Berney; RE:" Growth -vs- Value Convergence : Divergence "
Yes, my E*MAIL is sfs73@ibm.net (mobile) or shelton@onramp.net (ISDN)
I'm so fixated on the sector indices now that I don't usually trade in some component, like BEL = PNX.X, unless the sector index is showing the same chart indication. Most sectors are homogenous in the sense that the top 20% capitalization components account for the majority of the sector's movement therein. Part of this bias on my part comes from my tendency to watch indices real-time intra-day, timing orders in the component I'm watching by the intra-day candlesticks. I like the idea and your clever use of intra-day stochastics, but I'm hooked on those real-time graphics. Before I had this, I used to trade INTC by looking at the NASDAQ chart of the NDX.X - now I use the SOX.X
The SOX.X is clearly dominated by INTC; CEX.X chemicals by DD; RLX.X retail by WMT. I don't like trading against these locomotives. BEL is tracking T very closely since Wednesday; BLS and SBC less so; the sector index PNX.X is still in sync with T.
So I came across a couple of interesting indices that I had not looked closely at before: SGX.X S&P Growth Index and SVX.X S&P Value Index cboe.com:80/index/barra/
These indices are artifacts of the S&P-500, one representing a measure of value and the other one growth. It's interesting to plot them against one another and look at their convergence : divergence. A similar effect can be observed by plotting the OEX.X (" growth ") -vs- the DJIA-30 (" value ") ...that is to say, the relative convergence : divergence of the OEX -vs- DJX looks just like SGX -vs- SVX.
I know that you like to read MACD, (and you be the value master, dude) so I thought you might be interested in SGX.X and SVX.X
Your recent use of the trailing STOP has caused me to re-examine my own trading style, Berney. SPY and DIA move with the futures rather than the raw indices, and it's easy to get whipsawed with tight STOPs on them. They're not good day-trading vehicles without massive positions for fractional movements, which tends to be machine-like in discipline. I always associated the trailing STOP with momentum rather than position - and my work with candlesticks has helped me judge changes in "sentiment" better, but my feeling for "extent" is not as good as it used to be.
Perhaps I should go to weekly charts, and ride my moto more (^_^)
-Steve |
