Systematic Trading Strategies and Next Level Trading Setups
Complimentary Analysis
As the name suggests, Dual Momentum Rotation Strategies focus on stocks that are in absolute and relative uptrends. This is a two-step process. First, filter out stocks that are in long-term downtrends and only focus on stocks in uptrend. Second, rank
Traders can improve their odds by ignoring distraction signals and focusing on setups with real potential. In general, short timeframes are better suited for mean-reversion, while long timeframes
There is a certain ebb and flow in uptrends. Often we see some sort of stair step higher with big advances and smaller corrections along the way. In Dow Theory terms, the primary trend is up and declines within a primary uptrend are
After sharp declines into mid April, stocks rebounded over the last three weeks and the S&P 500 SPDR (SPY) came within 1% of its March high. This March high acts
Stocks fell sharply into late April and then rebounded over the last two weeks. SPY fell 5.34% from March 28th to April 19th and then rebounded with a 3.26% gain the last two weeks. Does this bounce have legs? Chartists can separate
Trends often start with outsized moves. But how do we measure and identify such moves? Chartists can measure moves in Average True Range (ATR) terms using the ATR Trailing Stop SAR indicator (ATR-SAR). ATR is a volatility indicator developed by Welles Wilder.
I am mostly a technical analyst and trading system developer, but I also like to understand the companies behind the
Momentum and trend strategies are off to a roaring start here in 2024. More often than not, these strategies buy leading stocks that appear overbought. Buying stocks that appear overbought often goes against our “gut feel”, but overbought conditions reflect strong buying pressure and this is clearly
The 200-day SMA is perhaps the most widely used long-term moving average. As its name implies, it is a simple indicator that chartists can use for trend-following and momentum strategies. For trend-following, we just need to know
The 20+ Yr Treasury Bond ETF (TLT) failed again at the falling 40-week SMA and looks poised to resume its bigger downtrend. Keep in mind that bonds and yields move in the opposite direction. A resumption of the
The Oil & Gas Equipment & Services ETF (XES) is showing strength here in March as it breaks back above its 40-week SMA. More importantly, the long-term trend is up and this week’s breakout argues for a continuation of this uptrend.
As its name suggests, the ATR Trailing Stop is normally used to trail a stop-loss for a long position. It can also be used to identify an outsized decline that could reverse an uptrend. Today’s example will show how to apply the ATR Trailing Stop on
Most stocks surged with the broader market in the fourth quarter of 2023. SPY and QQQ extended their advances in 2024, but some stocks did not partake and fell back. Even so, some of these stocks show signs of long-term trend reversals and their declines in
Chartists can improve their odds by focusing on stocks that are in long-term uptrends and showing upside leadership. This is similar to a dual-momentum approach, which was covered last week. Today’s example will use the 40-week SMA to define the trend, a 52-week high
The momentum phenomenon has been a fixture in the US equity markets for decades. There are two types of momentum to consider: absolute momentum and relative momentum. Absolute momentum refers to the underlying trend, up or down
Divergences reflect a disconnect between price and the indicator. A bearish divergence forms when price forges a higher high and the indicator fails to confirm this high. In this case, we have the S&P 500 moving higher and fewer stocks
Gold is not the most exciting asset at the moment, but it is in a long-term uptrend and it is perhaps the strongest commodity out there. There are also signs that the January decline is ending as RSI hits a momentum support zone and a bullish continuation pattern forms.
This week’s analysis will stick with the multiple timeframe approach. Today we are featuring a biotech stock with a channel breakout on the weekly chart and a classic retracement on the daily chart. Moreover, a larger bullish reversal pattern could be forming on the daily chart.
Chartists looking to increase their odds should consider two timeframes for their analysis. The longer timeframe sets the strategic tone, while the shorter timeframe defines the trading tactics
Tech stocks were hit with selling pressure to start the year, but many are still in long-term trends and some are nearing support-reversal zones. In particular, Apple (AAPL) fell to a support-reversal zone and I am on alert for a bounce. Let’s investigate.
StockCharts users can chart the Zweig Breadth Thrust for the S&P 1500 or any other index that has Advance-Decline Percent data. All we have to do its convert the Zweig Breadth Thrust levels to their equivalents using Advance-Decline Percent.
Today’s report features the Zweig Breadth Thrust, which was developed by the late, and great, Marty Zweig. We will show how it works and look at some recent signals. Despite a long history, the indicator is missing something and we will propose a modern day alternative.
The S&P 500 is battling the 200-day SMA with four crosses over the last eleven days. We are also seeing a rise in volatility as this market benchmark plunged 5.86% in nine days (18-27 October) and then surged 5.85% the last five days. With such conditions, it is a good time to step back and look
Correlations rise during bear markets. This means more stocks participate in broad market declines than broad market advances. In other words, the odds are stacked against us when picking stocks in bear markets. Traders are better off looking outside of the stock market for opportunities.