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Hello Fellow ChartWatchers!

Today we started our Spring Special for 2013.  As long-time ChartWatchers know, it is important to take advantage of our specials when we hold them in order to minimize your charting costs.  That is true regardless of whether or not your account is about to expire.  I hate hearing from people that miss out on our specials because they didn't think that they could participate.

The deal is simple - while the special is running, all of our long-term subscriptions include an additional month of service beyond what they normally provide:  7 months for the price of 6, 14 months for the price of 12, or 29 months for the price of 24.  This reduces the "effective rate" for our subscriptions to the lowest levels we offer.  Here's our complete pricing matix with all the rates.

So, should you subscribe/renew right now?  To help with that question, I've prepared a little "decision tree" below that will help you regardless of your current situation.  Let's get started:

Q1.) Are you a current StockCharts member?

No?   Well you are in luck!  Now is the perfect time to subscribe for 6 or 12 months.  If you sign up for 6 months, you'll get 1 additional month for free (usually you don't get anything for a 6-month signup).  If you subscribe for a year, you'll get 2 additional months of service for free (usually you only get 1). And remember that all new subscriptions come with a free 10-day trial period - cancel within the first 10 days and we won't charge you a penny. To see all the benefits of subscribing and to take advantage of our Spring Special, click here

Q2.) Do you have less than 200 days remaining on your current subscription?

(Click on the "Members" tab to see your number of remaining days.)

Yes?  You should consider placing a long-term renewal order now if possible because your account will expire before our December special starts.  If you renew now, we'll give you the special deal and just add the additional time you renew for to the end of your current subscription.  Click here to see your renewal options

(Be sure to use your loyalty coupon when you renew too!)

Q3.) Do you have between 200 and 360 days remaining on your current subscription?

Yes? I'd still consider renewing now to lock in our special rates.  That way, if you miss the December special for some reason (vacation?), your charts, scans and settings will still be protected.  Click here to see your renewal options

Q4.) Do you have more that 360 days remaining?

Yes? Then you can consider skipping this special.  We will probably hold at least two other specials before your account expires.

Now, how long should you signup/renew for?  First, remember that in order to take advantage of our special, you need to signup for at least 6 months of service.  Anything less than that doesn't qualify for the extra months.

Second, note that the longer you signup for, the more you save.  For example, if you paid for 1 year of our Extra service on a month-by-month basis, it would cost you $24.95/mo x 12 months = $299.40.  However, if you bought our pre-paid 1-year Extra package, you'd only pay $249.95 and you'd get 2 additional months of service for free.  That works out to $99.35 less than the month-to-month cost for that same 14-month time period.

Lastly, if you have been a member already for more than one year, you have a loyalty discount coupon code waiting for you that you can use to further reduce the cost of your order.  That coupon is percentage based, meaning that the larger your order, the bigger your discount.

Here are some other questions you might have about our special:

• Does it matter which service I use?
  Not in terms of how the special works.  Of course each service have different abilities.  Click here and scroll down to see a comparison for each of our service plans.
• Can I use the special to upgrade my account?
  Not exactly.  The cost of upgrading an account isn't affected by our special however, after you have upgraded, you have the option of renewing your account for more time in which case our special pricing would apply.
• I forgot to use my loyalty code with my order. Can you add it?
  We hate this question.  Please do not be "this guy."  Make sure to include your loyalty coupon in your order.  Adding it later is often not possible.
•  When does the special end?
  Our specials usually end at the end of the month but please don't wait until the last second.  All kinds of things could happen between now and then.  People who play timing games with our specials are often disappointed. 

Sorry to be so salesman-like this time around, but I want to eliminate the complaints that we get after our specials are over from people that didn't understand how important they are.  But you are smarter than that, right?  ;-)

- Chip

P.S.  Because we still have a couple of spots left in our live Seattle SCU seminar on June 7th and 8th, I'm leaving our special "early-bird" pricing in effect until Monday.  Save up to $100 if you register before then.  And remember, three free months of service are included with each registration!  If you are not getting the most out of all the tools and information on our website, come to an SCU Seminar and learn directly from the people that created the website (hey, that's me!).  Click here for more details.

Hello Fellow ChartWatchers!

As I mentioned last time, we've recently started adding key economic datasets to our database so that you can chart them with our SharpCharts charting tool.  This week, we added the weekly Unemployment Indexes including the Initial Jobless Claims number.  The symbol for that index is $$UNEMPCIN.

$$UNEMPCIN behaves inversely to the stock market - when the market is doing well, initial jobless claims are falling and vice versa.  We can see this directly by charting the inverse index - $ONE:$$UNEMPCIN and overlaying that with the S&P 500.  Check out the following chart to see what I mean:

(Click here for a live version of this chart.)

This chart is a monthly line chart.  I'm using months instead of weeks to smooth out some of the noisyness of the data.

Now, in addition to the two overlaps price plot lines, I've also added the 12-month Correlation indicator and the 24-month Correlation indicator.  As you can see, both of those lines spend most of their time above the zero line in the middle of that plots.  That confirms what we can intuitively see - that the red and blue lines move more-or-less in unison (i.e., they are positively correlated).

What's interesting is that points in time where the correlation lines dip below zero.  That happens when the red and blue lines start moving in opposite directions.  Note that on the 24-month correlation line, those dips correspond with major changes in market direction.  Those same signals are on the 12-month Correlation indicator as well, but they aren't quite as easy to pick out.  Still, whenever the 12-month Correlation of these two lines dips below zero, it might be time to look for the market to change direction.

- Chip

Hello Fellow ChartWatchers!

I'm very happy to announce that we've just added a new overlay to our system - the Chandelier Exit.  This overlay is a favorite of our good friend Dr. Alexander Elder.  He discusses it extensively in his books.  It is a trailing stop overlay meaning that it tries to determine a good price level for exiting an existing position.  In that regard, it is similar to Welles Wilder's Parabolic SAR overlay.  Here's what it looks like in action:

Notice that the red line on this chart could have been used effectively as a trailing stop-loss during the uptrend.

For more details on Chandelier Exits including how they are calculated and used, please see our new ChartSchool article on them.

- Chip

Hello Fellow ChartWatchers!

StockCharts continues to grow and expand, providing more value for its users (hey! that's you!) for free.  Here are three great improvements we rolled out last week:

1.) Stocks & Commodities Articles for StockCharts Members

Our "Search" feature now automatically includes results from the complete archives of Stocks & Commodities magazine.  Members can click on any of those results to see a PDF version of the article in question.  Some of these go back as far as 1982!

In addition, members can now click on the "Stocks & Commodities" link on the right side of the "Members" page for free access to the current editions of S&C as well as the companion magazine Working Money.

And soon, watch for relevant S&C links to be included at the bottom of our ChartSchool articles!

Thanks again to Jason Hutson and his crew for making this happen.  S&C has been an amazing resource for the technical analysis community for decades and we are thrilled to have this new partnership.

2.) Economic Indicators Added -

We've started rolling out the first of many economic indicators on our website.  These new symbols all start with two dollar signs ($$).  Most are monthly datasets from the FRED website.  Here's an example that uses the new $$GDP symbol (the gray area plot):

(Click the chart for a larger version.  PRO users click here for a live version.)

To see the complete list of the economic datasets we currently have, just type "$$" into the "Create a Chart" box at the top of any of our pages.  Here's the current list (but keep in mind it will be expanding over the next couple of days and weeks):

3.) Extra Members Can Now Create and Chart Their Own Personal Data -

Last year we rolled out our User-Defined Index feature to our PRO subscribers.  We've now made a limited form of UDIs available to all Extra and ExtraRT members.  Those members can now create and use a single UDI called "@MYINDEX" by clicking on the new "User-Defined Index Workbench" link on the "Members" homepage.

A User-Defined Index allows you to upload and chart data from a spreadsheet.  The data can contain any time-series information you want.  It is a really powerful feature.  Here are some articles that illustrate how it can be used. 

4.) Bonus Improvement #4 - More Speed!

