As explained in the manual, our automated alerts as only endowed with bare minimum intelligence. Fundamentally, they should be considered as something that just draws our attention to a stock's chart. A quick chart study not only gives us the much needed safety check but it can also present other possibilities. Thus even after an alert has been open (i.e. last two digits turned to 00) it makes sense to check out the charts for opportunities.
Sometimes, as shown in the example here, some alert can lead to executing the exact opposite trade.
Keep in mind that blindly trading our alerts with good odds still leads to consistent growth of capital over time, but a little human intervention can enhance the performance greatly.

This positive(buy) alert was issued on AKS at 3:30pm yesterday (9/14). A quick glance at the Intraday chart shows us that it is not a safe trade to take. The turnaround of the Pink that has triggered the automated alert is not concrete. The fast oscillators definitely indicate downside. The Blue oscillator is very similar to NASDAQ Composite's oscillator. But it is clear that the Blue hasn't had much correlation with the price recently. This means End-of-Day oscillators are significant for this stock.
And very importantly, from the bottom left channel we can see that the price has been drifting lower along with the Intraday Model (brown) below the Daily Model (gold).
Does it mean that the Daily Model is due to turn around?

To find out if a longer scale reversal is heralded by the downward drift of the price, let us check the End-of-Day charts.

Just like the Blue Oscillator in the Intraday, the huge Black Oscillator hasn't had much correlation with the price, but the Pink has and with a magnitude of swing close to 20%, it is very significant. Once again, this oscillator is very much resembling the End-of-Day Pink of NASDAQ COMP which was discussed in the previous blog.

So though the alert is for a buy, the stock looks ready to slide. And indeed it slid opening on 9/15 over 4% down. Steadily drifting down through the day despite the swings of NASDAQ, AKS closed on 9/15 at $13.7 a full dollar or 6% lower than the entry price of $14.57.

Chart this alert had drawn us to thus delivered profit from a trade in the opposite direction. At the same time, our system also delivered profit from an alert based overnight trade of RFMD (short) and roundtrip trade of ADSK (long) today among others.

For those interested in daytrading, here are three rountrip trades based on alerts from today. Our automated alerts signal trading opportunities of different durations so you can pick trades of duration that match your trading/investment philosophy.

There is 1 buy and 2 shorts in the list below and from the alert digits, we can see that all were expected to have duration less than one trading day.

 

Ticker       Alert        Entry Price     Exit Price      Duration   Profit%

MXIM   62316113607   $16.56           $16.91         ~2hrs      2.1%

HBAN  -72313134906   $6.12           $6.05           ~2hrs      1.1%       

CBRL  -54007086507   $50.82          $50.26         ~50min    1.1%

 

Using charts (sans alerts), shorting AKS was also a profitable roundtrip today.

 

In our user manual, we have discussed that it is very beneficial to align the trades with the general direction of NASDAQ.
Yesterday's NASDAQ Comp charts showed that there was still upside left for the market.
So when the ALTR buy alert shown below came along, it had added incentive for taking it.
Notice that at the time of the alert both the components of the Pink oscillator (top right panel) i.e. the Green and the Violet have turned upwards. The entry price was $26.63. The fast oscillators in this chart don't have much influence on the price (Reminder: price is the sum of all the oscillators and indicators).
The Black oscillator hasn't yet turned and the Blue oscillator is still up. So the only concern for safety comes from the Daily Model (bottom left) that has turned down.
But it is a short term type 6 alert with 0.9 trading days duration. Learn more about alerts here or in the manual.

As expected, after the dip in the open the market turned around (we'll get to the COMP chart shortly). By 11:15am today, as seen from the charts today, we can see that the fast oscillators that have gained magnitude are turning down. At this point with the price at $27.57, we can exit with a very neat 3.5% profit without waiting for the automated exit alert.

In fact the automated exit alert was issued for the trade 12:30 at a price of $27.50 as the Pink oscillator had turned down.

Picking trades that are aligned with NASDAQ would have also led to trades on RFMD and DD yesterday as can been seen in the charts at our site.

Now let us look at the zoomed in top panels of the NASDAQ COMP Intraday chart from 12:45 today. We can see how as expected from yesterday's charts, the fast oscillators moved down first before turning around and making the markets positive.

The market movement today, as can be seen above, was well correlated with the oscillators. The media had to first find a causation in European worries for the down open and then reassign the cause to report on retail sales once the market turn around :-)

In this blog, we will look at a great example of how studying the charts help fine-tune and improve the performance we can extract out of the automated alerts.

In the figure below, we can see that a buy alert of type 6 was issued for Atmel Corporation (ATML) yesterday (9/1) at 1:45 pm.
The alert number is 62909168611. So the average profit from the 86 trades used to compile the statistics for this strategy on ATML is 1.6%. The average trade duration is 1.1 trading days. With a Trade Ratio of 2.9 and a profit ratio of 0.9, the odds (TR times PR) is pretty good. Actually, for strategy for which we find PR values less than 1, like in this case, it means than early exit cut-offs are being used.
Learn all about alerts from our manual.

From the figure we can see what has triggered the automated alert. Keep in mind that the automated alerts have only very little intelligence for safety built into them. That is why it is easily possible to improve their performance using the charts. In the figure below, it is clear that the fast oscillators have some downside and they'll have an immediate impact on the price. So waiting for a couple of hours till they come down makes sense.

