That action was certainly odd. At worse you would have had a wash trade if you'd entered at 10am on a prorata basis using that trailing loss (entry around 23.35, stop loss at 23.30, 5% off high of 24.60.) That sort of action smells of rampid manipulation, really wonder what Jack would have to see about a chart like that and if he would remove a stock for action like that. There's no candle like that on the chart, and furthermore that's the kind of candle you only see on extremely volatile no-volume stocks. I noticed you had a chart with those DU formulas - do you have a completed Wealthscript that produces all three? Not a script expert, and haven't managed to do anything with them.
I have compiled several methods into one Chart Script, but have yet to complete the process. I still need to output the information to a new pane, rather than the main 'chart' window pane in order to avoid cluttering the chart. So far, I have been unable to accomplish this goal after numerous attempts. In addition, much of the work is based on what others have either sent me via email, posted to this journal or published on the Wealth-Lab.com Web Site. As a result, I have had some difficulty getting the Dry Up Volume results to mirror what I have done manually. - Spydertrader
2005-03-09, Wednesday - Update Our system triggered another signal today, when actual volume for SNDA exceeded calculated DU Volume for both the DU5 & DU10 methods of Dry Up Volume calculation. Unfortunately, price ($31.97, down $2.08 from the previous day close), MACD (-.2312) and The Stochastic Indicator (10.8789) each fell outside our desired parameters. As a result, I take no action either long or short with respect to SNDA. - Spydertrader
Hello Spydertrader, Reviewing the charts of the watchlist stocks I can only say the majority look, in simple terms, fugly! How can these stocks such as TASR, FRD, SYNA, SNDA, CALM meet the criteria of RS >90 or be included in the watchlist after such horrendous breakdowns on the daily charts? From reading the Hershey threads, I presume we would ideally like stocks that cycle 20+% 5 times in 6 months AND are in a sustained uptrend. Finding such stocks late in the bull cycle may be difficult without relaxing some criteria. Otherwise why not just look at liquid high beta stocks and perform the Hershey magic on these regardless of eps or rs rank since what may really be needed for this to work are stocks that move aggressively one way or the other. Not suggesting this by the way. One more question for you. In selecting the zeros from the stocktables.com sort you select 10 centered on the zero level for Volume percent change however JH's method was to select the zeros by continuing up from the ones list at the bottom of the sort. Not that it makes any difference. Just trying to understand your method and reasoning behind it. For all I know JH changed his method in later posts and I just haven't gotten that far yet. Thank you.
The stocks you mention above may no longer have an EPS or RS Ranking above 90, but they have made their way into the "Final Universe List. This list comprised of mostly tenured stocks contains many stocks that no longer meet the strict hershey criteria of EPS & RS, but do pass all other tests (EPS, Avg Volume, Rank, etc.) Each stock in the Final Universe List, at one time in the past, made it onto a daily "Hotlist," and as a result, into the Final Universe List. Removal from the Final Universe list only occurs when a stock fails to create a profitable trade and fails to measure up in terms of float, EPS, or Average Volume. I create my daily Watch List from the combination of stocks in the Daily Hotlist and Final Universe List, that due to their volume levels, find themselves in one form of Dry Up or another. A few of the individuals that have shared their methods with the journal do use similar methods to those you suggested above. From what I understand, they experience good results. My understnading of the rationale behind the RS & EPS culling method involves the reduction of risk. According to Jack Hershey, seeking only the highest quality stocks as a base for our methodology reduces overall risk. For me, the trade-off between reduced risk and reduced profits remains one with which I am comfortable. While other methods of choosing stocks might improve profits, they carry with them an increased inherent risk. Since protecting my initial capital remains my top priority, the methods I use fit my personality quite well. Others with more risk tolerance, might prefer different methods and experience a high level of success using those methods. Neither method is 'more' correct over another. The choice remains one of personal preference. To tell you the truth, so much time has passed since I started culling in this fashion, I cannot recall where or when the change occurred. If memory serves, DKM may have posted a summery on the MSN web site, but I cannot recall for sure. For all I know, Jack may have spoken of it in the Paltalk Chat Room, and I simply made note of the change and moved on. I recall much debate about the disconnect between the Stocktables.com list scores (sevens - ones - zeros) and the actual scores for the stocks. Manually calculating the 'scores' for each stock rarely matched with the stock's "List" score. From this I determined that teaching the stocktable.com method vs. teaching his tc2000 method made it easier for Jack to keep everyone on the same