July TRADERS' TIPS

Here is this month's selection of Traders' Tips, contributed by various developers of technical analysis software to help readers more easily implement some of the strategies presented in this issue. This month's tips include formulas and programs for:
METASTOCK FOR WINDOWS,
WAVE WI$E MARKET SPREADSHEET, and
SMARTRADER
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METASTOCK FOR WINDOWS

Here's how to implement the alpha indicator using bonds and the Fidelity Select Chemical Fund as described in Frank Ritchie's article, "An alpha indicator for bonds." First, open charts of Treasury bonds and the Fidelity Select Chemical Fund (FSCHX) and choose Tile from the Window menu so that both charts are visible. Drag the price plot from the FSCHX chart and drop it on the heading of the T-bond chart. The T-bond chart should now have one inner window with T-bonds and another inner window with the Fidelity Select Chemical Fund. Now, enter the following formula in the Indicator Builder:
Mov((Sum(Log(C / Ref(C,-1)),9) - (((9*Sum(Log(C / Ref(C,-1)) * Log(P / Ref(P,-1)),9)) - (Sum(Log(C / Ref(C,-1)),9) * Sum(Log(P / Ref(P,-1)) ,9))) / ((9*Sum(Pwr(Log(P / Ref(P,-1)),2),9)) - Pwr(Sum(Log(P / Ref(P,-1)),9),2)) * Sum(Log(P / Ref(P,-1)),9))) /9,12,SIMPLE)
Drag this indicator from the Indicator QuickList and continue holding your mouse button down. Position the mouse pointer over the FSCHX price plot located in the T-bond chart. When the mouse pointer is positioned correctly, the price plot of FSCHX will become highlighted. Next, release the mouse button to plot the indicator, and choose Overlay without Scale when the Scaling Options dialog appears.
To display the alpha indicator in its own inner window, you can either drag the indicator and drop it on the heading of the T-bond chart or you can delete the FSCHX price plot. Deleting the FSCHX price plot will not affect the result of the alpha indicator in any way.
These steps only need to be completed once; MetaStock for Windows' SmartCharts feature will remember the calculation and update the chart automatically each time you update your data. The formula listed above is available at our Web site, www.equis.com.
Allen McNichol, EQUIS International

WAVE WI$E MARKET SPREADSHEET

Here are the formulas for implementing Dennis Meyers's A/D volume, new-high, new-low market system:





A: Date      'Read DOW JONES data 
B: DJI 
C: Date      'Read S & P data 
D: SP500 
E: ADVV      'Read advancing volume data 
F: DECV      'Read declining volume data 
G: NH        'Read new highs data 
H: NL        'Read new lows data 
I: Vdays     10 
J: Vratio    (ADVV-DECV) / (ADVV+DECV) 
K: XVratio   @EAVG1(VRATIO,Vdays) 
L: Above     XVRATIO-@MIN(XVRATIO,Vdays) 
M: Range     @MAX(XVRATIO,Vdays)-@MIN(XVRATIO,Vdays) 
N: Vstr      100*(ABOVE/RANGE)-50 
O: DJstr     100*(DJI-@MIN(DJI,Vdays))/(@MAX(DJI,Vdays)-
             @MIN(DJI,Vdays)) -50 
P: Vrs       VSTR-DJSTR 
Q: XNH       @EAVG1(NH,3) 
R: XNL       @EAVG1(NL,3) 
S: Hdays     10 
T: NHstr     100*(XNH-@MIN(XNH,Hdays))/(@MAX(XNH,Hdays)-
             @MIN(XNH,Hdays)) -50 
U: Ldays     40 
V: NLstr     100*(XNL-@MIN(XNL,Ldays))/(@MAX(XNL,Ldays)-
             @MIN(XNL,Ldays)) -50 
W: Buys      @SIGNAL(SP500,BUY,VRS>=5 & NLSTR<=-20 & 
             NHSTR>=-10,VRS<=-35 & NLSTR>=30 & NHSTR<=-20) 
X : 
Y: Sells     @SIGNAL(SP500,SELL,VRS<=-35 & NLSTR>=30 & 
             NHSTR<=-20,VRS>=5 & NLSTR<=-20 & NHSTR>=-10)

Peter Di Girolamo, Jerome Technology

SmarTrader

Figure 1: SmarTrader. Here are the values and formulas for using SmarTrader.
Construction of Dennis Meyers's advance-decline volume system is easily reproduced with SMARTrader (Figure 1). Since most data vendors transmit advance-decline data as standard price fields, rows 17 and 18 are user rows to equate the appropriate price fields to the names used in the formulas, ADV-VOL and DEC _VOL. Row 19 is a user formula to calculate the Vratio. XVratio is a 10-period exponential moving average (EMA) of Vratio. Rows 21 and 22 apply the highest and lowest math functions to XVratio for a 10-period lookback. The next three rows are user rows to calculate the Vstr. Next, we apply highest/lowest to the close of DJIA (Close2) with a 10-period lookback. The last two user rows calculate the DJstr and Vrs.
As Meyers's article points out, the NHs and NLs indicators are calculated using the same formulas as the Vstr and DJstr but will be smoothed with a three-period EMA. This system can be implemented in SNAP using the exact same structure.
Jim Ritter, Stratagem International

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