As I mentioned last time, we are continuing to upgrade our datacenter and the new servers are making a noticable improvement in the time it takes to generate charts during market hours.  Check out these charts from our independent monitoring service Pingdom:

The top chart shows the average time it took for us to generate charts during March.  The bottom charts shows the times during the first days of April.  See the nice drop on March 30th and 31st?  It represents a roughly 20% improvement in the time it takes for us to send out a SharpChart!  That improvement has continued in April as well. (Click here to see for yourself.)  And we're not done yet - hopefully we can squeeze out even more speed soon.

Do you want even more improvements?  Trust me, we're working on some doozeys.  Just stay tuned!

- Chip

P.S. If you are feeling overwhelmed by the sheer number of features StockCharts offers, why not join me for a personal tour of everything we have to offer?  I'm personally giving our SCU 101 seminar in several locations throughout the country this year including Long Beach, Seattle, Toronto, New York and Dallas.  Click here for more info.  I hope to see you at one of these events soon!

 P.P.S.  Oh yeah, one more thing...  Have you picked up your copy of Arthur Hill's first book?  What?  You didn't know Arthur Hill published a book?  OK, that's my fault for not making a bigger deal of it.  But now that you know, why not take advantage of our 50% special on Art's book?  He'd really appreciate it!  Just click here for details.

Hello Fellow ChartWatchers!

We're starting to get "Spring Cleaning Fever" here at StockCharts.  Can you tell?

Exhibit #1:  This!  This new newsletter design!  What do you think of it?  We reworked things to make the newsletter more readable, more printable and more informative overall.  In addition, we'll be converting all of our old newsletters into this new format and putting them in a huge archive section of our site for posterity.  Watch for that in the next month or so.

Exhibit #2: Did you notice the speed-up in our servers last week?  Probably not - our site has always been very fast - but we did install a new collection of 28 super-fast servers from IBM and they are going to ensure that things remain super-fast for the foreseeable future even as our membership continues to grow.  For example, these new servers have made the Scan Engine 16 times faster than before!

Exhibit #3: Finally, we're cleaning off another spot on our shelf for the latest "Best Technical Website" award from the readers of Stocks & Commodities magazine - for the 12th year in a row!  We are very, very honored to receive this award again and - unlike Google - we pledge to continue improving things (for example, Exhibit #2 above) for the foreseeable future.

So, I know it is still early in the year, but spring is in the air here at StockCharts.  Again, we hope you like the new email format for the newsletter.  Click here and let me know what you think!

- Chip

Hello Fellow ChartWatchers!

Last weekend I had a great time giving our SCU 101 seminar to a room full of people at the Dolphin Hotel in Orlando.  One of the questions that came up during that seminar was "What does the solid black candlestick mean?  I've looked all over your site and I can't find anything that talks about what the different candlestick colors mean."

OK, that is a very good question.  It's also a question that our support team sees quite often from other users.  And it is an important question that everyone needs to know the answer to.   I was glad to get that question during the seminar, but I decided not to answer it directly.

Instead, I took the opportunity to show everone in the room our "Search" feature.  Why?  Because we rewrote it last year and it works really well however many people either don't use it or they don't use it correctly.  I can make that statement because, like the candlestick question, many of the questions our support team gets each day are already answered on our website.

I told everyone at the seminar to go to our homepage, find the "Search the Site" box on the right side of the page, enter "Candlestick colors" into the box, and press the "Search" button.  Here is what the results of that search look like:

Because we programmed this search feature ourselves, we control the order of the results that you see and we can tweak those results so that the articles that are more interesting to chartists like yourself appear first.  (Our old search feature was hosted by Google and Google's results weren't nearly as useful.)

The first article listed on that search results page is a direct answer to the question that was asked in the seminar.  The "SU" icon beside it means that the answer was written by our Support staff and is stored in our Support Knowledgebase.  The next couple of articles are labelled "CS" for "ChartSchool" and are general articles about candlesticks and candlestick patterns.  We then have a link to an educational Video ("VID") about candlesticks from Arthur Hill and finally a Blog ("BL") article that Arthur wrote last November re-explaining how candlestick colors work.

So these search results are pretty useful to someone who is trying to understand how candlestick coloring works on our website.  When everyone at the seminar saw this, they immediately started searching for the answers to other "great mysteries" they had always wanted to know.  In other words, they had learned how to "fish."

I encourage you to take a moment and do this search yourself and then dig into some of those articles and videos and see what you discover.

Later, during the lunch break, several people told me they were very glad that I made them try the Search box because they had already discovered several new tricks and tips on their own.  That was great news to my ears.  It's also another example of the kind of real world value that most seminar attendees get during our courses.

So please remember to use our Search feature whenever you need help using our website.  You'll be amazed at all the things you'll find.

- Chip

Hello Fellow ChartWatchers!

Overlaid charts are a very powerful feature of StockCharts.com.  Most people are familiar with using the "Price" Indicator with the "Behind Price" Position setting to create an overlaid chart.  (If you aren't, be sure to read this article for more.)  But overlaid charts can also be tricky to interpret if you are not careful.  Consider the following chart:

Which of these two Bullish Percent Indexes has the higher value?  Looking at the chart, you'd say that both of them are currently about equal since both lines meet in the upper right corner, correct?

That would be an inaccurate interpretation however.  Notice that this overlaid chart has two different vertical scales - the one on the right (54-78) is for the main ticker symbol ($BPNYA in this case) and the one on the left (48-64) is for the first overlaid symbol ($BPCOMPQ).  

Here's the important part:  For standard overlaid charts like this, our system automatically expands the vertical scale for all overlaid symbols so that the smallest value is very close to the bottom of the chart and the largest value is very close to the top.

When you are comparing two very different things - like two different stocks or a stock with an index - then that automatic expansion works well.  However, when you are overlaying things (usually indexes) that share a common data range (e.g., Bullish Percent Indexes, Bond yields, etc.), you can easily create confusing charts.

In those cases, instead of using the "Price" indicator, you need to use the "Price (same scale)" overlay.

Compare the chart below with the chart above:

This is the correct chart to use when comparing the values (and thus the "strength") of these two indexes directly.  It clearly shows that the NYSE BPI has been consistently higher than the Nasdaq BPI for months.

Again, I created this second chart by using the "Price (same scale)" overlay with $BPCOMPQ as its parameter.  By understanding when to use the "Price" indicator" and when to use the "Price (same scale)" overlay, you will be able to create even better, more powerful charts.

- Chip

Quick Site Notes:

• We've create a new version of PerfCharts that we need help testing.
• Our Orlando SCU Seminar is next Saturday.  Wednesday is the last day to register.
• We've announced new SCU seminars for Long Beach, Seattle, and New York.
• The Seattle SCU Seminar event will be the first time we offer "SCU 102 - Customizing and Configuring Your Account"
• The next ChartCon conference will be held in 2014.  We want to ensure that ChartCon is always a high-quality event.
• Our online, educational videos area continues to grow.

Hello Fellow ChartWatchers!

