September 7, 2022 – 3pm to 7pm London time, four hour in-depth webinar
covering these in-depth topics, crucial to your successful trading.
Early bird pricing now in effect, see below to book your discounted price and save over 20%
****** Includes PDF handouts and access to the recordings of the event ******
Session 1 – Power tools and features in your WinWayCharts and how to use them
Color Studies, Overlays, Custom Indicators, Seasonality, and Matchmaker. These are important and powerful tools in your WinWayCharts. In this session, we’ll show how to set a Color Study and why, what Overlays are useful for, and more. Learn how these tools will save you time and how they contribute to your trading decisions. Darren’s 3 favourite Bullish/Bearish strategies will be used as the basis for the color study.
Session 2 – Darren’s Indicators and how to apply them
Some indicators are more reliable than others. In this session, we’ll look at some of the nuances of MACD WinWay, RSI WinWay and the CCI indicators and how they add confidence to our trading decisions. We’ll explore these 3 indicators in-depth with examples of them in action in the stock market.
Session 3 – Exchange traded funds rotation strategy so you never have to go short
Using the reports in WinWayCharts we’ll look at a tried and tested ETF rotation strategy that is simple and yet effective at getting you in the right market segment at the right time. This strategy is simple to execute and has consistently beat the market over multiple years. While this strategy doesn’t replace your regular trading, it’s a good place to consider for a segment of trading.
Session 4 – Live Trading using Darren’s Favorite Candlestick Strategy and ETF Strategy
Starting from Market Timing, then moving to the Darren’s 3 Favourite Candlestick Strategy and the ETF Rotation Report, we’ll look for candidate stocks. Using the WinWayCharts indicators we’ll look to confirm the best of the best stock and ETF candidates to place trades with stops using a live trading account.
Your Presenters: Ray Foreman UK director WinWayCharts and, Steve Hill, CEO AIQ Systems, and founder WinWayCharts
Master Trading with WinWayCharts Webinar
September 7, 2022
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includes all handouts in PDF and access to recordings
The importable EDS file based on Markos Katsanos’ article in April 2022 issue of Stocks and Commodities magazine, “Stock Market Seasonality,” can be obtained on request via email to info@TradersEdgeSystems.com. The code is also available below.
Synopsis:
Should you sell in May, or later in the summer, or never? Is October the best reentry month? Which are the best and worst months for the stock market? And are there statistically significant seasonal patterns in the equity markets? Can we improve on a seasonal system using other technical conditions?
Code for the author’s system is set up in the AIQ code file. Figure 9 shows a summary EDS backtest of the system using the SPY ETF from 1/1/2000 to 2/17/2022.
FIGURE 9. This shows the summary EDS backtest of the system using the SPY ETF from 1/1/2000 to 2/17/2022.
!Stock Market Seasonality
!Author: Markos Katsanos, TASC April 2022
!Coded by: Richard Denning, 2/10/2022
C is [close].
C1 is valresult(C,1).
H is [high].
L is [low].
V is [volume].
Avg is (H+L+C)/3.
VIXc is TickerUDF(“VIX”,C).
VIXc1 is valresult(VIXc,1).
VIXllv is lowresult(VIXc,25).
VIXllv1 is valresult(VIXllv,1).
VIXhhv is highresult(VIXc,25).
VIXhhv1 is valresult(VIXhhv,1).
VIXDN is (VIXc1 / VIXhhv1)100. VIXUP is (VIXc1 / VIXllv1)100.
TR is max(max(C1-L,H-C1),H-L).
ATR is expavg(TR,152-1). ATR1 is valresult(ATR,1). ATRllv is highresult(ATR,25). ATRllv1 is valresult(ATRllv,1). ATRhhv is highresult(ATR,25). ATRhhv1 is valresult(ATRhhv,1). ATRDN is (ATR1 / ATRhhv1)100.
ATRUP is (ATR1 / ATRllv1)*100.
!VFI
Period is 130.
Coef is 0.2.
VCoef is 2.5.
inter is ln( Avg ) – ln( valresult( Avg, 1) ).
Vinter is Sqrt(variance(inter, 30 )).
Cutoff is Coef * Vinter * C.
Vave is valresult( simpleavg( V, Period ), 1 ).
Vmax is Vave * Vcoef.
VC is Min( V, Vmax ).
MF is Avg – valresult( Avg, 1 ).
VCP is iff(MF > Cutoff, VC, iff(MF < -Cutoff, -VC, 0 )).
