Wednesday, April 22, 2009

Qs Risk Map

Here's a little risk assessment tool of the NAZ 100 courtesy of the NASDAQ that I've mentioned before. For those who daytrade the Qs I find the tool useful in constructing a mini-watch list to gauge impending momentum in the Qs.
Currently, I use a mini-list of RIMM, GOOG, AAPL, MSFT, INTC and QCOM to help forecast Qs action (not shown).
This is a quick visual version of the 3 Finger Lead study in the Qs Dirty Dozen systems and when these Qs components are rolling to new highs (or lows) on 2 or 5 minute bars the Qs are soon to follow.
I also monitor the relative % gain (or loss) in the Qs and the mini-list, as the tendency is for the Qs to rise to the median level of the mini-list % gain (or loss). The beauty of this little watch list is that it takes just a few seconds to monitor, but it has significant predictive power (in my experience).
In the case of Tuesday I was puzzled by the Qs midday inability to keep up (% gain) with the DIA, IWM and SPY, as has been the case for several weeks now. It was only when I studied the mini-list that I realized GOOG was actually in negative territory for the day and this was the anchor that was holding the Qs back. Once the late afternoon surge began and GOOG went positive, the Qs picked up relative strength and ended on a % gain parity with the other majors.
So keeping track of ETF component stocks can be useful tool forecasting the parent ETF direction.


John Pingel said...

bzbtrader here is the link to a screenshot of a VIXEN Six Pack setup that I've been fiddling with. Thank you for all the sage wisdom that you post on this blog.

John Pingel

bzbtrader said...

Thanks for sharing your setups.