The Dow moved above 14,000 yesterday at 11:04am.  How do I know the exact time that happened? I know because StockCharts tweeted about it the instant it happened.  Did you know we automatically tweet about a wide variety of significant technical signals, automatically alerting anyone who watches our Twitter feed?  It is just one of dozens of improvements we made to the website over the course of 2012.  Here are some other improvements you might not know about:

Unadjusted Data -

Just add an underscore to the front of any ticker symbol to see what the unadjusted chart looks like. (more info)

User-Defined Indexes -

Upload data from any spreadsheet and then use our tools to chart it. (more info)

Revamped Public ChartLists -

Better ways to find ChartLists that match your interests.  More rewards and perks for Public ChartList authors. (more info)

StockCharts University Seminars -

Live, all-day training seminars given by myself and/or Greg Schnell in major cities throughout North America. (more info)

More Indicators and Overlays -

We now have over 50 different technical indicators including Pring's Know Sure Thing (KST), the Mass Index and the Vortex Indicator.  (more info)

User-Defined Technical Alerts -

Members can now receive automatic emails whenever a specific technical situation occurs. (more info)

More Color Schemes and Skins -

Spruce, Graphite and Dark Green (among others) have been added to the Color Scheme dropdown.  In addition, some of those schemes support UI "skins" that change the color of your entire charting workbench to match the color of your charts.  (more info)

Gatis Roze's "Traders Journal" Blog -

Gatis' unique perspective on how real-world traders operate was a wonderful addition to our Blogs area.  His "Traders Journal" articles are highly recommended - as are all our Blog articles!  (more info)

Mobile Website -

You can now use StockCharts.com directly on your mobile device - phone or tablet and see pages specifically designed for touch-based interfaces. (more info)

Educational Videos -

Arthur Hill has created a wonderful collection of free educational videos about technical analysis and using StockCharts.com. (more info)

PRO Service Level -

For people that need more, our new PRO service level offers 5-second refreshing, historical data back to the 1960s, downloadable data, more User-Defined Indexes and Alerts, bigger charts, and more. (more info)

Improved ChartStyles -

Our most recent improvement is the addition of a new interface for creating, using and organizing ChartStyles. (more info)

Phew! and I probably forgot several other things we've added.  So what's coming next?  Well, first of all we are dedicated to continue improving the website and helping everyone get the most out of it.  That said, we are hard at work on even more great improvements which you can expect to see in the coming months and years.

We believe that this dedication to continuous improvement is why AAII called us "Best of the Best" in its latest review of web-based charting tools and why, for the readers of "Stocks & Commodities" magazine have one again voted us "Best Technical Web Site" for the 11th straight year!

Here's to an even better 2013!
 - Chip 

Hello Fellow ChartWatchers!

So far, 2013 is proving to be very interesting with bullishness dominating the stock market so far.  Since the start of the year, most of the major US market averages are up over 4% with the Russell 2000 (+5.12%) leading the way.

Looking at the market capitalization PerfChart, we see that everything is positive with the S&P 400 Mid-Caps (+5.24%) posting the largest gain.

On the S&P Sector side of things, everything is up however technology and utility stocks are significantly lagging the other sectors.

Looking at the Bullish Percent Index charts for the 9 S&P sectors, the 20-day averages for all sectors are currently moving upwards with the exception of the Utilities sector.  Given that Utilities are a proxy for the Bond market and that Bonds generally move in the opposite direction to Stocks, this is more confirmation that money is moving back into stocks right now.

Finally, the McClellan Summation Index has just moved above its previous mid-September peak, further confirming that it is currently in an uptrend (green line).

Bottom line, stocks are current bullish.

Now, do you know how to create the charts above?  Did you know that such tools existed on our website?  Are you confident that you are getting everything possible from your StockCharts.com membership?

If the answer to those questions is "No" then please consider attending one of our upcoming live StockCharts University seminars.  The first course, "SCU 101: Getting the Most Out of StockCharts.com" shows you exactly how to perform the top-down analysis I show above allowing you to always know where the market is heading.

But don't take my word for it.  Here are some actual quotes from several of the people that attended our Dallas seminar which was held just last weekend:

"If I had left before lunch, I would have received more than full value for the cost." - C.B.

"I thought that I would pick up a few useful ideas from the seminar, but in fact learned much more than I anticipated.  I came away from the course realizing that there were many useful features of the website that I was not fully utilizing to their fullest extent, and to my best advantage." - B.D.

"I learned how to make a scan that immediately paid for the class and entire weekend in the next week of trading. I strongly recommend the class." - D.J.

"If charts and technical analysis is your thing, the Stockcharts seminar is a day well spent." - P.C.

Again, I love presenting at these seminars and hope I can see you at one of them soon.  This year we will be holding seminars in Orlando, Long Beach, Seattle, New York, and Toronto.  The Orlando one is coming up fast and would be a great excuse to escape to Florida next month!  Click here for more information.

- Chip

Hello Fellow ChartWatchers!

Happy 2013!  I'd thought we'd start the year off with a bang by announcing a major new section of our website - the StockCharts Videos Archive.  We've been working hard creating new educational videos that can help anyone understand how to use our charting tools better.   Many of the new videos are hosted by Arthur Hill, our senior technical analyst.  We also have video excerpts from our recent ChartCon conferences.  And best of all, these are all free!

Click here to see our new Videos Archive page

Enjoy!
 - Chip

Hello Fellow ChartWatchers!

We've got a couple of significant new announcements for you in this newsletter so let's get right to it.

First off, I want to make sure everyone realizes that our Holiday Special is currently underway.  Right now you can subscribe or renew your account for 6 months and get one more free.  Or, you can order 12 months of service and get 2 months free.  Or, you can even order 24 months of service and get 5 months(!) free.  Don't forget that you can (and should) take advantage of this special even if your account doesn't expire for several more months.  By renewing now, you lock in at one of our best rates of the year.  Click here to get started.

Second, today we are announcing a Beta test for something we've been asked about for years and years - charts of unadjusted data.  As you probably know, we have to adjust our historical data whenever a split, dividend, or distribution occurs in order to remove the "man-made" gap that those things cause on the charts.  This insures our technical indicators don't give misleading signals however it also causes problems for people that are trying to find out the exact price that a stock traded at on a specific day in the past.  Well now - for most of the stocks we track - you can add an underscore to the front of the ticker system and get a daily, weekly or monthly chart of that stock's unadjusted data.  For example, here is a chart with both versions of COST on it:

(Click here for a live version of this chart.)

Notice how the unadjusted chart (bottom) has a big down gap on it two days ago that the upper, adjusted chart doesn't have.  That's due to a $7.00 dividend that we adjusted our normal COST chart for.

Unfortunately, we currently only have unadjusted data for stocks and not for mutual funds.  We hope to have unadjusted mutual fund data at some point in the future.  (Of course, index data is never adjusted.)  Feel free to test out of the Beta version of this feature by adding an underscore to any ticker symbol and let us know what you think.

Next up, we have a special holiday present for you - the first chapter of John Murphy's new book in PDF format!  Click here to download and read it.  In case you missed it, John's new book is called "Trading with Intermarket Analysis."  It is a completely new, full color book on John's favorite topic - the relationships between stocks, bonds, currencies, and commodities.  I think it is another must read book from John.  You can learn more about ordering the entire book here.

Finally, we've expanded our User-Defined Index feature so that PRO members who want to can now share their User-Defined Indexes with others.

In case you didn't know, a User-Defined Index (UDI) is a special symbol that contains data uploaded by a user instead of by us here at StockCharts.  User-Defined Indexes can be used to chart anything you want - economic data, your golf score, the results of a custom spreadsheet calculation, etc.

Until now, all User-Defined Indexes were private - they could only be charted by the person that uploaded the data.  These private UDIs have ticker symbols that start with a "@" character.  Now, PRO members that want to share their UDI charts can convert their Private UDIs into Public UDIs that can be viewed by anyone.  Public UDIs start with a "!" character.

To illustrate what someone could do with a Public UDI, check out the following chart:

(Click here for a live version of this chart.)

The Misery Index is the sum of the Unemployment Rate and the Inflation Rate.  You can learn more about it here.  To create this UDI, we simply downloaded the data from that website and then uploaded it as a CSV file into a new UDI.  Finally, we converted that UDI (initially called "@MISERY") into a Public UDI called "!MISERY".  

I encourage everyone to try out this index.  It's a monthly dataset best charted as a "Line" chart.  We will continue to update this index each month.  As other PRO subscribers publish more Public UDIs, anyone can learn about them using our new Public User-Defined Indexes page.

Happy Holidays everyone!
- Chip 

Hello Fellow ChartWatchers!

With the market fluctuating significantly right now, the ability to spot trend changes early is critical.  Here's an updated re-print of an article I wrote back in 2003 that is still very relevant almost 10 years later.  It's about using our Scan Engine to find divergences - situations where one stock is going up and another is going down (or vice versa).  Enjoy!  - Chip

Scanning for Emerging Divergences

One of the most important technical signals to watch for on any chart is a divergence. Simply stated, a divergence occurs when prices move in one direction (up or down) and an indicator based on those prices moves in the opposite direction.

