December 2006 Letters To The Editor

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The editors of S&C invite readers to submit their opinions and information on subjects relating to technical analysis and this magazine. This column is our means of communication with our readers. Is there something you would like to know more (or less) about? Tell us about it. Without a source of new ideas and subjects coming from our readers, this magazine would not exist.

Address your correspondence to: Editor, STOCKS & COMMODITIES, 4757 California Ave. SW, Seattle, WA 98116-4499, or E-mail to editor@traders.com. All letters become the property of Technical Analysis, Inc. Letter-writers must include their full name and address for verification. Letters may be edited for length or clarity. The opinions expressed in this column do not necessarily represent those of the magazine. -Editor

TECHNICAL ANALYSIS ORGANIZATIONS

Editor,

In the Letters To S&C section of your September 2006 issue, you listed two organizations that are associated with technical analysis. However, you left one out: the American Association of Professional Technical Analysts (AAPTA). Information about AAPTA may be found at www.aapta.us.
David Steckler
President, American Association of
Professional Technical Analysts

Thank you for sharing this information. --Editor

MODELING THE MARKET FOLLOWUP

Editor,

Regarding the following formula given in the letter by Ken Kesler in your October 2006 issue, in the second line of MetaStock code:

 EMM:=TL+SHP;

where does the "TL" come from?
Bill

Ken Kesler replies:

Here is the complete MetaStock code. Sorry for any confusion.
  

.5;0;-.5;
{TREND LINE}
LEN:=Input("TREND LENGTH",0,10000,30);
SMA:=Mov(C,LEN,S);
SL:=C-Ref(C,-(LEN-1));
SSL:=(SL+(2*Ref(SL,-1))+(2*Ref(SL,-2))+Ref(SL,-3))/6;
TL:=SMA+(.5*SSL);
{TL;}
 
{CYCLE}
A:=1-(Sin(360/LEN))/Cos(360/LEN);
HP:=(.5*(1+A)*(C-Ref(C,-1)))+(A*PREV);
SHP:=(HP+(2*Ref(HP,-1))+(2*Ref(HP,-2))+Ref(HP,-3))/6;
{SHP;}
 
{MODEL}
EMM:=TL+SHP;
{EMM;}
 
{NORMALIZATION}
PH:= HHV(EMM,LEN);
PL:=LLV(EMM,LEN);
PF:=10/(PH-PL);
V1:=((EMM-PL)*PF)-5;
{INVERSE FISHER TRANSFORM}
IF1:=(Exp(2*V1/100)-1)/(Exp(2*V1/100)+1);
IF2:=IF1/HHV(Abs(IF1),LEN);
IF2;
TS1:=TSF(IF2,LEN/4);;
TS1;
TS2:=TSF(IF2,LEN);
TS2;


CODE IN SPREADSHEET LANGUAGE?

Editor,

When an article shows promise, it tells how to implement a technique in either TradeStation, MetaStock, or some other commercial technical analysis program instead of in a spreadsheet program such as Lotus 1-2-3 or Excel, which I have. I get frustrated with that, so your magazine is useless to me! When your articles can offer code in the software I have, I shall be glad to resubscribe.

Howard Fink

Since most of our authors use commercial technical analysis programs for their analytical work, when they submit articles to us, they include systems or techniques using whatever product they use. Further, most of the trading systems our authors write about can be easily adapted to other commercial technical analysis programs. We often include these adaptations in our Traders' Tips section.

While many commercial technical analysis program developers are willing to work with us to adapt techniques to their software, the developers of general-office spreadsheet software are not. Thus, we would not be able to send a copy of a trading system to a spreadsheet or general-office software developer and request a customized spreadsheet. We also are not staffed to create customized spreadsheets for every technique. Finally, some of the systems our authors discuss are too sophisticated to recreate in a spreadsheet format.

We suggest checking online message boards, bulletin-boards, or online user groups for people who are familiar with developing customized spreadsheets. They may be able to help. -Editor

LSS OSCILLATOR

Editor,

Where can I find information on the LSS oscillator?
Carmen Bianco

Sorry, we have not published any articles on the LSS oscillator, but an Internet search could yield some results. -Editor

PORTABLE ELECTRONIC DEVICES FOR TRADERS?

Editor,

Traders who travel or are away from their home computers during the trading day need a better way to get market quotes and make trades using the Internet.

Can you direct me to any past articles that help readers determine which cell phones or electronic devices work best for traders using the Internet on the go?

If not, please consider assigning a writer to research the various phones or other electronic devices that can access the Internet for active traders away from home. In addition, it would help to know which Internet service providers had the best (most reasonable) plans for those phones or devices.

Using a laptop computer on the go requires finding hot spots that provide Internet access, and payment methods are inconvenient. A cell phone with Internet access provides the most freedom, usable wherever the phone can operate, but the plans can be costly. Can you help traders find the best ways to trade while on the go?