VFI1 is Sum( VCP, Period ) / Vave.
VFI is expavg( VFI1, 3 ).
SELLMONTH is 8.
VIXUPMAX is 60.
CRIT is -20. !VFI SELL
K is 1.5. !ATR/VIX RATIO
VOLCONDITION is (VIXUPCRIT.
BUY if (Month()>=10 OR Month()2*VIXUPMAX. !VOLATILITY EXIT
SELLMF if CRIT > VFI AND valrule(CRIT < VFI,1) AND simpleavg(VFI,10)<valresult(simpleavg(VFI,10),1).
Sell if SELLSEASONAL OR valrule(SELLVOLATILITY,1) OR valrule(SELLMF,1).
Advance-Decline data is calculated from daily issues reported on the New York Stock exchange. The Basic formula for calculating the Advance-Decline is the difference between the number of Advancing Issues and the number of Declining Issues per day, and adding it to or subtracting it from the previous day’s total.
In simple terms, the AdvanceDecline Line shows the direction in which the majority of stocks are headed. In a more important sense, it can show whether buying enthusiasm during a rally is spread across a broad number of stocks (a positive indication), or whether buying is narrowly focused on just a few industry groups or sectors (a generally negative sign).
An Advance-Decline Line is a contract/expanding/short-term market indicator. It is also referred to as an “order of magnitude” indicator because it provides a quick estimate of the market’s internal strength by showing how the overall market (or a specific sector) is trading in relation to a moving average.
One of the most popular ways of judging the market strength of the overall market is by using the advancedecline line (ADVs), also known as the “AD Line.” This metric is calculated by subtracting the number of decliners from the number of advancers in a market index. During a strong bull market (when a bull market begins), an AD line that is rising indicates growing market breadth (better market breadth) and indicates that money is continuing to move into the market. Conversely, falling AD lines indicate shrinking market breadth (worse market breadth) and indicate that money is leaving the broader market.
Because of its elegant simplicity, and the valuable insights it has provided at market turning points, the AD Line has become a highly prized indicator by both fundamentalists and technicians throughout the decades. But, in recent years, something seems to have gone astray.
The AD Line against the DJIA 9/1/2021 clearly shows the indicator making a new high, however the market drops precipitously shortly after
How could the time-tested Advance-Decline Line give off such obviously false signals? The answer is simple, but not easily seen. The change has occurred, not in the indicator, but in the data it measures. Over the past 3 decades, the New York Stock Exchange has allowed trading in a growing number of issues that are not, or do not trade like, domestic common stocks.
The truth is that most of the issues currently listed on the NYSE are not really stocks, at least not what investors generally define as stocks. Their inclusion has created turbulence in the sea of securities that has been amplified by the Advance-Decline Line. These stock-like issues include closed end funds (CEFs), American Depository Receipts (ADRs), and exchange-traded funds (ETFs).
In other words, the common stock components of the Advance-Decline Line offset one another, while the bond-related components were rising strongly, giving the Advance-Decline Line a positive bias. In other words, during those periods, the Advance-Decline Line was, in essence, measuring the strength of the bond market, not the stock market. It’s no wonder that the signals were misleading!
As we reach the end of March 2022, the volatility in the markets continues with large range days and varying volume levels.
When the market is in a trend, we might see 2 or 3 high Expert Ratings warning us of a potential change in direction. At the tail end of 2021 and the first 10 days of 2022, we had 3 down signals, the last of the 3 at 1-99 was on 1/10/22. The market moved down solidly to the 33280 level before rallying 2/3rds of the down move.
There was no up rating at the bottom as prices moved back up and one up rating early February that didn’t pan out. However, between 2/24 and 3/16 there was six signals, 5 of them up. That’s in only 14 trading days.
Between the 2/24 up signal and the 3/14 up signal there were 9 distinct bullish ER rules showing. There was also several that were duplicated bullish ER rules. Add to this 4 new distinct ER rules on the up signal 3/16, that adds up to the busiest ER cluster for a very long time.
Here are the first 9 distinct rules contributing the cluster of ratings
The Money Flow Indicator has reversed and is now advancing. In this sideways market, this is read as a bullish indication that the market could move up from this point because of the inflow of funds.
The 21 day stochastic has advanced and crossed the 20% line and the price phase indicator is also in- creasing. In this strongly downtrending market this is taken as a strong bullish signal suggesting an increase in prices.