Divergences signal impending changes in the direction of a stock's price. They come in two flavors - "positive" (AKA "bullish") and "negative" (AKA "bearish"). A positive divergence happens when an indicator starts moving higher after prices have been in a downtrend (a potentially bullish development). A negative divergence occurs when an indicator moves lower while prices are still rising and is a bearish warning signal.

Any oscillating indicator can be used in a divergence study. Popular choices include the MACD, Stochastics, and Wilder's RSI. Many people also use indicators that include volume information - Chaikin's Money Flow for example - since price and volume often diverge at key turning points.

Unfortunately, like many things in the field of technical analysis, spotting divergences while they are still forming can be tricky. The biggest problem is distinguishing between a real divergence and just random "noise" on the chart. Just because a stock moves up for two days while its RSI (for example) declines, it doesn't necessarily mean that a significant divergence has developed - yet.

Often, peak-and-trough analysis is used to find divergences. If, for example, two or more rising troughs appear on the price plot (an uptrend), while two or more decline peaks appear at the same time on the indicator graph (a downtrend), a bearish divergence has been identified. This is how divergence is often taught in textbooks.

As with all forms of peak-and-trough analysis, there are two key problems with this approach. The first problem is that clear trendlines take time to form. The underlying trading opportunity associated with the divergence may be over by the time an unambiguous picture appears on the chart. The second problem is that identifying significant peaks and troughs is often very subjective - one person's significant peak is another person's random spike. For these reasons, peak-and-trough divergence detection is hard to automate (i.e., you can't create scans for it) and it is best used for finding exit signals for existing positions.

Simple divergence scans can be created by selecting (somewhat arbitrarily) a time duration (5 days for example) and seeing if prices have increased by more than a given percentage while the associated indicator has decreased by a different given percentage. Here's a sample scan that uses that technique:

[type = stock] and [close > 1.0] and [volume > 40000] and [close > 5 days ago close * 1.025] and [[[macd line(12,26,9) - 5 days ago macd line(12,26,9)] / AbsVal(5 days ago macd line(12,26,9))] < -0.08 ]

In this example, the price must have increased by at least 2.5% over the past five days, while the MACD value must have decreased by at least 8%. (Note: The advanced scan interface must be used because a function of a function (i.e., AbsVal of the MACD) is needed.)

While this technique is easy to program into a scan engine, its results are hit-and-miss. Many of the charts returned by this kind of scan are not really experiencing a negative divergence. A visual review of all stocks returned by this kind of scan is a necessity.

A different technique is to use the Min and Max functions to ensure that we are at the highest (or lowest) point on the chart for a given time duration. If the stock's price is higher than it's been in the past thirty days (for example) and the indicator is currently lower than it's been during that same period, there's a good change a divergence is occurring. Here's a sample scan that uses that technique:

In that example, we're looking for stock that closed higher than the highest close during the previous thirty days and that had a Chaikin Money Flow (CMF) reading that is currently lower than the lowest reading during the previous thirty days. Here's one of the charts that this scan returned for me today:

If I was an SLH shareholder (and I am not), I'd be concerned because the weakening CMF line calls into question the strength of the current uptrend.

This technique is not fool proof either and also requires visual inspection of the results. While no divergence scan is perfect, the two examples above are good starting points and can be customized to suit almost anyone's trading style. I encourage you to study them closely and incorporate them into your stock hunting toolkit.

- Chip

Hello Fellow ChartWatchers!

It's a question I get everywhere I go.  After every talk I give, someone comes up and asks "What's the one market indicator I should watch to see where things are headed?"  Many years ago that question gave me fits.  In my brain I'd immediately have 1,000 thoughts:  "There are so many indicators to choose from" and "Each indicator is interpreted differently" and "What if there are conflicting signals?" and "What if the NYSE changes its membership?" and...  You get the picture.  Needless to say, the answer that came out of my mouth back then wasn't pretty, or easy to understand.

Now the answer is simple:  The NYSE Bullish Percent Index - period.

I've written extensively on Bullish Percent Indexes (BPIs) before.  If you are not familiar with them, please click here to learn more.  The NYSE BPI ($BPNYA) is the "granddaddy of them all" and is one of the broadest BPIs we publish.  On numerous occasions in the past, it has been a leading indicator for the market and it always deserves periodic attention from serious ChartWatchers.

So what is it telling us now?

Click the chart for a live version.

Well... the picture is not promising for a continuation of the long-term uptrend that started in 2009.  The chart shows that, just like it did during the previous uptrend that went from 2002 to 2007, the NYSE BPI is breaking down and diverging from the S&P 500 index.   Recently the index tried and failed to rise back above the 70% level.  That failure is significant because it continues a trend of lower peaks on the chart going back to the start of 2011 and creates a clear divergence with the S&P's uptrend.

A similar situation occured in mid-2005 when the index failed to stay above 70 (and then failed again twice in 2006) .

Now that the divergence with the S&P is clearly established, any significant weakness in the NYSE BPI should be taken as a warning sign.  Conservative investors may watch for a move below 40.  That would have gotten them out of the previous uptrend just after the start of 2007.  Aggressive investors may watch for a move below 30 which, in the previous uptrend, would have gotten them out at the end of 2007.

If the market starts to move higher again, pretty soon you will start hearing hoopla about the S&P reaching 1500, the Dow closing in on 14,000, etc.  Don't be fooled.  Keep your eye on the NYSE Bullish Percent.  If it continues to slump, the 2009 rally will not last much longer.

- Chip Anderson

P.S. I would love to meet you at one of our upcoming SCU Seminars.  During the SCU 101 seminar, I go into much more detail about Bullish Percent Indexes, Sector Rotation, and how to use all of the various tools on our website.  We have upcoming seminars in Dallas, Orlando, Seattle, LA and New York.  Click here for details.  I hope to see you soon!

Hello Fellow ChartWatchers!

Long-time ChartWatchers know that from the very beginning, StockCharts.com has been about the synergy of three things: Great online finanical analysis tools, Great educational content, and Great market commentary that brings it all together.  Today, I'm happy to announce a significant expansion to our StockCharts University (SCU) seminar series that will bolster our educational efforts tremendously.

At this point, we've held three seminars with our initial SCU class - "Using StockCharts.com Successfully" - and all of them were very positively reviewed by the people that attended.  Our latest event - in New York last week - was our most successful yet.  Based on that success, we have designed a complete set of SCU courses that can help everyone regardless of their experience level.  Here's what it looks like:

The chart above shows how each class builds upon the previous one, increasing both your knowledge of the tools as well as your ability to use technical analysis successfully in your investing.  The 100 level classes give you a core understanding of how to use StockCharts.com, the 200 level classes classes focus on increasing your knowledge of technical trading, and the 300 level classes help you master specific, high value skills.

We will be giving these classes on a regular basis at locations throughout the US and Canada.  Currently, we have the 101 class scheduled for Dallas, Orlando, and Calgary.  We expect have additional classes in Los Angeles, Seattle, New York and Toronto later in 2013.

In addition to giving you the training you need to be successful, these classes are a great value because they include 3 months of our Extra service, the latest eBook from Alexander Elder, a DVD of the SCU 100 class ("Foundations of Technical Investing"), a StockCharts flash drive, and more.  You also get to talk directly with the instructor about any issue you are having with the website.

Currently, I'm personally teaching the 101 classes,  Over time the plan is for Greg Schnell - the author of our Canadian Technician blog - to teach the 100 level classes so I can present the 200 level classes.  In addition, through the magic of the Internet, John Murphy makes a "virtual" appearance at these classes whenever possible.

You can learn more about our upcoming seminars - including the very special one Greg Schnell is giving in Calgary - by clicking here.

On a personal note, I'd love to see you at one of these events so we can meet and talk about how you can use StockCharts.com to its full potential.  I hope to see you soon.

I'll conclude with a quote from Dave K. after he attended our SCU 101 class in New York last week:

"I've been using Stockcharts for a couple of years and wanted to see its full range of capabilities. The Stockscharts University seminar was perfect for this, and the material was presented in a cogent and interesting way. Back on the desk I immediately began using new functions I learned and I'm sure it will improve my trading decisions. All in all a day very well spent, and highly recommended."