Larry W. Campbell
Sacramento, CA

A Pocket PC, Palm, or BlackBerry would work. You just have to have the service. We have reviewed QuoTrek from eSignal in the past, which you'll find in our article archives. You can visit QuoTrek's website for more information about their products at www.Quotrek.com. An Internet search for wireless trading services is likely to turn up additional services to investigate. -Editor

USING THE COMMITMENTS OF TRADERS REPORT

Editor,

I just read Sam Bhugaloo's article in the October 2006 issue, "Watch The Commercials," and I have a question for him: When the setup is complete (heavy net long or short commercials and Williams' AD crossover), is it only useful for the nearby futures contract? How far out into the future is the information valuable? I have been studying this and it seems uncannily accurate, but I never found the answers to these questions.

Jon Zang

Sam Bhugaloo replies:

In the article, you will see I have purposely used weekly charts for my analysis, as this is the most logical choice. Remember, we get the information on a weekly basis. The daily Commitments Of Traders (COT) charts have too much "noise," while the monthly charts are too late for positioning our trades.

The fact that you are using weekly charts with the Williams' AD/moving average for your initial analysis enables you to position your trades on futures contracts in nearby as well as far-out contracts. The disadvantage of the latter is that in some markets, this may be illiquid and price swings may be volatile. I personally would trade contracts with a time frame of three to six months. As I pointed out, the commercials can stay in a losing position a lot longer than most traders can.

Suppose you have entered long on a futures contract as a result of the indicators mentioned in the article, and a bullish trend starts but may be close to the first notice day. In that case, I would roll forward my position. As I show in the article, once the commercials are net long in a particular market, you should be monitoring this market with the timing trigger, since it often indicates that the market will move higher at some point. It makes sense to see the commercials below the zero line, since they are selling products they own. This is why the bullish trend continues despite the fact that so many commercials are selling. Remember, we are looking for extreme levels of bullishness and bearishness for critical turning points.

WILLIAMS' AD WITH 28-DAY MOVING AVERAGE

Editor,

I really liked Sam Bhugaloo's October 2006 article, "Watch The Commercials,"  on using the Commitments Of Traders report for trading. I just hope the CFTC keeps the COT intact. I use the COT using LW's 2005 book.

I have no coding experience. I use TradeStation and was wondering if he happens to have the .ela code for the Williams' AD with the moving average.

Bill Jordan

Sam Bhugaloo replies:

I am glad you enjoyed the article. I share your sentiments regarding the CFTC keeping the COT reports in its current format. I did receive an email informing me that in view of the overwhelming response from users of this information, the CFTC has decided to keep the reports in part.

I do not currently have the code for TradeStation, since I use Track 'n' Trade software for my analysis.

Editor's note: We plan to include code for the Williams' AD with the moving average on our website at www.Traders.com in the near future.

WATCH THE COMMERCIALS

Editor,

Congratulations to Sam Bhugaloo on a fantastic article. We here at Gecko Software appreciate his use of our charts in the article.

Lan H. Turner, CEO
Gecko Software, Inc.

Sam Bhugaloo replies:

Thank you for your kind words. The Gecko software helped facilitate my task in explaining the COT charts.

BACK ISSUE/ARTICLE

Editor,

I have been trying to search at your website for the article by Sharon Yamanaka, "Going Forward Using Stock Screeners." How can I purchase the article or back issue? I have only just discovered your magazine and have bought the September issue.

John
Auckland, New Zealand

That was originally a Working Money article and was reprinted in the July 2006 issue of S&C. To get a copy of the article, you can either purchase the July 2006 back issue or sign up for a subscription to Working Money at https://www.Working-Money.com, which would give you access to all previous Working Money articles. To purchase a back issue of S&C, call our circulation department at 800 832-4642 (800-Technical) or (206) 938-0570. -Editor

REAL-TIME INTRADAY TECHNICAL ANALYSIS STOCK SCANNING

Editor:

In 2004 you published an article on www.TradersParadise.com. I was wondering if there are other products on the market today that will perform real-time intraday custom scans based on technical criteria. I would like to search intraday data (five-minute) to real-time based on ADX, directional movement, CCI, and so on.

Chris Pavelic

You have several options. Most trading platforms and brokerages offer market scanners. Moreover, there are several browser-based market scanners such as MarketGauge from DataView, as well as StockScan and StockCharts. You may want to check the Traders' Resource section at our website to help find market scanners that have the features you want. -Editor

ERRATA: DATA SERVICES

In the Data Services table published in our October 2006 issue, we inadvertently reported answers incorrectly in the column showing whether a data service offers historical data. We regret this problem, which occurred when we transferred information from the Traders' Resource database at our website to the table.

Thus, we misstated that CSI's Unfair Advantage product didn't offer historical data, when it does. Readers will find a review of one of CSI's data tools starting on page 58 of this issue. -Editor

Back to December 2006 Contents

Originally published in the December 2006 issue of Technical Analysis of STOCKS & COMMODITIES magazine.
All rights reserved. © Copyright 2006, Technical Analysis, Inc.