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Strategies & Market Trends : The 56 Point TA; Charts With an Attitude
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To: Esteban who wrote (10393)1/11/1998 3:28:00 AM
From: Doug R  Read Replies (3) of 79243
 
Esteban,

In going over your review of SGI I find that 12/15 was not a signal day. I would not include 12/19 as a signal day since the volume was only 5300 greater than the 18th. So, the only SGI signal in Dec. was on 12/29. The peak from there on 1/5 was the typical "no advance on higher volume" day. It would have been difficult to exit that day though considering emotion associated with volume as the day progressed. The next day exhibits a break of the daily trendline and would have triggered an exit.

The 11/24 signal gave a peak that was characterized by declining volume on 12/5 and 12/8. This and the 1/5 peak were common top indications (but we know how that goes in realtime). A strict use of trendlines gives a clean exit on 12/9 but the first few days of the 11/24 signal are the problem. So far, all I have come up with is the one or two (depending on your antacid supply) ticks below the signal day low as a defense during the first 3 post-signal days. After those three days, the daily trendline exit seems optimal

For TEAL, I think pre-gap avg. daily volume should be considered.

OXHP's signal day was a bit on the early side. Perhaps that is why it was such a successful short. After 3 post-signal days, the daily trendline exit works very well.

TSEMF gave a trendline exit on post-signal day 4 (12/19) For the time value I suggest that was optimal since sitting in it over the next 5 days would have been nearly excruciating after having an opportunity at a successful exit. It eventually moved up more but by that time signals on other stocks were occurring.

ESOL is such an aging cat that it has reverted to a rolling stock. Buy at 3 1/4 and sell at 4 1/4 kinda stuff.

OCAD on 12/29 was not a signal day. Volume requirement not met. I don't think OCAD has had one yet unless you think there could be a case made for designating the 30th as a signal day given the low is equal to the "new low" 29th with volume confirmation. That might make things a bit messy down the road but I'm willing to consider anything (before I toss it out the window >>ggg<<).

I think what comes out of it all is that getting in on the signal day is getting in at the bottom. A rare feat. I wouldn't be too concerned with getting out at the top, just with making a high percentage of successful trades. 4 to 10 days to lock in 10 to 20% per signal is pretty lucrative. Using the daily trendline accomplishes that and what the hell, there's alot of cats out there.

I'm ready to focus on impending signal days and work the trade for what the trendline or the stoploss gives and treat it by the book. It's more businesslike that way IMO.

Doug R

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