Thanks Dave!  Again, click here for more information on SCU.
- Chip

Hello Fellow ChartWatchers!

We've had interactive, Java-based PerfCharts going back to the very start of the website.  And while those PerfCharts are very useful, they do have some limitations.  For one, members cannot save them into their accounts.  Also, our interactive PerfCharts cannot be annotated with our ChartNotes annotation tool.

Today, I'm pleased to announce a new feature for all StockCharts.com users - our new Performance Chart Workbench.  It makes it very easy to create, annotate and save performance charts based on our SharpCharts charting engine.  In addition to being much easier to use, these PerfCharts also have the "baseline" feature that our regular SharpCharts Performance charts do not have.  

One of the key things this new workbench allows is the ability to create, annotate and save a Performance Chart that compares the year-to-date performance of the major markets.  Here's an example:

Click here for a live example of this chart using the new workbench.

(Did you notice the new percent measuring annotation I used on that chart?)

And now our PRO members - who can add up to 10 different tickers to one chart - can now easily duplicate our S&P Sector PerfChart using this new workbench and then annotate and save the result.  Just like so:

PRO members can click here for a live version of this chart.

Notice how that chart uses $SPX as the baseline - i.e., the performance of $SPX is subtracted from the performance of all the ETFs so that the S&P 500 forms the zero line on this chart.

To create your own SharpChart-based PerfChart, simply enter more than one ticker symbol into the "Create a Chart" box at the top of any of our web pages.  Separate your symbols with commas and then press "Go" to see your chart.

Enjoy!
- Chip

Hello Fellow ChartWatchers!

The Fed spoke and the markets took off.  StockCharts.com was one of the best places to watch as stocks surged in the wake of the Fed's QE3 announcement.  You can read more about how it affected things from the rest of the columnists in this week's newsletter.  As for myself, I'm going to talk about how you can now create and chart your own personal Bullish Percent Index with StockCharts.com.

MY OWN "SMALL CAP" BPI

In case you haven't heard, Bullish Percent Indexes are one of the best ways to measure the strength of a group of stocks.  A BPI is a daily market indicator that shows the percentage of stocks in a group that have bullish looking Point & Figure charts.  To compute a BPI, each day you count up the number of stocks in your group that currently have the "P&F Buy Signal" pattern on their P&F chart.  You then divide that number by the total number of stocks in your group and multiply by 100 to get the BPI value for the day.  After gathering these values for many days, you can then chart the results to get a sense of how strong the group has been over time.

We here at StockCharts have been automatically calculating 19 different BPI's every day including $BPNYA (the BPI for all NYSE stocks), $BPCOMPQ (all Nasdaq stocks), $BPTSE (all Toronto stocks), and many others.

But what if you want to chart a BPI for a group of stocks that we don't cover?  Now, with the User Defined Index (UDI) feature of our PRO service, you can!

You start by creating a group of stocks that you want to use for your BPI.  You can choose from some of our predefined stock groups or you can create a ChartList in your account, add whatever symbols you want, and use that as your group.  For the sake of this example, I'm going to use the 600 stocks in the S&P Small Cap index to create my own "Small Cap" BPI.

Once you have a group in mind, you can use our Advanced Scan Engine Workbench to create a scan that shows you how many stocks in your group have a P&F Buy Signal.   Your scan should have two clauses, one for your group / ChartList, and one for the P&F Buy Signal.  Here's an example:

You can use the "Sector and Industries" dropdown, the "Indexes and ETFs" dropdown, or the "ChartLists" dropdown to help you create the first clause in the scan.  You then use the "P&F Patterns" dropdown to add the "P&F Buy Signal" clause to the end of the scan.

Now, make sure that you have a zero in the "Starting" box at the top of the scan page and that "Last Market Close" is selected from the top dropdown, then press the "Run Scan" button.  You should then see a page full of scan results.  For the BPI calculation, you only need to see the "Count" of the scan results - i.e., the number of stocks that was returned.  In the case of the scan I showed you above, the count is 412.

To calculate the BPI value for today, you take that count and divide it by the total number of stocks in your group, then multiply it by 100.  In my example, Friday's BPI value turns out to be 68.67.

For safety sake, I recommend that you write down that value and the date that it corresponds to (Sept 14th in this example) on a sheet of paper in order to make sure your work isn't lost.  Later, we'll enter that information into your User-Defined Index area.

Now, knowing today's BPI number is useful, but we'd love to see a chart of recent BPI data for our group in order to see if any trends exist.  To "back-calculate" BPI values for previous days, we simply change the number in our scan's "Starting" box, re-run the scan, and recompute the BPI value for that day.

Note - It's important to record the calendar date for each BPI value you calculate.  It make that easier, you can use the popup calendar that automatically appears when you click inside the "Starting" box.

Continuing our example, when I change the "Starting" box to "1" and re-run the scan, I get 400 results.  So I record 400/600 = 66.67% as the value for Sept. 13th, 2012.  I get 390 stocks for Sept. 12th, 388 for the 11th, 387 for the 10th, and 380 for the 7th.

Feel free to go back as far in time as you'd like but keep one thing in mind - if your group is a sector or index that changes its membership over time, the further back in time you go, the less accurate your "back-calculated" BPIs will be because you will still be using the current group membership.

Once you have a nice amount of BPI values written down, it's time to enter then into your User-Defined Index (UDI) symbol (typically called @MYINDEX) so that you can chart them.

To enter your data into @MYINDEX, go to the "Members" page and click on the link for the "User Defined Index Workbench."  Once there, click on "Delete All Data" to get rid of any previous data you had in @MYINDEX and then start entering the BPI dates and values that you wrote down in the previous step.

Note: You only need to enter the date in the "Date" field and the BPI value in the "Close" field.  Leave the other field blank and hit "Add Row."  We'll automatically fill in the other rows.

After your data is entered, press the "View Chart" link to see the results.  For our "Small Cap BPI" example, here's what I got after back-calculating date back to the start of August:

So this shows that the small-caps have strengthened significantly since August 1st confirming similar strength seen in charts of $SML and $RUT.

The larger point here is that PRO members can create and chart BPIs for any collection of stocks they find interesting using these techniques.  The even larger point is that PRO members can create and chart any index they want, not just BPIs.

- Chip

Have you used our User Defined Indexes to create a new / unusual / unexpected kind of chart?  If so, let us know about it and we may feature your work in a future article.

Hello Fellow ChartWatchers!

Last month we added a feature that many of you have been asking for for a long time - custom technical alerts!  Today I want to spend some time showing you how they work and one of the best ways they can be used to help you make better investing decisions.

First off, let's review the typical process for investing with technical analysis:

1. Use custom technical scans to search for stocks that have a chart setup that you are interested in trading.
2. Use SharpCharts with your custom indicator settings to find the best scan result(s) and determine entry point and exit conditions.
3. Enter the position.
4. Monitor the stock for technical warning signs and/or sell signals.
5. Close the position when sell signal given.

OK, so StockCharts Extra and PRO members have always had the tools to perform tasks #1 and #2.  Tasks #3 and #5 are done via your trading platform.  Which leaves us with task #4 - monitoring your open positions for technical warning signs and/or sell signals.

Our new Custom Technical Alert feature is intended to automate much of that task.

A technical alert is a set of technical criteria which you create (just like our Advanced Scans) that we then continually evaluate while the market is open.  If the alert's criteria ever becomes true, we send you an email notifying you of that event.

So, imagine that you are a technical trader who thinks that the Parabolic SAR gives a great set of signals for tech stocks in the S&P 500.  (This is a simple example for the sake of this article - real trading signals are often more complex.)  Whenever you are out of the market, you are using your trusty Parabolic SAR scan to find opportunities to get back in.  Here's what that scan might look like:

 [group is SP500] and [group is TechnologySector] and [Today's Low x Parabolic SAR(0.02,0.2) ]

This scan finds all large-cap technology stocks that just had the dot for today's Parabolic SAR move below today's price bar - the standard (simple) Parabolic SAR signal.  (Remember, the "x" in the middle means "crosses above" in our scan system.)  When I run that scan for today (Sept. 1st, 2012) I get 5 results: CERN, GLW, LLTC, MSFT, and SAI.

