StockCharts Blogs - MailBag

How can I count up days versus down days for a stock?

StockCharts.com users can employ MarketCarpets to see the number of up or down days for S&P 500 stocks within a particular period. The example below shows the S&P Sector MarketCarpet with stocks grouped by sector. There is a drop down menu in the upper left corner, just below “current view”. Choose “up and down days” to see the net up days for a period (up days less down days). Next, extend the slider at the bottom to the desired number of days. Left click the left edge of the slider and drag it to extend.


Click this image for a live version.

This MarketCarpet covers the month of May, which, as the sea of red reflects, has been mostly down. Users can hover over the MarketCarpet, right click the mouse and choose “show values” to see each stock’s value. A value of -12 indicates that the stock has been down all 12 days. Note that 13 days refers to 12 price changes. The energy, finance, industrials and materials sectors have the most red squares. Believe it or not, there are a few stocks with positive readings. These isolated green squares can be found mostly in the utility, consumer staples and healthcare sectors.  

Where can I find really long-term charts?

The Historical Chart Gallery at StockCharts.com contains long-term charts for the Dow, S&P 500, Nasdaq, gold and 30-Year US Treasury Bond. The Dow chart goes back to 1900, the S&P 500 extends back to 1960 and the Nasdaq chart starts in 1978. The 1900 Dow chart is especially fascinating for studying the 1929 crash and its aftermath, while the S&P 500 sports a long consolidation from the late 60s to 1980.


Click this image for the complete chart


Click this image for the complete chart

Chartists can also see 20 years worth of data for many key indices and stocks. These include Spot Gold ($GOLD), the CRB Index ($CRB) and the S&P 500 as well stocks like Microsoft (MSFT), Apple (AAPL) and Exxon Mobil.


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How can I drill down into sectors to see the different industry groups and stocks?

The Sector Summary at StockCharts.com provides chartists the means to gauge sector performance and then drill down into their preferred sector. Links to the Sector Summary can be found on the Home page (just under the Today in the Market chart) or on the Free Charts page (in the right navigation under Other Tools). Users can also click the chart below to reach the sector summary. Each image below shows clues on how to navigate this tool.

The Sector Summary starts with nine sectors. Users can choose the performance timeframe with the drop down menu at the top. Once a sector has caught your eye, users can click on the sector name to see the industry groups within.

This next image shows the industry groups in the technology sector. Notice the icons to the left of each symbol. Users can click on the respective icons to see a SharpChart, Gallery Chart, Point & Figure Chart, Market Carpet or PerfChart related to this industry group. Users can also click the name to see a list of stocks that make up the industry group.

The image above shows the first 10 stocks in the internet group. Again, users can change the timeframe with the drop down box at the top. Users can also sort by the various columns to see the best performing stocks, worst performing stocks or sort by alphabet. The Sector Summary is a great way to find the best stocks in the best industry groups in the best sectors.

What indicators can I use to set a stop-loss?

SharpCharts has several indicators that can be use to set stops. Wells Wilder, creator of RSI and the Average Directional Index (ADX), developed two indicators that can be used to set stops: the Parabolic SAR and Average True Range (ATR). Parabolic SAR is a stop-and-reverse system that adjusts as prices change direction. It is below prices in an uptrend and above prices in a downtrend. More importantly, it trails prices as the trend unfolds. This means it can be used to consistently raise stops as an uptrend extends and lower stops as a downtrend extends.


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The next two indicators measure price volatility, which means they can be used to calculate a volatility-based stop. The Average True Range (ATR) uses the previous close, current open and high-low range to calculate volatility. The Standard Deviation is used in statistics to measure the degree of variability in a data series (closing prices in this case). Chartists can use the absolute values to set stops or a multiple of these values. For example, a stop-loss could be set 2 standard deviations below current prices. As with all indicators, users should experiment with different parameters to find those that best suit their trading preferences and the characteristics of the underlying security.

How can I rank the S&P Sector SPDRs for a Relative Strength Strategy?

Chartists can use PerfCharts to rank relative strength for the nine sector SPDRs over various timeframes. The percentage change shown on this PerfChart is the amount of over or under performance relative to the S&P 500. This is not the absolute performance. 200-days is default setting, but users can quickly change this with the slider at the bottom. Right click on the slide to see the different timeframes or left click/hold on the edge and drag the slider to manually adjust the timeframe. Also note that the entire slider can be moved by clicking/holding in the middle and dragging.

Click this image for a live chart. 

The second PerfChart shows sector relative performance for the three month period extending from early March 2011 to early June 2011, which is basically the second quarter of 2011. Notice that the three defensive sectors were showing relative strength and outperforming the S&P 500. The finance sector was showing relative weakness and underperforming the S&P 500. Relative strength in these defensive sectors foreshadowed the steep market decline from late July to early August.

