5/10 Indicators, Revised

I've revised my indicators to include more inflation, and to get rid of data that's only useful within a few days of a price-channel breakout.

I've added the macd histogram and a volatility indicator (iv-sv) that compares the implied volatility of options to the statistical (or historical) volatility of the underlying exchange-traded fund.

And I've removed the breakout date, level, initial stop/loss and two-day rule status. That information will be included in Top Prospects when an indicator goes to bull or bear phase, but otherwise it's simply a waste of pixels.

The "iv-sv" volatility indicator is explained below the tables. I want to stress that this is no way a bull/bear thing -- that's why I've avoided the green/red color coding.

Instead, it's a matter of whether you want to buy calls and puts or sell calls and puts; generally, options traders want to buy low volatility and sell high volatility.

But volatility itself is agnostic as to direction.

What's high and what's low? They're relative terms, and whole chapters of very dense books have been written to discuss the question. Since I'm a rapid trader, I need a simple indicator, and the relationship of the implied volatility to the statistical volatility provides an answer.


Stocks

sym	phase	adx		psar	macd	iv-sv
SPY		13
QQQ		17
VIX		15

Bonds

sym	phase	adx		psar	macd	iv-sv
TLT		20
JNK		10

Tangibles

sym	phase	adx		psar	macd	iv-sv
USO		31
GLD		25

Global

sym	phase	adx		psar	macd	iv-sv
UUP		23
EEM		16

Indicator Exchange-Traded Fund Symbols:
EEM - emerging markets
GLD - gold
JNK - high-yield corporate bonds
QQQQ - Nasdaq 100 index
SPY - S&P 500 index
TLT - Treasury long-term bonds
USO - crude oil
UUP - U.S. dollar index
VIX - fear index


Key

• chan: 55-day price channel phase, with green for bull trend, red for bear trend and yellow for neutral trend. I use the base rule for phase changes: A 55-day channel phase continues until the price has crossed beyond the opposite 20-day channel boundary.
• adx: Average direction index location, indicating the strength, or the temperature, of the trend. Orange for 40 or greater, aqua (light blue) for 30 and up but below 40, magenta (light purple) for 20 and up but below 30, and brown for anything below 20. (Mnemonic: Orange for the overhead sun, blue for the surrounding sky, magenta for sunset on the horizon and brown for the earth.)
• psar: The parabolic sar, either green for bullish or red for bearish.
• macd: The macd, either green for bullish or red for bearish.
• iv-sv: Implied volatility less statistical volatility (also called historical volatility). Light blue if implied volatility is greater than and magenta if less than historical volatility. Orange suggests net long positions will be more profitable (both bull and bear), and blue suggests the greater profit lies in short positions.

About channel analysis

Read a detailed explanation of my channel analysis method, including trading rules.

Disclaimer

Tim Bovee, Private Trader tracks the analysis and trades of a private trader for his own accounts. Nothing in this blog constitutes a recommendation to buy or sell stocks, options or any other financial instrument. The only purpose of this blog is to provide education and entertainment.


No trader is ever 100 percent successful in his or her trades. Trading in the stock and option markets is risky and uncertain. Each trader must make trading decision decisions for his or her own account, and take responsibility for the consequences.