For Task #2, you'd use our SharpCharts charting workbench to examine each of those 5 stocks in greater detail.  For the purposes of this article, let's say that after you studied all 5, you decided you really liked the chart for CERN:

Click here for live version of this chart.

So, you then do some more analysis with that chart to determine your entry strategy, your stop locations and your exit strategy.  (Dr. Elder's eBook in our bookstore is a great place to learn more about this part of the process.)  You then - task #3 - place an order with your broker to buy the stock.

Terrific!  All finished.  Right?

No.  Now, with custom technical alerts, you can finally automate task #4 - the monitoring process.

For our example, let's assume that you plan on holding CERN until the Parabolic SAR gives a sell signal (which happens when the dots first move back above the price bars).  In other words, you want to be notified when the following condition is true:

[symbol = 'CERN'] and [Parabolic SAR(0.02,0.2) x Today's High]

The first part of this alert expression ties our alert to the only stock we are interested in monitoring, CERN.  The second part of this alert expression is essentially the opposite of the scan expression that you used to find the stock during task #1 above.  It will be true when the Parabolic SAR's dots move back above the price bars - which is our sell signal.

To enter that alert into StockCharts, Extra and PRO members can login and use the new "Technical Alert Workbench" via the link on the "Members" page:

Simply enter your criteria and then click "Add/Modify Alert" to add the new alert to our system.  You'll want to give your alert a name that matches what it looks for - something like "CERN Parabolic Sell Signal" in this case.

That's it!  Once an alert has been added, we will continuously run the alert until its expression(s) become true.  In this case, we will run the alert until the expression returns more than zero results.  Once that happens, we will send you an email automatically.

Pretty neat huh?

There are some things to keep in mind when using our technical alerts:

• Extra and ExtraRT members can have up to 5 custom alerts saved in our system at any one time.  PRO members can have up to 50.
• Just like our custom technical scans, our alerts are based on daily data bars.  That means that you need to express your alert in terms of the technical conditions that happen on a daily chart.
• Because our alerts are based on daily data, they can only be triggered once per day.  When a signal appears on a daily chart, we will alert you at that point.  If, later in the same day, the signal disappears and then reappears a second time, we will not alert you about that second occurance.
• Alerts are typically associated with one ticker symbol (as shown in the example above).  If you create an alert that applies to multiple ticker symbols, the alert email is not able to show you which ticker symbol(s) triggered the alert.  In that case, you would need to re-run your alert criteria as an Advanced Scan to see those results.
• Unlike scans, saved alerts are continually evaluated by our servers.  All saved alerts are re-evaluated at least once every minute the market is open.  This makes it important that you pause/delete alerts that you are no longer interested in.
• We also publish many Predefined Alerts on this page.  Predefined Alerts also generate Twitter messages with the hashtag #sccalerts when they occur.

The scenario I described above is the "standard" scenario for which we designed our technical alerts feature.  That said, there are a couple of other very interesting ways this new feature can be used.  Check out my blog over the next week or so for more examples and ideas on using custom technical alerts.

- Chip

Hello Fellow ChartWatchers!

Last weekend's ChartCon conference in Seattle was amazing.  Myself and the other newsletter authors met so many terrific people during the event and the feedback that we are getting from the attendees is extremely positive.  Thanks again to everyone that attended!

We made several big announcements at ChartCon, but the biggest had to be the announcement of our new PRO service.  PRO is a new service for members that want to break through the limitations of our Extra and ExtraRT services.  15-second refresh rate too slow for you?  PRO refreshes every 5-seconds.  1500-pixel charts too small?  PRO goes up to 2500-pixels.  Five user-defined alerts not enough?  PRO users can have 50.  Click here for a complete list of PRO's features and how they compare to our other services.

(Just so you know, PRO is not intended for everyone. If Basic or Extra works well for you then please don't feel compelled to upgrade. Only upgrade to PRO if you really need one or more of PRO's features.)

While PRO has a lot of features to talk about, right now I want to focus in on what I think it its most powerful feature: User-Defined Indexes.

A User-Defined Index is a dataset that you create and maintain.  You enter the data - either by hand or via an spreadsheet upload - and then you can chart it and analyze it using our SharpCharts tool.

So, what can you do with a User-Defined Index?  Here's a partial list of ideas:

• Create and chart your own Bullish Percent Index
• Create and chart any other sentiment information you can think of (# of CNBC commercials per day anyone?)
• Upload and chart economic data from the St. Louis Federal Reserve
• Upload and chart any of the datasets from websites like Wikiposit.org
• Calculate your own technical indicator using Excel formulas and chart the results
• Eliminate "bad" datapoints from our regular data and chart your corrected version
• and much, much, much, much more...

Are you starting to get excited?  Before we get too much farther however, I do need to mention that there are some limitations for User-Defined Indexes:

• Right now, only PRO users can create and use them.  That may change in a year or so after we've made sure that our systems can handle their performance impact. 
  
  UPDATE: PRO, ExtraRT and Extra members can now create various kinds of User-Defined Indexes.
• Initially, PRO users can only use one single User-Defined index.  (They can re-use it as often as they want however.)  We plan on allowing PRO users to create several additional indexes at some point in the next couple of months. 
  
  UPDATE: PRO Users can create up to 10 User-Defined Indexes.  ExtraRT and Extra members can only create one.
• PRO users can access their data via the special @MYINDEX ticker symbol.  In the future, we will allow PRO users to specify their own ticker symbol and description for their indexes. 
  
  UPDATE: PRO Users can give their indexes any ticker symbol they want (as long as it starts with "@").  ExtraRT and Extra members can only have one index named "@MYINDEX."
• User-Defined indexes can only store daily, weekly, monthly, quarterly or yearly data.  They cannot store intraday data.
• Currently, user-defined indexes cannot be shared with others.  We hope to be able to remove that restriction for PRO users in the next couple of months.  For now however, they cannot be emailed, tweeted, bookmarked, or even added to a Public ChartList.  Any data that you add to your user-defined index will only be visible to you. 
  
  UPDATE: PRO members can choose to make any of their User-Defined Indexes shareable so that they can be seen by others.  They can also keep their indexes private if they do not want other people to see their data.  ExtraRT and Extra members cannot share their index data with others.

OK, enough with all the legal-sounding limitations.  Let's see these things in action!

Charting the Quarterly Rate of Change for the US GDP

The St. Louis Federal Reserve maintains a treasure trove of free economic and financial data on its "FRED" website.  Click here to see for yourself.  Included on that site is the quarterly data for the US GDP going back to 1947.  To download that data, go to the FRED website and click on "Real GDP" in the middle of the page, then click on the "Download Data" link that appears on the left side of the page.  Finally, select "Text, Comma Separated" as the "File Format" and click the "Download Data" button to store the CSV file of that data on your computer's hard disk.

Next, assuming you are a PRO member, you'd go to the Member's homepage and click on the "User Defined Indexes" link at the bottom of the "PRO Control Center" part of the page.  If you already had some data in your index, you'd need to clear it out by clicking the "Delete All Data" link.  (This assumes that you have a copy of your old index data stored on your hard disk.)  Then you'd click the "Upload Spreadsheet Data" button, select the CSV file you just downloaded from FRED, and click "Upload".  Finally, if the upload was successful you can click on the "View Chart" link to see @MYINDEX in all of it's glory!

Hmmm...  That doesn't look too impressive does it?  See if you can spot the problem before reading the next paragraph.

The problem is that this is a daily chart however the GDP data from FRED is quarterly data.  (If you spotted that on your own then good for you!)  Let's change the chart settings to Quarterly (another PRO-only feature by the way) and remove all of the default indicators and overlays since we won't be needing them.  We'll also change the chart's Type to "Area", the color to green, and lower the Opacity a smidge to make things look better.  And voila!