page while attempting to impart the spirit of his trading technique. As a result, I have used the methods outlined in the journal and achieved a certain level of profitability. While I have yet to achieve the level of success experienced by Mr. Hershey, I continually test a variety of methods in an attempt to improve my overall results. To this end, the test culling list I post daily only contains stocks that meet every Jack Hershey fundamental Criteria - including RS and EPS rank greater than 90. I hope to add to this list a theory that Dry Up Volume exists in a range rather than an absolute number. I hope to determine if altering the methodology in this fashion brings me closer to achieving the spirit of Jack's teachings and his level of success. I appreciate your suggestions above, and hope my answers helped to explain any confusion resulting from the methods I use. When time permits, I will attempt to test your suggestions to determine how using your suggestions might alter my equity curve. Thanks again for your input and for the contributions you have made to the journal. - Spydertrader
Outstanding results in the recent journal you posted Spyder. Well done. One qu: It seems four out of the eighteen profitable trades hit the profit target. Could you please remind me how you chose to exit the others? Is it an intraday decline in volume and/or price, or an EOD signal, or a technical indicator? Or did they all hit the four day time stop? Thanks
Many of the stocks hit the four day time stop. Others triggered the trailing stop loss after an intraday price reversal (Keep in mind, I raise the initial 5% stop loss up in parallel with price). In addition, I occasionally tested the theory of selling half the holdings when price reached a 5% gain - holding onto the remaining shares. Although I experienced a loss on one trade that would have been a winner had I used the selling half the holdings rule, this strategy failed to improve my overall results, and had the net effect of selling winners too early. With a few of the trades, I tested a MACD crossover exit strategy, and as a result, exited way too early. I no longer use the MACD Crossover as an exit strategy, nor the selling half the holdings exit strategy. Some of the wash trades resulted from a failed breakout - failure of volume to exceed FRV status by EOD - and resulted in a slight profit after selling just before the close on the day the stocks were purchased. Presently, I hope to develop an exit strategy that uses volume and price to exit (in a similar fashion to how we use volume and price to enter a trade), but have yet to work out all the particulars. I hope you find the above information useful. - Spydertrader
2005-03-10, Thursday - Lists I used RS and EPS Settings of 90 for the following lists Stocktables.com Sevens - Ones - Zeros ELOS - ANTP - TOPT MDRX - FLSH - URBN BUCY - LCAV - AAPL STNR - WWCA - NSS WLK - MIPS - HANS PTRY - CCJ - PTRY ---- - MFLX - LSS ---- - JLG - PMTI ---- - CTSH - XPRSA ---- - HLIT - POG Wealth-Lab Chartscript/Manual Hotlist ANTP ELOS MFLX MIPS TOPT HANS Wealth-Lab Data/Yahoo Data Watch List TASR - DU Cycle FRD - DU Cycle COGT - DU Cycle - DU5 - DU10 - DU20 MFLX - DU Cycle SIGM - DU Cycle SGTL - DU Cycle ULBI - DU Cycle CALM - DU Cycle ISSC - DU Cycle - DU5 - DU10 - DU20 Wealth-Lab Developer Data & Equations/G33M4K Equations SRVZ Wealth Lab Equations - Dry Up (with G33M4K Score) SINA - 0 SYNA - 2 Eyeball Gallas2 "Keep an Eye on These" Stocks MFLX (Attached) Yahoo Data/G33M4K Equations Dry Up Stocks with G33M4K Master List Score of Zero FRD SIGM ISSC Stocktables Sort/Qcharts/G33M4K Equations/ Test Culling Method with Score Hotlist TRGL 0 MFLX 1 TOPT 1 EZPW 2 HANS 2 KEYW 2 MIPS 2 PMTI 2 ELOS 6 ANTP failed to make the Final Universe List due to insufficient float. <img src=http://www.elitetrader.com/vb/attachment.php?s=&postid=702381>
2005-03-10, Thursday - Update Our system triggered another signal today at 10:28 AM, when actual volume for SIGM exceeded the pro-rata calculated DU Volume for both the DU Cycle method of Dry Up Volume calculation. Unfortunately, price ($9.60, down .93 from the previous day close), MACD (-.0086) and The Stochastic Indicator (3.1005) each fell outside our desired parameters. As a result, I take no action either long or short with respect to SIGM. - Spydertrader
2005-03-11, Friday - Lists I used RS and EPS Settings of 90 for the following lists Stocktables.com Sevens - Ones - Zeros KEYW - HLIT - ISRG MDRX - WWCA - JOYG HOLX - LCAV - PMTI WCC - EZPW - VTIV VTIV - ANTP - HANS DTPI - AAPL - LSS MRVL - CTSH - MHR Wealth-Lab Chartscript/Manual Hotlist ANTP EZPW HANS Wealth-Lab Data/Yahoo Data Watch List TASR - DU Cycle SYNA - DU Cycle COGT - DU Cycle - DU5 - DU10 MFLX - DU Cycle - DU5 BCSI - DU Cycle MIPS - DU Cycle - DU5 JUPM - DU Cycle SINA - DU Cycle - DU5 - DU10 FFIV - DU Cycle CALM - DU Cycle ULBI - DU Cycle Wealth-Lab Developer Data & Equations/G33M4K Equations SRVZ Wealth Lab Equations - Dry Up (with G33M4K Score) SYNA - 0 Eyeball Gallas2 "Keep an Eye on These" Stocks HANS (Attached) Yahoo Data/G33M4K Equations Dry Up Stocks with G33M4K Master List Score of Zero TASR SYNA JUPM FFIV Stocktables Sort/Qcharts/G33M4K Equations/ Test Culling Method with Score Hotlist ELOS 0 HANS 0 MFLX 1 MIPS 1 KEYW 2 PMTI 2 TRGL 2 EZPW 5 ANTP failed to make the Final Universe List due to insufficient float. <img src=http://www.elitetrader.com/vb/attachment.php?s=&postid=703107>