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Issue No. 27 – May 23, 2005 Prescott, Arizona Systems@WiserTrader.com
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1.0 Trading
This is a special offer. In exchange for an short email comment about the quality of information in the newsletter, you are offered a choice of 1 month free of either advisory service. The comments along with your name will be used in a testimonial but your email address will not be published. You do not need to signup for the advisory, your email with a brief comment will be enough to give you 1 month of free service. This is a chance to satisfy your curiosity with almost no effort. If you already subscribe to one of the advisories, this will add an additional month to your subscription. If you are interested, just send an email with your brief comment to Systems@WiserTrader.com by June 6, 2005. Be sure to include whether you want a free month of the stock advisory or the options advisory.
Options Advisory - $40 monthly - 1st month free. - Next 41 subscribers
- $384 annually - 1st month free. - Next 41 subscribers
Stock Portfolio - $10 monthly - 1st month free. - Regular rate.
- $96 annually - 1st month free. - Regular rate.
Trading Systems - Original rates - Wide variety - 90 day guarantees
This kind of offer can not be made for trading systems because I have no control over pricing. There might be a way to save money on non-software formats by collectively sharing costs and information. The more people that go in on the cost, the cheaper it is for everyone. Of course, you need to adhere to the trading system designer’s terms of use. Most software, for example, allows only one user per purchase. One way to contact interested parties is through the message board forum. The forum is unlocked for use.
1.1 Scanning Data
Did you know that it is possible to track of hundreds of stocks at a glance in Microsoft Excel? A trader faces the challenge of tracking multiple asset classes containing large numbers of entries. He needs to track changes in price behavior and technical indicators and compare them in charts.
© 2005 Desert Mountain Systems, LLC. Members of wisertrader.com are neither licensed brokers nor licensed advisors. Trades discussed represent recommendations made by the editor for the wisertrader.com portfolio. The newsletter and web site are for information only and should not be considered as personal advice. While it is believed that the posted information is factual, mistakes can be made in transcription. Investors should trade stocks only after verifying all information and consulting with a licensed broker or adviser. Desert Mountain Systems markets third party trading systems but has no other affiliation with trading system companies.
Preferably, the information is automatically and continuously updated. Many stock scanning tools are available today to collect price and volume data over the internet from free data sources. Some have modest flexibility in the way data is presented. Others are more limited. So far, I have only found one tool that can import delayed and real time streaming stock, options and currency exchange rate data directly into Microsoft Excel. That tool is XLQ-Plus. It downloads and installs with a few key strokes in a Windows environment and runs in the background under Excel. The set up is straight forward and no system reconfiguration is required. Sample spreadsheets come with it to help get you started and operational spreadsheets are available from many sources, including me.
The main advantage of the XLQ-Excel interface is its nearly infinite ability to manipulate huge tables of data using the full range of Excel’s algebraic, arithmetic, Boolean, Visual Basic and statistical functions along with macros and conditional formatting to display data in the form of numbers, text and charts – all continuously updated. Only an experienced Excel user can fully appreciate all this power.
Each function allows you to specify the data source. Sources of data are:
YAHOO - retrieve data available from www.Yahoo.com
MSN - retrieve data available from moneycentral.msn.com
YAHOO-ECN - retrieves available live ECN data from www.Yahoo.com
YAHOO-RT - retrieves real time data available from www.Yahoo.com. (Configure your login via XLQ
preferences)
YAHOO-EU - will retrieve data from European Yahoo sites.
YAHOO-UK - will retrieve data from Yahoo's UK site.
YAHOO-INT - will retrieve data available through all other Yahoo sites around
the world.
IQFEED - subscription streaming real time data covering equities,
options and futures, including intraday backfill and historic data (http://www.iqfeed.net/XLQ/
) (xlqPlus only)
AAII - a function suffix that collects historical data from the American Association of Individual Investors (AAII) Stock Investor Professional (SIP) proprietary historical weekly database of 8,000 stocks. This database contains entries from balance sheets, income statements and cash flow statements, among much other historical and industry related company data.
For the kind of data scanning needed to get an overall feel for what the market is doing, real time streaming data is not necessary. Most of my trading decisions are made after market hours anyway so that the 20 minute delay in free Yahoo and MSN data is quite adequate. However, I do subscribe to the AAII - SIP software and database for a more complete historical picture of the markets.
A large number of data collection functions are defined for the specific time span of price data you want to appear in Excel. Information can be as specific as the last bid and ask price or as general as the average volume, market cap or 52 week high. There are literally hundreds of functions available. Examples of some of the entities displayed and continuously updated in some of my spreadsheets are: the most recent stock quotes, options quotes, ETF quotes, monthly, weekly and daily price changes, foreign currency exchange rates, MACD, William %R, price to book, PE ratio, PEG ratio, price to sales, current EPS, expected EPS this year, last earnings report date, earning surprise, today’s volume, percent of average volume and, of course, the Stephen Cooper biggies, % rank relative strength, % of 52 week high and 12 month EPS growth. These are only a tiny fraction of what is available.