There's a GDP chart going back to 1980! Terrific! But wait a second. FRED gave us data going all the way back to 1947.  To see all of that data, we need to change the "Bar" setting in the "Range" area of the chart from 5 to 1.  That will allow SharpCharts to squeeze that extra data onto the left side of our chart.  (We also need to turn off log scaling.)  Here's the result:

Wow, a chart going back to 1947 - that's also a new PRO feature.  Basic and Extra charts can only go back to 1980.

So now, let's add the Rate of Change (ROC) indicator to this chart to see the quarter-to-quarter fluxuations in the GDP. We'll choose "Rate of Change (ROC)" from the Indicator dropdown below the chart and we'll use "2" as the parameter so that we get the quarter-to-quarter change.  Finally, we can choose "Behind Price" for the position so that it is overlaid on top of the GDP plot.  Here's the final result:

Pretty cool huh?  (Check out the dates where the ROC line dips below its dashed zero line.)  We could use any other technical indicators or overlays that we want to in order to further analyze this data.  We could annotate it, store it in a ChartList, and even compare it to $INDU, $SPX or any other ticker symbol.  Powerful stuff!

Finally, keep in mind that I can do the same thing with ANY time-series data that I can somehow get into a CSV file - i.e., anything that I can get into Excel.  I don't know about you, but my mind is still boggling over that.

For more on all the new features we've been introducing over the past week, be sure to read the recent articles in the "Chip Anderson" area of our Blogs section.  I'll be posting more examples of things you can do with User-Defined Indexes in that area in the coming days so check back often.

- Chip

P.S. If you are interested in upgrading to PRO (or seeing how much that would cost), click on the "Your Account" link in the upper right corner of any of our webpages.

Hello Fellow ChartWatchers!

Today I'm happy to announce that we've started rolling out several important new features for our SharpCharts charting tool.  These new features include more choices for bar periods and an improved version of our interactive "Inspector" tool.

I'm even more pleased to announce that this is just the beginning of the big announcements for this upcoming week.  Of course, at the end of the week we are holding our annual "ChartCon" conference here in Seattle.  In addition to being a great event for everyone that attends, ChartCon provides us with a unique opportunity to annouce and demonstrate new features to a live audience of great StockCharts users.

So in preparation for ChartCon, we've been working hard to complete a long list of significant improvements to the website.

The first couple of changes happened last week when we released several new and updated color schemes for SharpCharts including our newest scheme called "Solar."

Next, we added a 2 year option to our subscription plans.  These non-refundable 2-year plans drop the "per-month" cost of our service even lower by including 3(!) additional months for free.  So if you use our 2-year plan for our ExtraRT service, you'll save $213.55 over the month-by-month cost.  Basic members can save $103.70 via the 2-year option.

Yesterday, we added three new time period choices to SharpCharts for our members.  In addition to the nine period choices thay are used to, members can now create charts with 2-minute, 3-minute, and 2-hour bars. Here's an example of a 2-hour Solar chart for Facebook going back to its IPO:

(Click the chart for a live version.)

On Monday, we plan on officially releasing a new blog called "The Best of s.c.a.n." which will contain edited "Question and Answer" articles from the "StockCharts Answer Network," our user-to-user help forum.  We've combed through all of the great information on s.c.a.n. and we have selected some of the best, most informative articles that everyone should read as entries in this new blog.  Again, watch for its official debut on Monday.

Now, who would like some new indicators?  Well, we have 8 powerful new indicators headed your way.  They should arrive by Tuesday and will be available free of charge to everyone.  They are:

• Coppock Curve
• Ease of Movement (EMV)
• Know Sure Thing (KST)
• Mass Index
• Negative Volume Index (NVI)
• True Strength Index (TSI)
• Ulcer Index
• Vortex Indicator

It will take us some time to get the ChartSchool articles for these indicators created.  In the mean time, you can learn more about them in Wikipedia.  Again, look for them to appear on Tuesday.

What's up for the rest of the week?  How about parabolas and rotating, translucent shapes in our ChartNotes tool?  How about having the workbench colors match the colors on your chart?  How about technical alerts?  How about the ability to create your very own index?  And how about a whole new service level that shatters all of the limitations of our current system?

All I can say right now is "Stay tuned!"  This will be - by far - the BIGGEST week ever for StockCharts.com in terms of new announcements.

- Chip

P.S. If you live in the Seattle area and want to become a better chartist, there are still some seats available for ChartCon 2012 because of some last-minute cancellations.  So, despite what it says on the website, we can still get you in if you want to sign up.  ChartCon will be this Friday and Saturday in downtown Seattle.  Click here for more info.

Hello Fellow ChartWatchers!

At StockCharts.com, we go to great lengths to make sure that our indicator values are calculated correctly as discussed in that article.  Here's a repeat article from 2010 that talks about how we work hard to make sure that the data used in those calculations is as accurate as possible.  Enjoy. - Chip

On Data Accuracy at StockCharts.com

First off, I want to talk about the differences between intraday data and daily data with respect to accuracy.  The key thing to keep in mind here is that after the stock markets close, the daily quote (open, high, low, close and volume) for each stock is audited by the exchanges.  That means that the people at the exchange go back and review all of the trades for each stock - tossing out any incorrect numbers - and then reissue the "official" values for open, high, low, close and volume for that stock.  In order to make sure we have the "official" numbers, we recollect the daily data from our data vendors several times each day after the market closes.  Our goal is to have "official" numbers in our database for every stock's daily values.

Having accurate daily values is important for several reasons:

• The exchanges try very hard to publish accurate daily quotes and we want to take advantage of their efforts.
• Daily data can be cross-checked from multiple public sources like Yahoo Finance and Bloomberg.
• Daily data is used to create weekly and monthly data bars.

The bottom line is that we work really hard to collect accurate daily data from our data vendors every trading day.  Intraday data is a completely different story however.

Unlike daily data, Intraday data "is what it is."  The exchanges do not audit intraday data values and issue corrections.  There aren't any other public sources where intraday data can be cross checked.  Intraday data is essentially a running record of what our data feed told us the stock was trading at during each minute of the trading day.  If a bad data point gets into the datafeed somehow, we faithfully record and preserve it.  Intraday data is the "chaotic wild west" of Wall Street.

That said, we still work hard to fix intraday data once it gets off the datafeed and into our databases (which happens after the markets close each day).  Once the data is "ours" we can go in a fix any blatantly obvious problems like spikes and dropouts.  Unfortunately, without anything else to compare our intraday data to, we often aren't sure if a spike is real or not.  In those cases, we'll err on the side of caution.

ADJUSTING HISTORICAL DATA

Let me state this clearly:  StockCharts.com adjusts our historical price data to eliminate the "artificial" effects of splits, distributions and dividends.

Those adjustments ensure that our technical indicators provide accurate signals at all times.  Without those adjustments, incorrect buy and sell signals would occur on our charts and in our scan results whenever a stock undergoes a split, dividend or distribution because those events cause gaps to appear on the chart.

When we first created this website, we consulted all of the experts we could find on this subject.  Should we adjust for splits?  What about dividends and distributions?  Should we adjust our data even for really small stuff that no one else notices?  "Adjust your data for everything no matter how small" they said.  Experts like Carl Swenlin and John Murphy were very clear - unadjusted data causes huge problems.  So we did.  And we have since the beginning over 10 years ago.  Our goal remains the same - adjust all historical data to eliminate those "artificial" gaps.

The downside to adjusting our data is that our charts should not be used to determine past buy and sell prices.  Often - around tax time - we get questions about this.  "My broker said I bought this stock at $50 but your chart shows that it was at $25 on that date."  Don't do that.  Your broker's records are for tax purposes.  Our charts are for technical analysis.

MAINTAINING DATA ACCURACY

Unfortunately, data accuracy is a never-ending struggle.  We have several people here dedicated to keeping our databases in synch with the hundreds of ticker changes and updates that happen "behind the scenes" each day.  One of the big benefits of using StockCharts.com is that you get all of those updates "for free" as part of our service.  But don't forget that there is effort - lots and lots of effort - going into keeping our data as accurate as possible.

And yes, from time to time we miss things.  We are always glad to hear from our users about a data issue that we can fix.  Anything that helps us improve our data accuracy is welcome.