The price phase indicator is negative but volume accumulation has started to advance. This is a non-conformation that, regardless of the type of market, is a bullish signal which usually results in an upward movement of the market.
The Money Flow Indicator has reversed and is now advancing. In this downtrending market, this is taken as a weak bullish signal that could indicate an upward movement in the market averages.
The advance/decline oscillator has turned positive with volume accumulation already positive. In this strong downward trend this is read as a strong non- confirmation of the current trend which could be followed by a reverse in price direction to the upside.
The new high/new low indicator has reversed to the upside. This is a reliable bullish signal that is often followed by an upward movement in prices. In this strong downtrending market a reverse in trend could start shortly.
Volume accumulation percentage is increasing and the 21 day stochastic has moved above the 20% line. In this downtrending market, this is taken as a strong bullish signal that could be followed by an upward price movement.
The new high/new low indicator has reversed to the upside. This is a reliable bullish signal that is often followed by an upward movement in prices. In this weak downtrending market an uptrend could start shortly.
Intraday low prices of the market have declined to a 21 day low. But the volume accumulation percentage is positive. In this market, this is taken as a weak bullish signal that could be followed by an upward price movement.
So when was the last time we saw this many ratings so close together?
It happens in clusters particularly in advance of a move against the current trend of the market. The ER system is inherently counter trend. This chart shows some cluster from 2009 – 2011.
One example was way back at the tail end of 2007, when another cluster of buy signals occurred in a similar fashion. Following a 100 down on 11/01/07 the market gave ground until 11/08/07, the first of 6 buy signals in 13 trading days through to 11/28/07
The market ERs are not perfect but they provide us with key insights into the way the internals are performing.
Where does the market go from here?
This chart above was back at the start of the 2007/8 bear market. So how do the chart patterns compare between 2022 and 2007/8? The chart below, on the left shows the 2007/8 market through early December 2007 following a strong move up after the cluster of up signals. The right charts shows current market with a strong up move following the cluster of up signals
There are some similarities between current price action and the topping pattern back in 2007, one being the measured way this pattern is emerging over several months. The chart below is the same time periods compared but with the ERs showing.
The bear market that followed in 2008 is in the Chart below.
The market moved down in a series of measured moves until we reached late September 2008 and the sharp downturn occurred. No guarantees we’re in the same market, but keep an eye out for those counter trend cluster ERs if we are, they may provide warning of rallies.
WinWay TradingExpert Pro is programmed with the knowledge and insight of respected technical analysts, experts who have developed technical analysis indicators and systems for the last 50 years. The up/down timing signals issued by TradingExpert Pro are based on this knowledge. Since TradingExpert Pro’s timing signals are generated on a scientific basis, free of bias or emotion, you get a disciplined, objective approach to stock market timing.
The timing signals produced by the WinWay expert system are in the form of Expert Ratings. Behind each Expert Rating is a set of rules that combine the sound principles of technical analysis with the experience of market professionals. Since no single technical indicator works all the time, using indicators in combination increases their reliability. For example, a rule is developed that combines the readings of two or more indicators.
This rule is then more reliable than the reading of a single indicator. Within TradingExpert Pro are two knowledge bases, one specifically designed to issue market timing signals and the other designed to issue stock timing signals. Each TradingExpert Pro knowledge base contains approximately 400 rules, but only a few “fire” on any given day.
In the language of expert systems, those rules that are found to be valid on a particular day are described as having “fired”. Rules can fire in opposite directions. When this happens, the bullish and bearish rules fight it out. It’s only when bullish rules dominate that the Expert Rating signal is bullish, or when bearish rules dominate that the Expert Rating signal is bearish.
Your WinWayCharts includes the AIQ Market Timing AI rating system. In this short video we’ll discuss the last 4 AI ratings on the Dow Jones Industrial average and examine the rules that fired to generate these signals.
AIQ TradingExpert Pro is programmed with the knowledge and insight of respected technical analysts, experts who have developed technical analysis indicators and systems for the last 50 years. The up/down timing signals issued by TradingExpert Pro are based on this knowledge. Since TradingExpert Pro’s timing signals are generated on a scientific basis, free of bias or emotion, you get a disciplined, objective approach to stock market timing.
The timing signals produced by the AIQ expert system are in the form of Expert Ratings. Behind each Expert Rating is a set of rules that combine the sound principles of technical analysis with the experience of market professionals. Since no single technical indicator works all the time, using indicators in combination increases their reliability. For example, a rule is developed that combines the readings of two or more indicators. This
rule is then more reliable than the reading of a single indicator. Within TradingExpert Pro are two knowledge bases, one specifically designed to issue market timing signals and the other designed to issue stock timing signals. Each TradingExpert Pro knowledge base contains approximately 400 rules, but only a few “fire” on any given day.