As a regular reader of this newsletter, you see examples of the XLQ-Plus, Excel, SIP combination all the time. Most of the charts and tables in this newsletter are automatically updated, including many of the color indicators. I give the data some thoughtful consideration in order to summarize it each week but there is not enough time to comb through all the data and manually rearrange it for presentation. It has to be a simple copy and paste or the work could not be done on time. If you use Excel in a Windows environment, this is a great way to track a large number of stocks with nearly unlimited flexibility. If you use Excel in a public environment, such as on the job, all anyone will notice on your monitor is an open spreadsheet. The method does not require use of Internet Explorer but you do need an internet connection, the faster the better. Although a dial up might work, you have to ask the designer. I have not tried it on a dial up. After all, we are talking about a lot of data here.
XLQ is the glue that combines internet stock data, Microsoft Excel and AAII SIP. For anyone who needs a continuous and broad market snapshot at a glance, XLQ-Plus provides a relatively inexpensive solution to import market data into Excel for flexible presentation. As a user of XLQ-Plus, Excel and SIP for a number of years, I highly recommend that you investigate how XLQ-Plus can save you time and effort and broaden your view of market activity while simplifying it at the same time while using Microsoft Excel.
1.2 Market Trends
While the market see saw action is not completely gone, technology stocks did some heavy lifting this week. Even energy and materials rebounded somewhat. Healthcare was surprisingly flat for the week although it took less of a dip earlier and, as a defensive play, is probably more likely to remain consistently in positive territory.
One has to be mindful that charts like Figure 1 have a moving zero reference baseline and can take on a dramatically different appearance from week to week compared to a chart where the baseline remains fixed. For example, in a few days the zero baseline will move to 4/26/05 and this will effectively shift many of the curves upward, some by as much as 4 to 8%. This might move even energy and materials into positive territory.
Figure 2 shows a number of ETF leaders for the past week along with those for the major indices and their confirming indicators. It is a good idea to monitor transportation as it helps to confirm the direction of the DOW. The S&P 500 is confirmed by the financial sector in Figure 1 and the banking industry in Figure 2. They appear to be in sync. The NASDAQ seldom moves consistently without parallel movement in semiconductors and biotechnology. They also appear to confirm one another. The only discordant ETF in the chart is gold whose gradual downward movement over the past month is a sign of the continuous rise in the US dollar.
The leading industry ETF’s are broadband holders BDH, biotech BBH, Mexico ishares EWW and semiconductor holders SMH. Aside from these, most everything else moved upward in tandem. There was weakness in a few Asian ETF’s last week, particularly Japan and Hong Kong.
FIGURE 1
FIGURE 2
A tabular view of segments of Figures 1 and 2 is presented in Table 1 Table 1Industry ETF's and Sector SPDR's 05/21/05
|
Industry or Sector |
1 month |
1 wk ago |
2 wks ago |
3 wks ago |
4 wks ago |
|
GOLD |
-4.0% |
-0.7% |
-1.3% |
-1.9% |
-0.1% |
|
Transportation |
5.8% |
6.3% |
-3.5% |
3.0% |
0.1% |
|
Telecommunications |
1.4% |
3.4% |
-1.8% |
-1.3% |
1.2% |
|
Semiconductors |
10.4% |
3.1% |
2.5% |
3.9% |
0.6% |
|
Biotechnology |
6.4% |
2.0% |
1.2% |
3.4% |
-0.4% |
|
Real Estate |
8.5% |
4.7% |
-0.1% |
0.6% |
3.1% |
|
Oil |
-7.4% |
2.4% |
-6.2% |
2.9% |
-6.3% |
|
Energy |
-5.7% |
2.2% |
-5.6% |
1.4% |
-3.5% |
|
Materials |
-0.7% |
3.3% |
-6.1% |
2.7% |
-0.2% |
|
Financials |
5.4% |
3.6% |
-1.8% |
1.1% |
2.5% |
|
Utilities |
0.5% |
2.4% |
-2.2% |
-0.8% |
1.1% |
|
Healthcare |
3.2% |
1.3% |
-0.3% |
0.9% |
1.3% |
|
Industrial |
3.3% |
3.7% |
-1.4% |
0.9% |
0.1% |
|
Technology |
6.4% |
3.5% |
1.2% |
1.4% |
0.3% |
|
Consumer Staples |
4.0% |
2.9% |
-1.0% |
1.3% |
0.7% |
|
Consumer Discretionary |
4.9% |
4.6% |
-1.3% |
2.4% |
-0.9% |
2.0 Market Analysis
Industry leaders in Table 2 rank from highest to lowest.