So as I said last time, we are fanatical about accuracy here at StockCharts because we know that our users are also fanatical about accuracy.  And we will continue working hard to ensure that our charts remain the most accurate anywhere on the Internet.

- Chip

Hello Fellow ChartWatchers!

I'm pleased to announce that we have just added 4 new color schemes to our charting workbench.  These schemes are specifically designed for people that like light colored charts on black backgrounds.  Our older "Night" color scheme is one of our more popular schemes but it has gotten a little long in the tooth over the years.  These new "Dark" color schemes bring our support for black-based charts more up-to-date.  Here's what they look like:

The new schemes are called (from left to right) - Dark Gray, Dark Green, Dark Amber, and Dark Blue.  Click on the charts above to see a live example.

Check out these new schemes and see if they work for you.  If so, then welcome of the "Dark" side.  If not, don't despair.  We're working on some new "White-side" color schemes and hope to have them available soon.

Take care everyone,
- Chip 

Hello Fellow ChartWatchers!

The bears are out and pulling the market lower.  All of our market commentators will discuss the latest technical developments below (including some potential "safe havens" that may benefit from the current market moves) so we decided to give you an extra-long, extended version of John Murphy's commentary in this week's newsletter.  It starts in the next section.

Before I clear out of the way for John, I did want to mention two things:

First off, our Summer Special is now in effect.  If you are thinking about joining StockCharts.com as a member, now is the best time to do it, period.   If you are already a member and your membership expires anytime before the end of 2012, go ahead and renew now to lock in the special rate.  Long-time members will tell you again and again: "Renew whenever they have a special running."  Don't wait however - the special is scheduled to end before the next newsletter goes out.  Go ahead and take advantage of it right now.

Secondly, I urge you not to fall into the old trap of "The market is headed lower so I don't need to watch it now.  I'll wait until it turns around and then I'll get more involved."  That is the exact opposite of the mindset that the charting pros have.  Even if you only want to play the long side of things, it is critical to pay attention to the technical condition of the market as it declines because the technicals will tell you when the bulls are coming back long before "the mainstream financial press" or "conventional wisdom" will.  Stay alert during this decline by using things like the Bullish Percent Indexes that I talked about last time as your guide.

OK, let's see what John, Arthur, Carl, Richard and Tom have to say...

Take care everyone!
- Chip 

Hello Fellow ChartWatchers!

Did you follow the Facebook mania yesterday?  Even if you didn't have a stake in the stock, it was still fascinating to watch the chart over the course of the day as the underwriters had to step in to prop it up.  I've added a snapshot chart of the first day's action (appropriately enough) to our Facebook page.  Click here to check it out (no, you don't need to be a Facebook member to see it).

While the mass media has been focused on Facebook, something much more significant happened on Friday with respect to the Dow Theory.  Arthur Hill's article in this week's newsletter has all the details but suffice it to say that the market is looking very weak these days.

BULLISH PERCENT INDEX LED MARKETS LOWER

While the charts are looking very weak right now, were there any signals earlier that clearly pointed to this downward leg in the markets ahead of time?  Check out this chart:

(Click here for a live version.)

This chart shows my favorite market indicator, the NYSE Bullish Percent Index ($BPNYA).  The Bullish Percent Index shows the percentage of NYSE stocks that have any type of bullish pattern on their P&F chart.  (For all the gory details, click here.)  The NYSE Bullish Percent Index peaked at the end of February (blue verical line) well before the markets showed any outward signs of weakness.  $BPNYA put in a lower peak on March 20th (solid red line) again, well before the market indexes topped.  In fact, by the time the market indexes started moving lower, $BPNYA was putting in a third lower peak (red dashed line) and had formed a confirmed downtrend.

People often ask is there is a leading indicator for the market.  My answer is always for people to watch the Bullish Percent Index.  The chart above is a perfect example of why everyone should pay attention to it at all times.

- Chip Anderson

P.S. If you want to learn more about the "hidden gems" like the Bullish Percent Index that we have here at StockCharts, conside coming to our upcoming users conference called "ChartCon" that's being held in Seattle on August 10th and 11th.  For more details, click here.  I hope to see you there!

Hello Fellow ChartWatchers!

One of the big benefits of becoming a StockCharts member is the ability to access additional charting options.  Today I want to show you how the "Advanced Options" section of the "Indicators" area allows you to add a "Signal Line" to any technical indicator.

A Signal Line is a (typically) short-term moving average of an indicator that can be used to create buy or sell signals.  One of the most well-known signal lines is the one that automatically comes with the MACD indicator:

The red line on the chart above is the MACD signal line.  That signal line is so well known that the MACD also includes a histogram that shows its distance away from the MACD Line.

But what if we wanted to see a signal line for a different oscillator, like the Chaikin Money Flow?  Most oscillators do not have built in signal lines however, by using the "Advanced Options" section of the "Indicators" area on the SharpCharts workbench, members can add their own.  Here's an example:

(Click here for an updated, live version of this chart)

So here we have a daily chart of Microsoft (from last March) with a 60-day Chaikin Money Flow indicator added to the bottom.  By opening up the "Advanced Options" section and selecting "Exponential Mov. Avg" from the "Overlay" dropdown in that section, we've created the blue line that you see on top of the CMF.  That blue line is our CMF signal line.  When the CMF is above the blue line, it is bullish.  When it is below, it is bearish.

EMA's are commonly used for signal lines because they are more sensitive to change however could also be used instead.  In addition, while short periods like 9 are also common, you can actually use any period you want depending on your trading style (and I encourage you to experiment with these settings).

- Chip

Hello Fellow ChartWatchers!

Spring has finally sprung here in the Pacific Northwest and we are very glad that it has.  I hope the weather is as nice where you are as it is here.  This edition of ChartWatchers contains some great articles - not all of them quite so sunny.  John Murphy points out that the sector rotation picture is changing and may have "regressed" somewhat in recent weeks.  Arthur Hill looks at the picture for Energy stocks, Carl Swenlin talks about the differences between SPY and $SPX, and Tom Bowley examines the influence that Market Makers have on options expiration day.

And me?  I'm going to point out a simple change you can make to your charts that can speed things up - possibly dramatically.

DENSE GRID SETTINGS CONSIDERED HARMFUL

Most of us don't pay any attention to the Grid settings for our charts.  Members have the ability to change the number of grid lines that appear on their charts using the "Advanced Settings" controls in the "Chart Attributes" area of the SharpCharts Workbench.  Most people are content to use the "Normal" grid settings which looks like this:

There are two other grid settings that are available however.  Here's what the "Dense" grid setting looks like:

And here is what the "Off" setting looks like:

Now, deciding which of these settings to use is actually a little trickier than you might think at first glance.  The reason is that the grid setting can have a very big impact on the size of the chart - not the screen size, but the amount of data that needs to be sent accross the Internet in order for you to see the chart.

Here are the statistics for the simple charts you see above:

• Normal Grid: 12,090 bytes
• Dense Grid:   12,680 bytes
• Grid Off:       10,361 bytes

That may not seem like a big difference - and with such a small, simple chart, it isn't - but even in this case, the chart without a grid is 18% smaller than the chart with a dense grid.

If you use charts that are much larger, say something with a size of 1280 and 4 additional indicator panels, the difference is more significant.  Here are the statistics in that case:

• Normal Grid: 83,766 bytes
• Dense Grid:   89,678 bytes
• Grid Off:       65,963 bytes

That's a 26% difference between the size of a chart with a Dense grid and the size of a chart with no grid at all.  If your Internet connection is not superfast or you are downloading lots of charts, that different will be noticeable.

Now, of course download speed is only one factor to consider when choosing a grid setting.  But I wanted to make sure that it was something that you did consider.  From time-to-time we have people write in to our support team asking why our site is so slow and it turns out that they recently turned on the Dense Grid setting.  The bottom line here is that if you can live with the grid Off on your charts, you will see a noticeable speed improvement especially if you have large charts or a slow Internet connection.

- Chip

P.S. In case you were wondering, the name of this article is a take-off on a famous letter from the early days of computer programming.