Above are few distribution charts that some financial analysts borrow from statisticians. Usually, it is shown as a monthly, quarterly or yearly chart to describe the market performance over the state periods in terms of it percentage changes. So, it is purely a statistic chart and has not much meaning for trading purposes. For example, as shown in the chart, that a stock "WXYZ" is out perform the market over the last period of time, but it does not show the momentum and trending direction it is continue to move.
The following chart with New indicators - The Moving Distribution Curves, show a NEW way to trade the market. Take for example, the following chart shows the XLE - Energy Sector ETF. It's short term Momentum, mid-term Swing and long-term Trend are benchmarked within the whole database (in this case, all ETFs except leveraged ETFs).
The Brownline show the Current Ticker Relative Strength, in this case is XLE, against all other ETFs in the database. The Blackline shows the Market Reference Relative Strength, in this case is SPY (S&P500). And, the Greyline shows the unchanged USD1 Cash Reference Relative Strength.
See... In Bull market, stocks go up and cash reference line move down. And, in Bear market, stocks go down and cash reference line move up.
The following chart with New indicators - The Moving Distribution Curves, show a NEW way to trade the market. Take for example, the following chart shows the XLE - Energy Sector ETF. It's short term Momentum, mid-term Swing and long-term Trend are benchmarked within the whole database (in this case, all ETFs except leveraged ETFs).
The Brownline show the Current Ticker Relative Strength, in this case is XLE, against all other ETFs in the database. The Blackline shows the Market Reference Relative Strength, in this case is SPY (S&P500). And, the Greyline shows the unchanged USD1 Cash Reference Relative Strength.
See... In Bull market, stocks go up and cash reference line move down. And, in Bear market, stocks go down and cash reference line move up.
Now, here is a better way to interpret the three color lines in the follow chart. It shows the same chart, and added the distribution chart on the indicators. View it as the ditribution charts are moving under the price chart over time, the Brownline shows the the ticker percentile in the database at the point of time. One would like to BUY the ticker with 1, Stronger than the market reference, and 2, above 80 percentile. Similar interpretation goes with the Blackline and Greyline.
See. Stocks/ETFs don't move randomly... if there is no special demand, it would not move above the 80 percentile. Similarly, if without special supply, it would not move below the 20% either.
Attached are just a few more daily chart with Moving Distribution Curve as examples: KOL, SLV, BRK-A, GLD and QQQ.
KOL
SLV
BRK-A
GLD
QQQ (Daily)
Attached are some Weekly Chart examples on: QQQ and BAL.
QQQ(Weekly)
BAL(Weekly)
Note:
* All the Charts can be Zoom to fit in 24 inch monitor for clearer display.
* The distribution shape illustrated here is for explanation purposes only, as the stock distribution over time does not necessary fit into this kind of shapes and varies over time. And, some one had recommended me to see this article: http://hanwangquant.blogspot.sg/2011/09/
And, I found that it helps to explain this concept, and also can be easily implemented in the moving distribution curve.
* This is a new kind of Market Breadth Indicator can be applied on single stock or ETF.
* At any one time, there are tickers fill up the full range from 0 to 100. Choose to long or short according to th reference line position to have the edge.
* A much better way to "occupy the Wall Street" is to have the public to understand exactly how the game is played.
* All the Charts can be Zoom to fit in 24 inch monitor for clearer display.
* The distribution shape illustrated here is for explanation purposes only, as the stock distribution over time does not necessary fit into this kind of shapes and varies over time. And, some one had recommended me to see this article: http://hanwangquant.blogspot.sg/2011/09/
And, I found that it helps to explain this concept, and also can be easily implemented in the moving distribution curve.
* This is a new kind of Market Breadth Indicator can be applied on single stock or ETF.
* At any one time, there are tickers fill up the full range from 0 to 100. Choose to long or short according to th reference line position to have the edge.
* A much better way to "occupy the Wall Street" is to have the public to understand exactly how the game is played.
"Man belongs wherever man wants to go.
He goes where his vision is!"
- Joseph Murphy
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