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Where can I find great scans and learn to write my own scan code?

StockCharts.com users can find dozens of great scans from the Advanced Scan Library. This is a collection of scans divided into four groups: samples scans, predefined scans, published scans and user-contributed scans. Chartists can use these scans as they are or learn from the code to create their own unique scans.

Sample Scans provide relatively easy examples to learn how to write scans. Users can learn how to define a bullish golden cross, overbought readings in RSI or limit the results to one sector.

Predefined Scans cover dozens of basic technical expressions, such as bearish or bullish engulfing, 52-week high or low and MACD signal line crossovers.

Published Scans are based on trading strategies put forth by great traders in books, magazines or websites. These complex scans include Tom DeMark’s Sequential, Gary Smith’s Classic Long and Jeff Cooper's Lizard Tail Buy Signal.

User-Contributed Scans are based on scans submitted by Chartists at StockCharts.com.

The code shown on these pages can be copied and placed into the advanced scan workbench, which is available to Extra! Subscribers.

What is a Throwback?

A throwback is a counter trend move that occurs after a resistance or support break. A bullish throwback evolves after a resistance break as a pullback to broken resistance, which turns into support. A bearish throwback forms after a support break as an oversold bounce back to broken support, which turns into resistance.


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The first example shows Autodesk (ADSK) with a bullish throwback after a resistance break. Notice how the stock broke resistance with a high volume surge. Broken resistance around 35 then turned into support and the stock declined below 36 in early March. After this throwback, the rally continued with another high volume breakout.


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The second example shows Allegheny Technologies (ATI) breaking support in February and broken support turning into resistance in March. The throwback bounce failed around 44 as the Stochastic Oscillator peaked below 80 and moved below its signal line.

How can I show interest rates using one scale?

SharpCharts users can use the “Price (same scale)” feature to shows different securities on one scale. This works best for securities that are based on the same scale, such as interest rates or the Bullish Percent Indices. The chart below shows five different US treasury yields on the same scale, which ranges from 0 to 3.5%. As expected, the 10-year Treasury Yield ($UST10Y) has the highest yield, while the 3-month Treasury Yield ($UST3M) has the lowest. Also notice how the yields get progressively higher as the maturity increases.


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Click “continue reading” to see a table with the treasury yield symbols available at StockCharts.com.

How can I follow commodities at StockCharts.com?

Chartists can follow commodities using ETFs/ETNs, spot prices or special indices. Spot prices, which represent the “real McCoy”, are clearly the purest way to follow a commodity. ETFs and ETNs can be good trading vehicles, but some have serious drawbacks, especially over the long-term. ETFs and ETNs backed by the physical commodity, such as the Gold SPDR (GLD), track the price of gold quite well. ETFs and ETNs composed of futures contracts, such as the US Natural Gas Fund (UNG), do not track the underlying commodity so well. It is, therefore, advisable to check on the underlying commodity and the composition of the ETF/ETN when investing in these securities. There are also many commodity-related indices from Dow Jones-UBS. These track the underlying commodity or commodity group quite well and there are even some iPath ETNs based on these indices.


Click this image to see the symbol catalog.

It all starts with the symbol catalog, which is accessible from a link at the top of each web page. Click the link and then enter a specific search term. StockCharts.com users can find symbols for the three commodity groups using the terms below (without quotation marks):

The term “spot price” will return 20 different spot price symbols.
The term “ipath dow” will return a list of the iPath commodity ETNs.
The term “$DJA” will return all of the Dow Jones-UBS commodity-related indices


Click this image to see the symbol catalog.

What Exactly is the %B Inidcator?

%B reflects the location of the closing price relative to the Bollinger Bands. A %B reading below zero means price closed below the lower Band. A %B above 1 means price closed above the upper band. In this manner, %B can be used in scans to identify securities that have recently broken a Bollinger Band. %B readings between .80 and 1 suggest that prices are near the upper band, while %B readings between .20 and 0 indicate that prices are near the lower band.


Click this image for a live chart.

The chart above shows the Dow Industrials with narrowing Bollinger Bands in early March. After a brief close below the lower band, the Dow immediately recovered and moved above its upper band this week. Notice that %B dipped below 0 last week, crossed above .50 last Friday and exceeded 1 with Wednesday’s surge.

Bollinger Bands are set two standard deviations above and below the 20-day SMA. This means the 20-day SMA is the centerline or middle band. As far as %B is concerned, a move above .50 (centerline) signals a break above the 20-day SMA, while a move below .50 signals a break below the 20-day SMA. %B typically remains above .50 during strong uptrends, as it did from 20-Dec to 5-Mar on the Dow chart. You can read more on %B in our ChartSchool.