jack Hershey uses an 'eyeball method' for determining Dry Up Volume. He simply looks at a daily chart and calculates where he thinks Dry Up Volume levels should be based on several cycles of 20% more gains occurring over a period of six to eight days. Since Jack does these calculations in his head, I have held the belief for quite some time that I may have attempted to quantify that which remained unquantifiable. In other words, searching for an absolute value for Dry Up Volume, may not have fit the 'spirit' of Jack Hershey's Methods.

Using probability and statistics as my guide, I decided to try using a 'multiplier' to capture a number of standard deviations from the mean. In our case, Average Dry Up being the mean, we look to capture all data points residing within three standard deviations from that mean. These calculations provide us with a Range of Dry Up Values - From Low Band to High band. Statistics tells us that we can expect 99.7% of all data points to fall within three standard deviations of that mean.

By using the Low Band Dry Up Volume as our entry trigger, we experience a greater number of trade signals and as a result, capture the price moves earlier in their run.

I hope you find the above information helpful.

- Spydertrader
 
Quote from KevinK:

So when using FRV based on the website chartscripts, do we use the one provided or adjust it to the low band?
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The ChartScripts automatically calculate FRV and print it to the commentary window (located below the chart). No adjustments needed.

- Spydertrader
 
2005-07-08, Friday - Update

This morning, I monitored one list of stocks (5 total equities): Those equities from our daily Hot List and from our Final Universe List finding themselves "In Dry Up."

Dry Up Stocks

DCAI FORD JMDT JUPM TASR

Our system generated four possible trade signals from the list of five Dry Up Stocks when actual volume exceeded calculated "Low Band" Dry Up Volume prior to 11:30 AM.

Dry Up Stocks Triggering Signal

JMDT DCAI FORD TASR

Dry Up Stocks NOT Triggering Signal

JUPM

JMDT DID show price improvement ($28.35) at time of signal generation (9:55 AM). In addition, MACD Histogram showed a positive return (+.1653). Also, The Stochastic Indicator fell above desired levels (100.0000). However, due to the large gap up in price (my rules prevent me from chasing large gap opening stocks), I took no action with respect to trading JMDT. For those of you that did take the trade, congrats to you.

DCAI DID show price improvement ($22.54) at time of signal generation (10:08 AM). In addition, MACD Histogram showed a positive return (+.0816). However, The Stochastic Indicator fell below desired levels (78.0101). As a result, I took no action with respect to trading DCAI.

TASR DID show price improvement ($10.27) at time of signal generation (10:38 AM). In addition, MACD Histogram showed a positive return (+.0515). Also, The Stochastic Indicator fell above desired levels (88.6667). However, the local cable company performed maintenance on the lines during this time period completing their work several minutes after the time of signal generation. As a result, I was unable to receive the signal or enter into a trade. Therefore, I took no action with respect to trading TASR.

FORD did not show price improvement ($19.35) at time of signal generation (11:05 AM). In addition, MACD Histogram showed a negative return (-.0518). Also, The Stochastic Indicator fell below desired levels (47.3789). As a result, I took no action with respect to trading FORD.

I continue to hold all shares of MFLX.

- Spydertrader
 
2005-07-08, Friday - Update

Stocks Exceeding FRV levels by EOD

DCAI JMDT

Stocks NOT Exceeding FRV levels by EOD

FORD JUPM TASR

MFLX has not yet reached Peak Volume Levels, nor has it hit out 10% Target. As a result, I continue to hold all shares of MFLX until at least Monday Morning. Current price of MFLX remains up $1.79 per share since entry.

- Spydertrader
 
Quote from Spydertrader:

Jack Hershey uses an 'eyeball method' for determining Dry Up Volume. He simply looks at a daily chart and calculates where he thinks Dry Up Volume levels should be based on several cycles of 20% more gains occurring over a period of six to eight days. Since Jack does these calculations in his head, I have held the belief for quite some time that I may have attempted to quantify that which remained unquantifiable. In other words, searching for an absolute value for Dry Up Volume, may not have fit the 'spirit' of Jack Hershey's Methods.

Using probability and statistics as my guide, I decided to try using a 'multiplier' to capture a number of standard deviations from the mean. In our case, Average Dry Up being the mean, we look to capture all data points residing within three standard deviations from that mean. These calculations provide us with a Range of Dry Up Values - From Low Band to High band. Statistics tells us that we can expect 99.7% of all data points to fall within three standard deviations of that mean.

By using the Low Band Dry Up Volume as our entry trigger, we experience a greater number of trade signals and as a result, capture the price moves earlier in their run.

I hope you find the above information helpful.

- Spydertrader
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Excellent info Spyder......

For the sake of redundancy, please define "Average Dry Up" in the form of an equation, if you will.

Also, with regards to the term "price improvement" to you mean price improvement from the open, or price improvement from yesterday's close at the time of signal generation?

Best Regards
Oddi
 
Quote from oddiduro:

For the sake of redundancy, please define "Average Dry Up" in the form of an equation, if you will.
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All Hershey stocks cycle a minimum five times in a six month period.

Where Dry Up Volume is the lowest Volume during any 20% cycle in price occurring over a period of six to eight days.

Du1+Du2+Du3+Du4+Du5 / 5 = Average Dry Up

Quote from oddiduro:

Also, with regards to the term "price improvement" to you mean price improvement from the open, or price improvement from yesterday's close at the time of signal generation?
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The system requires price improvement from the previous day close at time of signal generation.

- Spydertrader
 
Was just reviewing the journal and came across this quote...
I Can't AGREE MORE...
It's weird buying a stock that is sometimes already up 10%.

I would also like to thank Spydertrader for all the work he does in this journal in helping educate us on this system and answering all our silly questions. Thanks so much spyder.
Quote from bundlemaker:

thanks Reno, for guys like me who didn't pay attention on the first go 'round, this will help a lot.

As a side note, my research on DU using the entire voume series hasn't bore fruit yet,but lots of ideas to try out and will keep posted.

Not related to my previous idea, but perhaps useful, I'm going to look into filtering whether a day is in DU not just based on volume but also price volatility (ie. inside day, 5 day avg range, etc).

Thanks for your ongoing journal spyder, I follow the picks everyday to build confidence, I admit the entries make me VERY nervous, buying on such strength.

Hopefully I"ll get past that, LOL.
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