Sunday, July 24, 2011

Chart of Charts, A throwback to the past

I haven't made the chart of chart in over 9 months. It is a multi-headed monster for sure.

It uses chart pattern to analyze the state of the market, as well as number of stocks ready to breakout, which there are quite alot right now, that could be big or sustained move.

I have crossovers based on the 5, 10, and 20 day moving average of the number of stocks breaking bullish and breaking bearish. When they cross over, that triggers a change in a toggle Chart that I display all three of them (the 5 DMA crossover, the 10 DMA crossover, and the 20 DMA crossover).

One backtest I did showed that following the 5 DMA crossover would produce about 80% annual returns, the 20 DMA was around 35% annual return, and the 10DMA was the "whippiest" of the bunch and only returned around 24%, so the 10 DMA crossover is the least reliable.

Right now the 5DMA and 20DMA says bullish, and the number of stock perched on breakout is quote high.

For me personally, this makes me feel alot better with 4 long picks held through the weekend.

Chart of Charts is cool.

At the top is a scatter chart, which is interpreted as when very low number of stocks broken out, often a big move follows. Everything on these charts is saying big move, and most likely bullish.

Comments? Anyone remember the chart of charts from days of Yore?

Here is the main chart only --might be easier viewing


  1. Watching a megaphone pattern on the $SPX. We will either break it and go higher or go down to the next megaphone level if 1307. Nice chart...

  2. My 1324 hit in a.h ES motion...

  3. ES
    R1 1348.75
    PP 1340.50
    S1 1333.25
    S2 1325.50 we are here now
    S3 1310.50


  5. I normally think 5 hits on the wedge and then out the other side, not sure how that would work with triangles.   I guess after some type of debt deal is announced, Wallstreet will cheer the politicians for whatever.

    How about, ---cut the budget, no new taxes, but as a sepearte balance sheet item, get ready to replace lack of new taxes with another $600B in some kind of spun together announced stealth bailout?  





Insightful and Useful Comment!