A Pretty Useful Tool

For those of you using TeleChart, Stockfinder or TC2000, if you don't already have this screen and you want it, email me. This is one of the most successful moving average crossover systems I've tested (most moving average cross-over systems are subject to numerous false signals).

If you want any of the above charting platforms and would like to use any of my indicators, just click the links below to Worden. If you have individual questions on any of the platforms, just email me. I've been using TeleChart for 10 years and have used StockFinder and TC2000 (as I'm a Worden affiliate) before the platforms  even became public.

Here's an example with USO

In the top window is a 10 day m.a. (yellow) a 22 day m.a. (blue); in the middle window is a custom cumulative indicator (yellow) and a 22 day average of the indicator (blue) and the bottom window is RSI 14 using Wilder's smoothing, I also added a MACD histogram on invisible to get the 0/50/100 scale for RSI readings.

It's a simple system, a crossover in the top/middle windows and RSI>50= a long position, just reverse that for a short position. This screen does more then just help you avoid false signals though, it also tells you when the stock is starting to break down (RSI may cross below 50 or one of the top 2 windows will cross back over) and it provides price targets for pullbacks.

Early in the week, as a matter of fact I believe it was last week, I published my target pullback for USO, it was at the yellow 10-day moving price average which is also where the 22 day is as well. USO pulled back exactly to that level, TWICE! Since then USO has moved off that level.

If you have sen this screen before then you know the rules and the expected pullback areas. As you can see, USO started a new move up on 3/16. With any new/first time move up, our expected first pullback is to the yellow 10-day price moving average. When the stocks starts a new leg up, the second pullback is generally a bit deeper, between the 10 and 22 day average. Subsequent pullbacks should hold the 2 day moving average for the most part with a few exceptions. 

I've been using this set up for about 6 years now and it has a high degree of success. If you don't have the Worden platforms that allow you to create the custom indicator in the middle window, you can still get decent results using any charting package with just the price moving averages and RSI.