To get help for the tick charts, which have certain features which differ from the time-based charts described herein, please use the Help link which can be found on the RTH Chart menu page. Here is a direct link to that RTH Chart Help Page.
Note: We've noticed that some browsers do not check the update time of the charts, so will reload an older chart from their local disk cache instead. If you get an old chart (identified by the date in the upper right corner), try holding down the SHIFT key while clicking the RELOAD button to force your browser to download another copy from the server. If the chart is still out of date, well ... what can we say ... we'll try to get it updated ASAP!
Light blue dashed lines which may appear to the right of the last price bar indicate support/resistance price points.
Moving Averages appear as lines tinted blue.
Linear Regression Line will appear as a straight yellow line on some
charts (individual stock charts) or a straight black line (ETF Trader charts).
This is a full data linear regression fit on the data. If the line is moving
up, the overall trend is up); if the line is moving down, the overall trend
is down.
Polylines (Polynomial Non-linear Trendlines)
The text shown within the leftmost column in the table indicates by matching color which trendline it is associated with. This text may be any of the following three types:
Up to 10 polylines may appear on any individual chart. Since moving averages are always a shade of blue, no polyline will appear bluish.
We have found that many markets will exhibit trending behavior not wholly explained by a simple straight (linear) trendline, but will tend to follow a curved (non-linear) trendline. These trendlines are constructed using three or more significant highs and/or lows. Longer-lasting trends tend to follow conventional straight lines. However, some significant market moves do take place along polylines.
Often, price moves to the trendlines will allow optimal trade entry
and exit.
Bar Colors
The daily charts display three colors of price bars: often red, green and purple, although
the red color may be replaced by another to improve the contrast of the price bars against a reddish background.
The color painted on each bar are:
The method used to determine trend is based upon the article Timing is Everything (or at least one more thing to watch) by Alex Saitta in the September 1997 issue of Futures magazine (page 50). Non-trending areas are marked by red price bars, while bullish trends are identified by green price bars and bearish trends are painted in purple price bars. The bottom line: at least for the bond market, according to the author, breakout signals tend to be more profitable if the bond market has been in a non-trending mode for 22 or more trading days preceding the signal.
This is also likely to be the case for other markets as well (the length of the non-trending timeframe is likely to differ, however), so we've implemented the technique described in the article for all of the daily charts. Here's a very brief capsule description of what we did: we first construct a Moving Average Channel (MAC, not shown on the chart, which consists of two moving averages: a 10-day average of high prices and a 10-day average of low prices). When the market first closes above the MAC, a buy signal is generated. When the market first closes below the MAC, a sell signal is generated. If the profit from that theoretical trade is more than 0.5%, all of the price bars within that trade's timespan up to and including the preceding high or low (depending upon whether that trade's position was long or short, respectively) are considered trending and are painted green or purple; otherwise, that period is considered non-trending and is painted red.
Obviously,
we skipped a lot of detail in this capsule summary. For a detailed
description of the MAC and this technique, please refer to
the September issue of Futures magazine. The author is a vice-president
and technical analyst focusing on T-bonds at Salomon Brothers in New York.
Top Plot: Magic-T Theory
Magic-T Theory was created by Terry Laundry. It works from the premise that markets spend an equal amount of time under accumulation and distribution. The centerpost of the T represents the time of transition from accumulation to distribution, generally corresponding to a buying opportunity as prices start rising from the low.
The right side of the T represents the end of rallies.
For more information about Magic T-Theory, read Terry Laundry's Blog.
Bottom Plot: Tick Money Flow Indicator
The bottom plot shows a money flow line based upon a modified on-balance volume
calculation. When a trade tick is up, the volume is multiplied by the trade price and
added to the line. When a trade tick is down, the volume is multiplied by the trade price
and subtracted from the line.
Divergence between the last charted price (the current price) and all historical prices shown on the chart is shown by the shading on the particular historic timeframe being compared. When the current price is lower than a particular historical timeframe, but the money flow line is higher, the background for that historic timeframe will be shown as dark green, representing a condition of Bullish Divergence. When the current price is higher than a particular historic timeframe, but the money flow line is lower, the background for that historic timeframe will be shown as crimson, representing a condition of Bearish Divergence. Otherwise, when price and money flow are in the same direction, neither dark green nor crimson will be shown.
This has great value as a filter for trade signals generated by other systems. For example,
let's say you have a BUY signal from another system or indicator, but the tick money flow
shows considerable selling into the rally (in other words, a lot of red is showing) -- this
indicates that the big money may be selling into the rally and it is not an opportune time
to buy. Similarly, if a lot of green is showing, it is probably not a good idea to sell short.
Bottom Plot: (Bottoms-Up) Accumulation-Distribution Indicator
The bottom half of each chart plots an indicator which measures the accumulation (buying pressure)
and distribution (selling pressure) in each stock within the index or sector and sums these. Note
that this is a different indicator than the one below, the Accumulation-Distribution Oscillator.
