Hello Fellow ChartWatchers!
The markets continue to move sideways with declining volume - both in the long-term view and in the short-term view. Since April, the Dow has been content to drift aimlessly between 17,500 and 18,000. Similarly, the S&P 500 is vacillating between roughly 2050 and 2100. Weekly volume for both indexes declined significantly over the month of May. As I mentioned in last week's webinar, this is not a good environment for trend-followers and you need to be wary of signals from trend-based approaches right now.
For more on the markets and where they might be headed, please check out the other ChartWatchers articles in this newsletter.
Summary of Recent Scanning Webinars
In case you missed it, during the past three ChartWatcher webinars, we've focused in on Technical Scanning - an important feature of our website that is available to Extra and PRO members. Here are the key points I tried to make during those three shows:
- Scanning is super-important to technical traders. Traders that can create 2 or 3 scans that work well for them are miles ahead of everyone else.
- Scanning is about finding stocks that you might actually buy. Lots of people get into trouble trying to use scanning for stuff it was not intended to do.
- Scanning works best when you use technical "signals." A signal is when something crosses something else on the chart.
- Creating scans is an iterative process that requires thought and energy on your part. Ultimately, that is because you have to build trust in your scan - enough trust that you become willing to buy a stock based on your scan.
- Advanced Scans are just as easy to learn as Standard Scans and Advanced Scans are more powerful/flexible. Therefore, we recommend everyone use Advanced Scans even if you are just starting out.
- Advanced Scan Syntax can be tricky but it can be conquered. The best way to learn is by studying other scans. The Advanced Scan Library has tons of examples to study.
- Create specific scans that find stocks that have one or more technical signals happening "today." Avoid creating vague scans that have technical signals happening "within" a range of days.
- Use the "x" ("crosses above") comparison operator to specify technical signals in your scan. "RSI(14) x 50" means "Yesterday RSI(14) was below 50 and today RSI(14) is above 50".
- To scan for a "crosses below" situation, write it first as a "crosses above" scan and then simply reverse the expressions on either side of the "x". For example "50 x RSI(14)"
- Use square brackets to surround each clause. Only use parentheses with specific parameters to functions- like "RSI(14)" for example.
- Put each clause in your scan on a separate line. You can then add "#" at the start of the line to "comment out" (i.e., "turn off") that particular clause if you need to.
- Join your clauses together with "AND". While you can also join things together with "OR", that often leads to unexpected problems. 99 times out of 100, you should be using "AND" to further narrow down your results
- If you do use "OR" in your scan, you will need to add an additional set of square brackets around the clauses you are OR'ing together.
- Use the "Scan Builder" dropdowns on the Advanced Scan Workbench to insert examples whichever technical indicator/criteria you are interested in.
- After running your scan, save the results in a ChartList and then review that ChartList in CandleGlance mode. Use the trashcan icon to delete any results you don't like.
- You can use the "Starting ____ days ago" setting at the top of your scan to "backtest" the scan and see how it performs in various market conditions.
- The good folks at the StockCharts Answer Network (s.c.a.n.) love to help out. Don't hesitate to ask questions about scanning on that independent user-to-user message board.
There was much more that we went over during the webinars but those were some of the standouts in my book. Feel free to check out the recordings for those shows by clicking here. (Skip ahead to the 45-minute mark to see just the scanning stuff.)
And don't forget to sign up for ChartCon 2016!