| StockFetcher Forums · Filter Exchange · magic box | << 1 2 3 4 >>Post Follow-up |
| chetron 2,817 posts msg #77550 - Ignore chetron modified |
8/14/2009 6:38:28 AM The Magic Box The reason that I named this setup the Magic Box was so that you could relate to it and remember it faster. Without relationship to something, it is nothing to us. It must be something memorable to you before you can set it into your subconscious mind and see it always. If I said Snow White, or Peter Pan, or Moby Dick you could immediately draw it into your memory because it has relation to your past. The Magic Box is named to bring good feelings and hope. Just as Fairy Square and Knight’s Crossing which will become memorable when we do their special presentation later. (A) The Magic Box is a pure two-day pattern. Basically the "close" of a red candle printing on or near lower Bollinger Band with the next day printing an "open white candle" (A1) On day one the Aroon Down is setting at 100 on the indicator and price is near the lower Bollinger Band. The Candlestick is dark-shadowed. (A2) On day two, to form the Magic Box, the Aroon Down must drop to 87.50, and price to form a white candle, to complete the box. No other indicator is watched until this occurs for this setup, just the Bollinger Band and the Aroon Down. If you see a Magic Box develop, that being, on the first day the Aroon Down going from 100.00 while the close is either on or just above the lower Bollinger Band and the second day the Aroon Down is now 87.50, you have a Magic Box. (B) Now, the buy opportunity occurs when the confirmation of two things happens: on day three or few days later the Aroon Down goes to 75.00 and the Williams%R comes above the -50%. That is the buy. The Williams must come through the -50%. It may take more than three days but you must wait for the confirmation of the William %R. I have seen again and again, the Aroon Down come down from 100.00 to zero without the Williams ever crossing the -50%, those are the ones you pass on. There will be no growth when this happens. At most there is consolidation or a small drop. During this process the Aroon Up can rise slowly but without the Williams you have nothing. There are other Magic Boxes that develop in a stock's life cycle, too, and they, too, can give great growth. These are the supported median, the floating, and the rising Magic Boxes. The buy-in criteria, though, will remain the same for all of them. The Aroon Down comes to the 75.00 and the Williams crosses the -50%. June 7th, 8th, and 9th accomplish this in the HGR chart, though the William %R took until June 13th to confirm. You must wait. The Fairy Square The Fairy Square is very simple in its concept. But in order to understand it you need to understand the Magic Box concept first. So, please study that step first. This Fairy Square concept is generally applicable to stocks in downtrend. The Fairy Square is a square box setup. It may not look exactly a square because of chart size, and other parameters used for graphing using Stockcharts or other graphing method. For simplicity use overlay for volume and setup Aroons immediately below the price chart. A square consist of four sides. Let us start with bottom of square, the base, the very foundation of Fairy Square. This base is formed by drawing a line from the latest Aroon Down 87.5 of a Magic box (Point 1) to Aroon Down 87.5 of immediate previous Magic Box (Point 2). Next the left side of square is formed by drawing line from Point 2 up to Median line of Bollinger Band (Point 3) and the right side of box is formed by drawing line from Point 1 up, and same length as left side reaching to (point 4). And finally the top is formed by connecting point 3 to point 4. There is your Fairy Square and, the trend reversal that usually comes with it. The two Magic Box setups are the key. On the attached annotated chart, you will see that the base of the Fairy Square begins and ends from these dates: May 18th (point 2) to June 8th (point 1). The other three sides are formed following method outlined above. What you are looking for is the Upper Bollinger Band piercing the Fairy Square through the topside of Fairy Square (Point 5). If it does pierce, then there is strong possibility that a trend reversal to the upside is near. Wait for the latest Magic Box confirmation (see Magic Box write-up), i.e. keep an eye on the Williams %R buy confirmation on the latest Magic Box. So often the Upper Bollinger Band will continue to fall, even when the stock is beginning to rise. The Knight’s Crossing We have always endeavored on the StockSeasonality message boards to keep the understandings about seasonality and entry points for qualified buys simple so that our members could compound the interest in their portfolios at a safe and simple pace. We have stated long ago the amazing power of the Aroon indicator to help you discern a trend for your seasonal stocks. I tell you now, keep it simple. All of our setups in this first series will revolve around what I think is the most powerful initial setup in the investment world, The Magic Box. Our Fairy Square setup comes from following the actions of the Magic Box. Now, to follow suit and to keep it simple, our Knight’s Crossing, also follows the initial setup of the Magic Box. You may ask why Flota and I decided to name it the Knight’s Crossing. It is because once you have focused on these two indicators following the Magic Box, you become King of your own destiny concerning that stock, and these Knights belong to you and are crossing solely for your benefit. Now, for the simple formula. We look for the common denominator of all, big, sustained moves in a stock. The Knight’s Crossing occurs when (1stknight) the close of the