In the language of expert systems, those rules that are found to be valid on a particular day are described as having “fired”. Rules can fire in opposite directions. When this happens, the bullish and bearish rules fight it out. It’s only when bullish rules dominate that the Expert Rating signal is bullish, or when bearish rules dominate that the Expert Rating signal is bearish.
December 20, 2021 we published this seasonality article on the Santa Claus rally https://winwaycharts.com/wordpress/tis-the-season-to-be-cautious/ In a nutshell we looked at the last 5 trading days of the year and the first 2 trading days of the next year. We looked back over the last 7 years to see if the rally holds up.
The Dow clearly did show an average rally of over 1% during those 7 trading days.
So how did things go this Santa Claus rally?
Here’s the DIA the ETF that follows the Dow during the 7 day Santa Claus rally. It made a nice gain of 2.9%. 2 days later things turned down.
This time of year you might expect us to be thinking about the Santa Claus rally, but after the beating we’ve had the last few days, lets check and see how effective this really is.
What Is a Santa Claus Rally?
I lifted this description from Investopedia
A Santa Claus rally describes a sustained increase in the stock market that occurs in the last week of December through the first two trading days in January. There are numerous explanations for the causes of a Santa Claus rally including tax considerations, a general feeling of optimism and happiness on Wall Street, and the investing of holiday bonuses. Another theory is that some very large institutional investors, a number of which are more sophisticated and pessimistic, tend to go on vacation at this time, leaving the market to retail investors, who tend to be more bullish.
To test this in Expert Design Studio, I used the Seasonality3 ED built-in strategy. I set the Season Length days to 7 days to encompass the last 5 trading days of December and the first 2 days in the New Year.
By setting the date to 1/4/21, the rule looks back 7 trading days from January 4th, each of the last 7 years and gives us an approximate percentage return for each of those 7 days.
Some years with weekends and extra holiday days plus 252 is used as default trading days skew results a small amount. To compensate I also tested 10 trading days back from January 7. The results from the 7 days are below, I tested all the indices in my current database.
INDU is highlighted, this is the Dow 30 index. First it’s clear that in every year except for one, over the last 7 years the Dow has made gains in the Santa Claus period. The average gain Is over 1%. Not too bad for a 7 day trading period. BTW the results from the 10 days from January 7 were similar.
The NASDAQ on the contrary had 3 losing years out of the 7.
So next I decided to look at what ETFs are most likely to have a Santa Claus rally. Here’s the results using the 7 trading days back from Jan 4. This is the ETFs that had gains every year for the last 7.
The first 3 ETFS are all Gold related, the next two are real estate/REITs the last one is a bond fund. Hmm something to keep in mind.
Here’s GLD seasonal charts the right hand side of each year shows the Santa Claus rally clearly. The White line is the average of all 7 years.
Clearly no guarantees what will happen this year, but something to keep in mind.
Happy Holidays or not given how the Markets tumbled the day US Thanksgiving. BTW, it was also the last full week of November.
Time for me to run my WinWayCharts seasonal filter on my top 2500 stocks
The filter is highly configurable and I can select which period of time, looking back from a given date to find a consistent price move up or down. I’m looking for it to repeat every year going back 7 + years.
I first came across the concept of seasonal consistency through Jay Keppel’s work JayOnTheMarkets.com and his books on Seasonal Stock Market trends. Many of you will have heard of the classic seasonal patterns like ‘Go Away in May’ or “the Santa Claus rally’. My WinWayCharts seasonal screener can find these type of events in individual stocks. Events that happen every year at the same time.
Here’s how the WinWayCharts Seasonal Screener works
How long do you usually hold a trade? I like to hold a trade for a month or less, that’s about 22 trading days.. So, I have cash available to invest Monday November 29th. All I need do is pick a date one month from that date and look for stocks that consistently made a profit over those 22 trading days, long or short, every single year going back the last 7 years. You can look back further but 7 seems to be pretty good consistency to me.
It’s that Simple
November 29th to December 29th, there were a handful of long stocks with seasonal patterns and the same on the short side. I liked the short side given the current market.
All these stocks lost money in every December for the last 7 years
I highlighted GRMN and TTEK as both on average lost over 4% in December for last 7 years.
