On Time Alert

Range Contraction

This strategy was derived from Linda Raschke’s book: Street Smart Investing.

The setup filter finds stocks where there has been a range contraction over the last 5 days. Yesterday's range must be less than the ranges 2, 3 and 4 day's ago. In addition, yesterday must have been an inside day, i.e. its low was above the previous day's low and its high was less than the previous day's high. This describes a classic short-term pennant formation.

The chart of ADLR from 10/01/02 is a classic Range Contraction Breakout. Yesterday's range was only .21. The stock went through a 20-day consolidation into a tight range contraction. Yesterday's high was 14.23 and the close was 14.02. It opened today at 14.11 and then briefly pulled back to 14.00. At the price of 14.24 it first appeared in the Range Contraction Up Ticker when it was up .22. It closed at 15 up .98.

Volatility Contraction

This strategy was derived from Linda Raschke’s book: Street Smart Investing.

This is a special case of Range Contraction. It has similar, but less stringent, short-term characteristics in terms of a contraction over the last 5 days. With Range Contraction, yesterday's range must be less than the ranges 2, 3 and 4 day's ago and yesterday must have been an inside day. Volatility Contraction requires that only one of the above conditions need be present.

There is an additional longer term component to this strategy that picks up situations where there's a more significant amount of consolidation. Major moves can result from such situations.

The near term volatility must be less than the longer-term volatility. For example, the average volatility over the last 10 days is less than 50 % of the average over the previous 10-day period. This can be seen in the following chart where the Bollinger Bands get narrower.

These trades occur much more rarely, but can provide greater returns.

Judd Breakout

This is a special case of Range Contraction. It has similar, but less stringent, short-term characteristics in terms of a contraction over the last 5 days. With Range Contraction, yesterday's range must be less than the ranges 2, 3 and 4 day's ago and yesterday must have been an inside day. Volatility Contraction requires that only one of the above conditions need be present.

There is an additional longer term component to this strategy that picks up situations where there's a more significant amount of consolidation. Major moves can result from such situations.

The near term volatility must be less than the longer-term volatility. For example, the average volatility over the last 10 days is less than 50 % of the average over the previous 10-day period. This can be seen in the following chart where the Bollinger Bands get narrower.

These trades occur much more rarely, but can provide greater returns.

Trend Buy

Selects stocks in short term uptrends which have a modest pullback and then resume the uptrend. Uptrend is defined as: 10 day avg > 20 day avg. and slope of 10 day avg. trending up. Pullback is defined as one or more days with lower highs.

Alert occurs on the tick where the current days high exceeds yesterday’s high.

The ticker will continue displaying alerts as new daily highs are achieved.

If the stock starts running, multiple prints will appear in the ticker.

10-Day Average

This is similar to the Trend strategies except that the pullback or countermove must reach the 10 Day Average. These strategies benefit from the chart formation whereby the 10 Day Average provides persistent support for an up trending stock. When the price comes down to the 10 Day Average., it bounces up. Similarly, in a down trending stock, a countermove up to the 10 Day Average encounters resistance, and reverses down.

10 Day Average Buy

An up trend is defined by the 10 Day Average > 20 Day Avg. and the slope of the 10 Day is trending up. The pullback is defined as one or more days with lower highs and yesterday's low must have been less than or equal to the 10 Day Avg. The stock enters the ticker as it up ticks from the open or the first low.

10 Day Average Sell

A downtrend is defined by the 10 Day Average < 20 Day Avg. and the slope of the 10 Day is trending down. The counter move is defined as one or more days with higher lows and yesterday's high must have been greater than or equal to the 10 Day Avg. The stock enters the ticker as it downticks from the open or the first high. For example, the following chart of ZION illustrates both the UP and Down strategy.