stocks price is shown to Cross above the 5sma (5 day simple moving average) and (2nd knight) the D+ in the ADX indicator Crosses the 20 to the upside. These 1st & 2nd Knight’s Crossing do not have to occur simultaneously and they could even occur during the initial setup of the Magic Box. It is that simple. Your aim is that your Knights lead the 5 day moving average above the median line of the Bollinger Band (20), which is also the 20 day moving average. This can lead to huge gains. You may wish to hold the stock either as long as the stock’s close is above the 5 day moving average, and/or the 5 day moving average is above the median line In the example HGR chart you can see that the “1st Knight’s Crossing”, i.e. price close above the 5 sma occurred on June 10th and than it galloped along until the confirmation by “2nd Knight’s Crossing”, i.e. D+ in the ADX cross the 20 to the upside, which occurred on June 15th. Money Mountain You are only concerned with two indicators in this setup up. The first indicator is the Aroon set at 8 day, and the second indicator is the MACD Histogram set at 5,15,10. When you are looking at the Aroons you want to see the Aroon Down crossing the 70 coming down, and you want to see the Aroon Up on zero. You will then notice the MACD Histogram having a sloping set of bars heading toward the signal line. With the Aroon Up on zero the MACD is very close to crossing into growth mode. When you see the Aroon Down dropping through the 70 you should be considering buying. Landslide The LANDSLIDE setup is an inverse MAGIC BOX setup. Everything about the MAGIC BOX for growth is thus reversed for selling purposes. In the MAGIC BOX your main concern was the direction of the Aroon Down indicator but with the focus being on selling your stock and locking in your profits, the focus is now on the direction of the Aroon Up. In the LANDSLIDE you want to see the Aroon Up drop down to the 87.50 from 100.00 to qualify for the LANDSLIDE setup. Now, you look for the confirmation of the William%R dropping down through the –50% into the –80%, instead of rising. (A) The LANDSLIDE is a two-day pattern. Basically the "close" of an “Open White candle” printing on or near upper Bollinger Band with the next day printing a "Dark candle". (A1) On day one the Aroon UP is setting at 100 on the indicator and price is near the upper Bollinger Band. The Candlestick is Open White. (A2) On day two, to form the LANDSLIDE, the Aroon UP must drop to 87.50, and price to form a Dark candle, to complete the slide set-up. No other indicator is watched until this occurs for this setup, just the Bollinger Band and the Aroon UP. (B) When the warning is issued, it is time to head for the hills before the LANDSLIDE starts. The warning occurs when on day three or few days later the Aroon UP goes to 75.00 and the Williams%R comes below the -50%. That is sell. The Williams must come down through the -50%. It may take more than three days but you must wait for the confirmation of the William%R. You will probably see the close drop also below the 5 day moving average and you will probably see the Aroon Down very close to the Level of Decision or the zero line. That is a frightening time for most investors. When the Aroon Up is dropping in concert with the Aroon Down dropping bad news follows. You will see many head fakes, too, as the Aroon Up is very near the bottom when the Aroon Down makes its run for dominance. The dominance will not last, thus head fakes if the William%R does not find its way below the –80% where it can bury its head Ostrich-like while the investors lament LANDSLIDE’s are so devastating to an investor that they can wipe out months of earnings in a few weeks time. Learning just one such setup possibility, even if it doesn’t always pan out is worth your effort and time to do so. I would like to thank “d-k” once again for his efforts in this setup annotation. Many people have asked for the exit chart examples and this is the first of several to be created. I hope it helps you. This series has not finished. So, stay tuned to more of what we can find to help you learn to invest. Trading: It is highly recommended that you paper trade the system to familiarize yourself with it thoroughly. As with anything in life nothing is guaranteed, so, always use appropriate stop loss according to your risk tolerance. Kenneth J. Goodrich and Don THIS IS WHAT IT IS ABOUT, www.stockseasonality.com/setups.htm |
| chetron 2,817 posts msg #77556 - Ignore chetron modified |
8/14/2009 12:05:02 PM IS THIS THE REVERSE?????????? ALL INCLUSIVE..... |
| TheRumpledOne 6,411 posts msg #77562 - Ignore TheRumpledOne |
8/14/2009 12:36:37 PM You guys trying to dig up "treasure"? LOL!! |
| chetron 2,817 posts msg #77564 - Ignore chetron |
8/14/2009 1:26:05 PM you got any?????????????? = ) |
| chetron 2,817 posts msg #77573 - Ignore chetron modified |
8/14/2009 7:29:54 PM and finally..... AND ... LASTLY.... |
| chetron 2,817 posts msg #77577 - Ignore chetron modified |
8/14/2009 11:08:42 PM THE KNIGHTS ALONE.... |
| chetron 2,817 posts msg #77580 - Ignore chetron modified |
8/15/2009 9:02:12 AM tro's version with add ons.... |
| chetron 2,817 posts msg #78244 - Ignore chetron modified |
8/29/2009 8:58:36 PM MONEY MOUNTAIN (MACD/PRICE POSITIVE DIVERGENCE) |
| jrbikes 624 posts msg #78247 - Ignore jrbikes |
8/30/2009 12:17:04 AM my head hurts! |
| chetron 2,817 posts msg #78256 - Ignore chetron modified |
8/30/2009 8:59:34 AM SORRY JR, NO PAIN INTENDED. FOR THE MONEY MOUNTAIN FILTER, LOOK AT AMD ON 9 JULY 09 AND 21 AUG 09. I DREW THE AROON, BUT I DON'T THINK IT'S NECESSARY. |
| StockFetcher Forums · Filter Exchange · magic box | << 1 2 3 4 >>Post Follow-up |
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