Here’s a WinWayCharts 7 year seasonal chart of TTEK the white line is the averageHere’s a WinWayCharts 7 year seasonal chart of GRMN the white line is the average
Want to go long?
While there were no candidates in my US stocks, there were 3 UK stocks showed up. BRW-LON averaged 9.61% in December over 7 years. That’s impressive.
Here’s an WinWayCharts 7 year seasonal chart of BRW-LON the white line is the average
Next time I’m going to start to look at the major markets in specific periods and see if we can identify seasonal patterns that are hidden under the radar of everyday noise.
How can I run a WinWayCharts Seasonal scan?
First download the scan from our server click here
Locate the file Seasonal 3 RD.EDS likely in your /download folder and move it to your /wintes32/EDS Strategies folder
Open WinWayCharts EDS from the Main Menu
Click File, Open and locate the /wintes32/EDS Strategies/Seasonal 3 RD.EDS file
The file is set for seasonal length of 22 days but you can change this to whatever length you wish
Remember the date you run the report, like in the example above is 12/31/2020, it looks back in this case 22 days, then it checks 12/31/2019 and looks back 22 days etc. There would be no point it setting the date to run the report to the current date as it would look back 22 days, and you’d have missed the seasonal candidate stocks move.
The EDS code based on Vitali Apirine’s article in the March issue of Stocks & Commodities magazine “Rate Of Change With Bands,” can be obtained by copying the below into a new WinWayCharts EDS file, saving the file and adding EDS custom indicators on your Charts
!Rate Of Change With Bands
!Author: Vitali Aprine, TASC Mar 2021
!Coded by: Rich Denning, 01/11/2021
!INPUTS:
rocLen is 12.
emaLen is 3.
smaLen is 12.
C is [close].
ROC is (C - valresult(C,rocLen)) / valresult(C,rocLen)*100.
smaSqr is simpleavg(ROC*ROC,smaLen).
ROCdev is sqrt(smaSqr).
emaROC is expavg(ROC,emaLen).
upROCB is ROCdev.
dnROCB is - ROCdev.
Code for the ROCB indicator is set up in the EDScode file. Figure 10 shows the indicators on a chart of Apple Inc. (AAPL). The red line in the first panel is the upper ROC band and the green line is the smoothed ROC. In the lower panel, the red line is the lower ROC band and the green line is the smoothed ROC.
FIGURE 10: The ROCB indicators are shown on a chart of Apple Inc. (AAPL). The red line in the first panel is the upper ROC band and the green line is the smoothed ROC. In the lower panel, the red line is the lower ROC band and the green line is the smoothed ROC.
The importable EDS file based on Markos Katsanos’ article in the April issue of Stocks & Commodities, “Detecting High-Volume Breakouts,” can be obtained on request via email to info@TradersEdgeSystems.com.
Excerpt “Is there anything more satisfying for a trader than capturing a huge breakout? The usual practice for breakout entries is to simply buy new highs. This method, when used in isolation, will often result in false breakouts. It is, therefore, better to wait for volume confirmation before entering the trade, as high-volume breakouts usually last much longer. In this article, I will show you how to detect breakouts using only volume, sometimes even before price breaks out, by introducing a new volume breakout indicator. “
The code is also available here:
!Detecting High-Volume Breakouts !Author: Markos Katsanos, TASC April 2021
!Coded by: Richard Denning, 02/18/2021
!INPUTS:
period is 30.
smoLen is 3.
vpnCrit is 10.
maLen is 30.
V is [volume].
!FORMULAS:
MAVol is simpleavg(V,period).
MAV is iff(MAVol>0,MAVol,1).
Avg is ([High]+[Low]+[Close])/3.
MF is Avg - valresult(Avg,1).
ATR is simpleavg(max( [high]-[low],max(val([close],1)-[low],[high]-val([close],1))),period).
MC is 0.1*ATR.
VMP is iff(MF > MC, V, 0).
VP is sum(VMP,period).
VMN is iff(MF < -MC, V, 0).
VN is sum(VMN,period). EDSPN is (expavg(((VP - VN) / MAV / period),smoLen))*100.
MAVPN is simpleavg(VPN,maLen).
Code for the VPN indicator is set up in the EDS code file. Figure 9 shows the indicator on a chart of Tesla Motors Inc (TSLA).
FIGURE 9: AIQ. The VPN indicator is shown on a chart of Tesla Motors Inc. (TSLA).
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