Look for bullish or bearish divergences to indicate a significant change in trend for the
index or sector. This indicator is either positive, meaning net accumulation, or negative,
meaning net distribution. Positive readings on the indicator confirm an uptrend and negative
readings a downtrend.
Bottom Plot: Accumulation-Distribution Oscillator
The bottom half of each chart plots an indicator in yellow, usually the
Accumulation-Distribution Oscillator (or AD
for short). There will also usually
be a moving average of the indicator shown in violet. For the AD, which
theoretically can range from 0 to 100, the 30 level
is considered "oversold," 50 neutral and 70 "overbought,"
so horizontal dotted lines are drawn at those levels to help identify
them. The terms oversold and
overbought are not to be taken literally, since we look for divergences
between price action and the indicator, rather than depending
solely on absolute indicator levels. Divergences occuring at overbought
or oversold levels carry more weight, though. More general information on
analysis of indicators, divergence and overbought/oversold levels
is available here.
OSCILLATOR DIVERGENCE BAR
A divergence bar graphically illustrating whether the oscillator is
confirming or denying the corresponding movement in price may be shown
in the top portion of the bottom plot. Light green indicates bullish
divergence while purple indicates bearish divergence.
The time over which divergence is measured is related to each pixels'
position on the bar, with the lowest pixel representing very short term
divergence and the highest pixel representing the longest term divergence
being measured. This bar is designed to detail the various periods of
divergence and present it in a manner easily grasped.
Bottom Plot: Money Flow Indicator
Instead of the AD, several of the stock index
charts, such as the Value Line Quarter-Hourly chart,
the Dow Industials Quarter-Hourly chart and
NYSE Composite Index Quarter-Hourly chart, contain
an indicator which is very important in determining the underlying
trend, namely Money Flow. This indicator is created
by a method similar to Joe Granville's On-Balance-Volume (OBV).
Each change in price is multiplied by the number of shares of stock
traded on that change in price. These individual values are summed
together to create the Money Flow Line on the chart. The direction this indicator
is trending tells you whether the prevailing pressure is coming from
the buyers (line trending higher) or is coming from sellers (line
trending lower). It is bullish when Money Flow is heading
higher and it is bearish when Money Flow is heading
lower, regardless of the direction prices are heading.
To aid divergence analysis, a band near the bottom of the top plot
showing bullish divergence in green and bearish divergence in violet
over various time periods will appear on charts showing Money
Flow. The band shows very short term divergences at the bottom
of the band, while longer term lookback periods move up the band. If
there is no divergence for a particular lookback period, the background
color appears for that lookback.
This is an indicator which is constructed by
summing the up and down volumes of each stock which goes into a particular index
and calculating an oscillator value for the whole index. We have volume oscillator charts on the
Daily Volume Oscillator Charts page.
All of the indices which have associated Volume Oscillators have names which end in
VOLOSC. For instance, the SPX (S&P 500 Index) volume oscillator chart has a ticker named SPXVOLOSC.
For more information about the Magic T-Theory Volume Oscillator, read Terry Laundry's Blog.
Our volume oscillators are created using a slight variation of Terry's technique.
Terry uses NYSE up and down volume as reported by MarketWatch.com to compute his
volume oscillator for the NYSE. We look at each individual component stock within
each index (or sector) and determine whether that stock closed above its opening price,
or down from its opening price. If it closed up, we add its trading volume to the
total up volume accumulator; otherwise, we add its trading volume to the total down
volume accumulator. When we have finished processing all stocks for that day, we have
two raw values: total up volume and total down volume for the day. We then apply Terry's
volume oscillator formula to the numbers.
We don't scale the numbers like Terry does for manual plotting simply because
we don't manually plot it, we let the computer plot the oscillator for us.
See Pivot Points for information
on pivot points.
Our bands are shown along with labels for the latest price datum. The label
abbreviations refer to: BEARISH DIVERGENCE
indicates that while higher highs in price were recorded, the indicator
made a lower high. In this case, we would normally look for a top to be
forming in the market and subsequent decline. So, we would be looking for
a sell point.
If neither type of divergence is detected, the
directionality of movement of the indicator determines whether
BULLISH TREND or BEARISH TREND is indicated.
Currently, the analysis is for direction of trend only.
Strength of trend may be anywhere from weak to
strong (no assessment is made of trend strength itself, only directionality).
Prior to the 21st Century, this indicator was computed using
closing volume and price figures. Beginning in January 2000, however,
the calculation is performed on individual, intraday quotes. Intraday
figures are available using
http://gamma.dhs.org/cgi-bin/show_oexdwcpr.
The prior intraday values at 15-minute intervals for the last trading day are displayed using
http://gamma.dhs.org/cgi-bin/show_oexdwcpr?hist=yes.