Holy Grail

Linda Rashke defined this technical pattern in her book Street Smart Investing. It is an intermediate term trend following strategy. As in most trend following strategies, it looks for a pullback and then a resumption of the primary trend. What is unusual here is that it uses Wells Wilder's ADX indicator to define the trend. The ADX is generally misunderstood. A high reading (in this case over 30) indicates a strong trend ...either an up trend or a downtrend. A simple momentum indicator such as RSI, MACD or Stochastics, can move from overbought to oversold relatively quickly in comparison to ADX. When a stock has an ADX of 30, it is usually well above its 20 Day Average. In this strategy it must pull back to and cross the 20 Day, and then reverse and resume the primary trend.

Holy Grail Down

Wells Wilder's ADX is used to identify strongly trending stocks. The ADX must be over 30. ADX is not directional with respect to trends, in that it can describe either an uptrend or a downtrend. Therefore an additional parameter is included namely, the 20-day average < 50-day avg. These parameters describe an intermediate term downtrend. A countertrend move must occur whereby the stock rallies up through that 20-day avg. Specifically, yesterday's HIGH must exceed the 20-day avg. When today's LOW drops below the 20-DAY AVG. and below yesterday's LOW an alert is triggered in the HOLY GRAIL DOWN ticker. At this point the stock is resuming its primary downtrend as measured by the ADX. Every new daily LOW is subsequently printed in the ticker.

In the following example, the 20-day avg. of KRG is 23.55, which is where it opened on the current day. Yesterday's low was 23.50. Therefore when the stock traded at 23.49, it entered the ticker. It continued to appear in the ticker throughout the day, i.e. 23.48, 23.47 etc., all the way down to its close at 22.97. This represents a day trade with a $.50 profit.

Based on the particulars of the chart pattern, position trades of several days duration are often generated. Note that this occurred 7 days ago at a price of 23.71. The stock declined to 22.70 (an approx. 50 % retrenchment) before rebounding.

Bandwide

This strategy was derived from Linda Raschke’s book: Street Smart Investing.

We are using 2 standard deviation Bollinger Bands centered on the 20 Day Average (yellow) The bandwidth (upper-lower) must be at least 20% of the stock price. This ensures that the bands are relatively wide. An excursion into the upper band indicates a very overbought condition. Conversely, a move below the lower band indicates an oversold condition.

Bandwide

In this ticker yesterday's high must be above the upper band. A breakdown from this overbought level usually results in a very good shorting opportunity. The ticker flags these situations when a two hour low is made on the current day. EIX closed yesterday at 12.95. It opened today at 12.87 and then rallied to 13.21 +.26 at 10:10am. At this point its momentum was exhausted and started to drop. At 11:41 it fell below 12.87 which at that time was a two hour low and the low of the day. The print at 12.86 appeared in the Bandwide Sell ticker. Every subsequent lower low was repeated .in the ticker down to 12.00. When it leveled off I printed this screen at 15:14. Depending on how alert you were, there was a .6-day trade here. Beyond that you can see that this strategy can be used for swing trades of several days duration. In this case it dropped down below the lower band reaching 10.85 on 9/04.

Engulf Up / Down

This is a candlestick pattern that exhibits a short-term reversal formation. It is similar to an "outside day" on a bar chart, where there is a higher high and a lower low. However, with candlesticks we focus on the "body" of the daily bar, which is defined as the difference between the open and the close. The high of the body is higher than the high of the previous body and the low is lower than the previous body. The high and low for each bar appear as "tails". Statistical analysis has shown that the Engulfing pattern strategy is more profitable and yields more trades than the outside day reversal.

Engulf Up

In the following example HB consolidated in a downward flag formation for 3 days. It found support and then rallied on the current day.

The Engulf Up pattern is defined as a small candle body at the end of a consolidation or a (in this case short term) downtrend followed immediately by an engulfing body in the current bar. The stock must be down for at least 2 days. On the current day it opens below the lower level of yesterday's small body, then moves up above the upper level of yesterday's body (56.99) The alert occurs in the ticker .01 above that level i.e. at 56.00 and repeats at every subsequent higher daily high print. In this case it reached 58.15.

