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.

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For anyone who has seen our charts with its consistent oscillators and indicators, it is fairly intuitive to understand that we can form various trading strategies using the turning of the different dominant oscillators or a combination of them. Several such strategies were developed and applied to historical data of different stocks. The alerts come from the best of such time tested strategies. 

For example, based on the historical charts of a stock, let us say that there were good trading opportunities (price movements) based on say

1. A combination of Mid and Fast oscillators
2. The turning of the Mid oscillator
3. Combination of Mid and Black oscillators

Each of them is a particular trading strategy. Since the oscillators have different periods of oscillation, it is clear that these opportunities provide trades with different durations. For example the first strategy mentioned above would lead to trades with duration less than a trading day while the third one above leads to trades that take close to two trading days between entry and exit.

The main philosophy behind the trading strategies is that they are tractable, i.e. the user is able to understand by looking at the graph, why an alert came up.

Every trading technique has the following basic intelligence:

• Identifies dominant oscillators or combination of adjacent oscillators
• Ensures that the intraday model's slope is not strongly in the opposite direction
• Uses the faster oscillators to improve the entry point

Thus the alerts are meant to draw attention to charts that have great potential for trades. We can see that not many of the safety factors are built into this basic intelligence. We are continuously adding more safety factors and testing them over greater historical time period to improve the quality of the alerts.

However, it is important to conduct a quick and easy chart study to examine the safety of a potential trade. For example consider the alert of type 5 issued yesterday (8/4) at 11:30 for Ceragon Networks Ltd (CRNT). The alert and price is marked on the title of the bottom right panel and the time is marked on the time line at the top. The main points to note are included in the figure.

With the Blue menacing in this Intraday chart, let us consult the End-of-Day chart for CRNT from the closing of 8/3 for some more safety analysis.

The alert has drawn our attention to a potentially unsafe trade.

Below is the chart from 1:30 today (8/4) with the bottom right panel enlarged so that we can clearly see how the dominant Blue behaved and influenced the price.

We can also see that recently there has been an upward crossing point of the Black and Blue in the upward direction that produced an uptick in the price as expected.

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