In terms of the slower oscillators and the Daily Model (golden in left bottom panel),  this trade looks safe to take. Let us double check the safety by considering the End-of-Day charts for ATML for 8/31. Since we are going to delay the entry, we do have time to check out the End-of-day charts for safety :-) Our end-of-day charts consider only the daily closing prices as input to generate the oscillators while the Intraday charts have 15-min price data as input.

The buy trade looks very safe from the end-of-day chart perspective.

By 3:45pm yesterday (9/1) as we see below, the fast oscillators have indeed come down and brought the price to a slightly better entry point. Our oscillators can be trusted to move consistently. Their impact on the price depends on how dominant they are and how other oscillators are poised.

So lets say we take the trade before market close at this price.
As expected, ATML moved up after market open today (9/2). In the chart below at 10:30am, we see that fast oscillators are poised to go down. So it is a good time to take our profits and exit.

The automated exit alert came in 15 minutes later when the oscillator that triggered it in the first place had turned. But the fast oscillators have already dragged down the price over 1%.

So if we had blindly followed the automated alerts with entry at $5.98 and exit at $6.08, the profit would have been 1.7%.

But by consulting the charts and fine-tuning the entry to $5.95 and exit to $6.14, the profit would have been 3.2% for just 45 minutes in the market! Almost double the profits!

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The markets have opened September with a bang and NASDAQ was trading over 2.5% up in the morning session just as our Composite Index charts had indicated yesterday!

Before we get to today's NASDAQ charts, here are 6 round trip trades our automated alerts(entry and exit) delivered since yesterday (8/31). There are three buys as seen from the positive alert numbers and three shorts. To learn more about alert numbers, visit this blog or check out our manual.

No.  Ticker          Alert                Entry Price        Entry Time      Exit Price       Exit Time      Profit %

1.     STMP     56508184513        $11.05              11:40               $11.25           15.53            1.8%

2.     AMKR     62316314911        $5.23                10:28               $5.29            12:00(9/1)      1.1%

3.     CRNT      79912142204       $8.55                12:58              $8.75            10:25(9/1)       2.3%

4.     RFMD     -54008206007        $4.9                  14:07               $4.85            15:07            1.0%
 
5.     ATML      -72811164206        $5.87                14:09               $5.79            15:39            1.3%

6.     BBY      -54507074404         $31.65                14:10              $31.38           14:57            0.8%

This performance is from blindly following the alert. As we have seen in an earlier blog entry, the performance can be improved by fine tuning the automated alert entries and exits by consulting the charts. You will notice that the alerts listed above have odds (i.e. TR*PR) above 3.

Now let us look at the NASDAQ Composite charts. In the Intraday chart below, we can see that the Pink oscillator has surged and its magnitude has been redistributed into two components: Violet and Green. Remember that Green had disappeared yesterday because of lack of magnitude.

And here is the End-of-Day chart from yesterday. The top left panel has been zoomed in to show the upward crossing point.

From the charts above, you can access the movement of the market for the future. Keep in mind that the faster oscillators have immediate impact but the Price/Index is always the sum of the oscillators and the indicators.

In a month, our service delivers well over 200 round trip alerts.
By using the Promo Code: FALL2010 you can subscribe for just $49.99 per month.
Plus there is a 30-day risk free trial for you to get to know the system and test it out! SIGN UP NOW!!

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Here's the NASDAQ Composite Index chart as of 11:15 am. 

In the chart below from 3:45pm on 8/24, we see that an automated potential short sell alert has been issued for Autoliv Inc (ALV). 

This blog discusses how examining the charts in tandem with the automated alerts can help fine-tune our entries and exits and increase profits.
The story is best told in pictures :-)
The alerts are fully automated and should be primarily treated as a mechanism to draw our attention to charts bearing potential trades.

Consider the type 4 alert issued for Cantel Medical Corp (CMN) at 2:00 pm on 8/16. We can see that the estimated profit is 2.6% from the alert digits (6th and 7th digit).
To learn more or refresh about the significance of the alert number please visit this previous blog entry.

From the chart accompanying the alert shown below, we can see that there are several factors that indicate we wait a while before making this entry.

A much better entry point comes towards the end of the trading day as shown below

But if we wanted a clearer turn of the Black oscillator and don't want to risk staying in the market overnight, yet another entry point comes along the next day morning as shown below.

Notice that even in the chart above, the entry price of $14.45 is less that the $14.5 price at which the automated alert came in.

The market rallied on 8/17, so towards the end of the day a good exit opportunity can be seen in the chart below.

As mentioned in the chart above, the price stayed flat and then starts to drop as shown below. It would be prudent to exit without risking staying overnight as the very dominant Blue is showing signs of turning.

In the best case scenario of entry at $14.40 and exit at $14.80, the trade would have made a profit of 2.77%!

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On a day that Dow has sunk over 200 points and NASDAQ composite down close to 3% (Yahoo! Finance report), let us examine a profitable short sell alert.

Let's examine a chart of Bed, Bath & Beyond (BBBY) on 8/6/2010 at 1:45pm (the time can be seen on the timeline at the top). Right below the ticker on the top left, we can see that an alert of type 5 has been issued. From the digits of the alert, we can see that the average profit for this strategy for this stock historically has been 1.6%, For more information about the statistical information contained in the alert or just to refresh, please refer to this blog: