"Show me the charts, and I'll tell you the news."-Bernard Baruch
You saw a stock up big with hugh volume, and then a few days later, the stock is upgraded...
In some particular days, a stock’s movement will leave us a “hint”. When the stock gives us a “hint”, we say this stock have a “hint day”. All the big trends start with hint days.
You saw a stock up big with hugh volume, and then a few days later, the stock is upgraded...
In some particular days, a stock’s movement will leave us a “hint”. When the stock gives us a “hint”, we say this stock have a “hint day”. All the big trends start with hint days.
A “hint day” is a day when a stock shows one of the following:
Price closes up or down over normal daily range- Large white candle or Black candle body
- Very high volume
- Break Up (at/near the highest peak) or Break Down (at/near lowest valley)
A "hint" to go up is NOT a buy signal, and a "hint" to go down is NOT a sell signal. A "hint" just tells us the stock may worth further research. We realized that a same kind of “hint day” will have different meanings in different trends or price zones. For example, a “hint day with high volume big white candle” in a down trend stock may hint trend change, while the same “high volume big white candle up hint day” near trading range may means a break up for the stock.
Let's define several other terms.
Trend: for a given a period (for example, 150 days), if the date of highest peak is later than the lowest valley, then we said it is in “UP” trend, otherwise, if the highest peak occurred earlier than the lowest valley, then we said the trend is “DOWN”
Price zones: For a given period, we divide the price into 4 zones from the lowest valley to highest peak, with zone 1 is the zone above the middle line, and zone 2 is the top quarter zone near the top, zone -1 and -2 are the mirror of zone 1 and zone 2 of the middle line.
WavePattern: this is short-term zigzag formation, we define 4 wave patterns:
RelVolume: Relative volume. This is ratio of the “hint day” volume to the average volume. If the relative volume is high, the “hint” is more reliable.
20DayHV: This is 20 day window historical volatility. We use 20day HV as percentage for ZigZag lines. As shown below, Goog's 20Day HV is 7%, so we use ZigZag 7%, while AMZN, we use ZigZag 8%, because AMZN 20 Day HV is 8%.
You can click "Hint History for SPY" in the Market Direction Section to see an example of all "Hint Days" for SPY.
Each day, our computer generates list of stocks having “hint day”, for example, the table below shows "Hint with Large White Candle" on Jan. 29,2010.
| Symbol | Price | Trend,PriceZone | WavePattern | RelVolume | 20Day HV |
| 54. | DOWN,-2 | DownLeg Ret. | 1.95 | 4 | |
| QID | 21.54 | DOWN,-2 | DownLeg Ret. | 2.04 | 11 |
| SDS | 37.54 | DOWN,-2 | DownLeg Ret. | 1.60 | 9 |
| Click to show all stock charts from this table | |||||
|---|---|---|---|---|---|
| Generated on 29-Jan-2010; Based on 150 days; JYE@2010 | |||||
Please be very clear that the “hint” is NOT a “signal” to sell or buy. The “hint” only gives you reason that you may want to research more about this particular stock.
To do more research, simply click the Stock symbol, or Click "Click to show all stock charts from this table", this will lead to a website showing all stock charts.
In summary, we believe every big trend starts with a hint day, if you don’t want to miss the best opportunities, please check the list of stocks with hints everyday. You must wait for the right opportunities to present themselves. The best traders search only for the very best opportunities when their trading methods have edge.
When the market is in buy mode, I'd like to search stocks from "hints with big white candles", I'd like see the relative volume is high too, I would go long and my stop would be the lowest of the big white candle body. When the market is in sell mode, I'd like study the stock lists showing hints with big black candle, also with high relative volume. I would sell short of these stocks on low volume bounce. The stop is the top of the black body.Once I have positions, I monitor them, if I see hint of high volume, but the stock did not move much. It may be near top, I would sell some. If my long positions showing "hint day with big black candle", I would not necessary start to short, but I would take off some of my long position.
If the stock was in downtrend, if hint high volume occurred and the stock did not move down much, that tells me that a bottom may be near for that stock.
“Missing an opportunity is as bad as being on the wrong side of a trade.”- Bill Lipschutz
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