As the discussion below indicates, when the ratio is "high" (above 2.0)
it indicates overly-bullish sentiment (which may be considered "overbought"); when the
ratio is "low" (below 0.5) it indicates overly-bearish sentiment (which
may be considered "oversold"). However, during strong, trending markets,
these extreme readings may only indicate a strong underlying trend, and thus must be
considered to be useful only in conjunction with other indicators as
confirmation. If the market is rallying, but coming off a deeply oversold
level (based upon other technical and fundamental indicators), extremes in bullish
sentiment will more likely mark the beginning of the move (for instance, 1995
saw very high bullish sentiment readings near the start of that massive uptrend).
On the other hand, if the market is in a trading range, these extreme levels
of 2.0 and 0.5 tend to occur reasonably close to tops and bottoms,
respectively, so may be of particular interest for short term trading.
Another aspect useful for traders: as the market comes into a significant
low, bullish divergence between price action and this indicator can appear.
That is to say, while prices are moving to a new relative low, the indicator
itself may be putting in a higher low as the more savvy traders turn bullish
at the actual low. The opposite condition, bearish divergence, can
occur at tops as well.
In general, in a bull market, extremes of bullishness tend to occur well ahead
(about a week, in fact) of price tops, so bearish divergence is more pronounced at tops.
In a bull market,
trading lows tend to occur within a day or two of extremes of bearishness
on this indicator. Since we haven't enough history to make any definitive
statements about the behavior during bear markets, we won't claim the
obverse, but it wouldn't surprise us if that were the case.
When plotted on the OEX daily price chart, this indicator will appear near the
bottom margin of the price plot window. It will appear in three
different colors: a pair of horizontal, white dotted lines mark the
nominal "overbought" and "oversold" levels corresponding to ratios of 2.0
and 0.5; each day's ratio is plotted as an orange bar pointing
either up or down from the neutral ratio of 1.0. Finally, a yellow
line plots the centered 8-day moving average ratio for each day. Note
that this is a centered moving average, which will lag actual price
action by a half span (4 days). In order to make ratios symetrical
about the neutral level, this plot is logarithmic (as is the price plot itself).
Additional information about this
indicator can be found here.
Bottom Plot: Trend-Adjusted Stochastics
Our trend-adjusted stochastics are explained on
this page.
Bottom Plot: Professional Accumulation
This is an indicator which was described by Larry Williams. It measures
the degree of professional trader buying and selling by accumulating
the movement from opening to closing prices. The theory behind it is
that the public tends to trade on the opening, while the professional
tends to trade on the close. When the line is moving higher, professional
accumulation is taking place; vice versa when the line is moving lower, the
professionals are distributing their positions. In other words, smart money
is buying when the line moves higher or smart money is selling when the line
is moving lower. As is the case with many other indicators, it is bullish
if the price trend is down while the professional accumulation line is
moving up.
Bottom Plot: Volume Oscillator
Additional Indicators on the Top Plot
Bollinger Bands
We put two sets of Bollinger Bands on some charts. If you are not familiar
with this indicator, visit BollingerBands.com
and read John Bollinger's excellent tutorial.
Momentum Studies
Momentum studies, when present, are shown as three lines in the upper
portion of the top (price) plot. Momentum here is defined as the
price rate of change. The zero line is drawn as a red dotted line. The raw momentum
line is drawn in yellow. A moving average of momentum is drawn in cyan.
Look for divergences between price action and momentum studies to help
confirm tops and bottoms. In addition, crossovers between the yellow
and cyan lines are indicators as well: when the yellow crosses under
the cyan line, this indicator is bearish; conversely, a crossing where
the yellow line crosses above the cyan line is bullish.
Computer-Generated Trendlines
When computerized trendline analysis is performed on the charts,
white dotted lines are drawn in both the price and indicator plots
and an English summary will appear
in the middle chart area between the two plots toward the right margin.
(Presently, only the English summary appears on some charts.)
Computer Analysis
BULLISH DIVERGENCE indicates that while lower lows in price
were recorded, the indicator made a higher low. We would then be alerted
to a potential bottom and rally. So, we would be looking for a buy point.
Relative Strength Versus S&P 500 Index
For stock indices (including sector indices) you may see a set of violet- and red-colored
bars running across the top margin of the upper plot (the price window).
If present, the violet bars point up when the index is stronger than the S&P 500 and
the red bars point down when the index is weaker than the S&P 500.
OEX Dollar-Weighted Call:Put Ratio
Our OEX Dollar-Weighted Call-Put Ratio is currently computed
using each OEX option trade. The transaction price is multiplied by the
volume and added to a cumulative total value for puts or calls. The ratio
is computed by dividing the total call dollar-volume by the total put
dollar-volume. Most others compute a put-call ratio, but we like to do it
this way because most technical indicators show "overbought" levels as high
values and "oversold" levels as low values. It thus fits in better with
oscillators, Money Flow, etc. in the charts.
Historical Charts of the OEX Dollar-Weighted Call:Put Ratio
OEX Chart Directory Listing
Triangles represent time ratio projections for turning points on the charts. Additional information about this indicator, as well as its appearance as rendered on the charts, can be found here.