Stochastic

The Stochastic momentum indicator measures the overbought / oversold condition of stocks. A value of 80 is considered to be overbought and 20 is oversold. The Stochastic has 2 lines.

STK is the fast Stochastic. On this chart it is a solid yellow line.

STD is the slow or smoothed Stochastic.

Stochastic Buy:STD must be below 20, STK < STD, and STK moving up. We are anticipating STK crossing above STD. By the time it crosses, part of the move is already over.

Stochastic Sell:STD must be above 80, STK > STD, and STK started to move down. Thus we are anticipating the STK crossing under the STD, which is a sell signal

In this example ACI had STK readings of 94.53, 91.04 and 91.61 on 8/21 to 8/23/02. The STD was 90.57, 90.98 and 91.45 thus the strategy generated an early sell signal, when the stock was trading at19.50. The first wave down took ACI to 17.00. It finally reached an oversold condition at 15.00, when the stochastics were 6 and 10 on 9/24/02.

Fill 10 20

When stocks get very oversold the 10-day avg < 20-day avg < 50-day avg. In addition the averages are sloped down. The 10 day avg is resistance. When the average is exceeded, there is usually no resistance until the 20-day average is reached. In this strategy, the 20-day avg must be at least 10% above the 10-day avg. The Fill 10 20 ticker alerts you at the first tick above the 10-day average.

In the following example from 9/25/02, SLAB was alerted at 18.62. It rallied to the 20-day average at 19.85.

Fill 20 50

The following chart of AOL is a good example of Fill 20 to 50. For several months AOL could not get above its 20-Day Average. In addition the 10 Day < 20 Day < 50 Day and all of the averages were sloping down. On 8/15/02 it crossed the 20-Day Average at 11.74. In 3 days it reached the 50-Day Average at 12.92.

50 Up / Down

The 50-day average is a very important pivot point on the daily chart. It can represent either support or resistance. When a stock builds a base below the 50, a move through that level can be explosive. In this example, AEM consolidated between the 50-day average (blue) and the 200-day average (purple). During the consolidation the slope of the 50 leveled off. On 8/27/02 it broke out through the 50 day average which was 13,67. The Fifty Up Ticker first printed an alert at 13.68 the first tick above the 50-day average. It closed that day at 14.22. Two days later it closed at 15.61, which represented a 15% gain.

Big Bid / Ask

Big Bid:

This Ticker filters quotes where the Bid size is 9000 or higher and the Assize is less than 1000. The bid must have down ticked at least 2 ticks (Bidrun —2 or lower), Thus, bids ave been dropping until the current quote where size has come to the bid.

Big Ask:

The Ask size is 9000 or higher and the Bid size is less than 1000. The Ask must have up ticked at least 2 ticks (Ask run 2 or higher). Thus, asks have been rising until the current quote where size has come in on the offer. This is a good method to find bullet opportunities.

The format of the Tickers in View Data mode is: Symbol, Last, Change, Bidsize, Asksize, Bid, Ask, Bidrun Askrun

Short Term Momentum

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Volume Spikes

Volume Up / Down

The Volume Up Rank Reports shows stocks which are up for the day on high volume. The report is sorted on Volume Percent or VolPct, A value above 1.00 indicates greater than average volume, normalized for the time of day. 2.0 indicates 2 times average daily volume.

Average daily volume over the last 10 days is used in this calculation. The calculation is normalized as to the time of day. For example, if a stock has an average daily volume of 200,000 shares and the time is 1:00 pm, and it has traded 100,000 shares, then the VolPct = 1.00.

If it had traded 200,000 shares at 1:00 pm the VolPct = 2.00, i.e. if it continued at that rate it would trade 400,000 shares by 4:00 pm. The average daily volume for stocks in this report must be at least 100,000 shares.

The Volume Down does the same volume calculation for stocks which are down for the day. Another set of reports titled Volume Up Down 1 evaluates stocks which have an average daily volume under 100,000 shares.