Chip Anderson

What the Heck Have We Been Talking About? Also, What's a Wordle?

Just for fun, here are some "wordle" images for several of our popular blogs.  A "wordle" is an image created by a computer program from the commonly used words in recent blog articles arranged in a interesting - but somewhat random - manner.  Enjoy! - Chip

Chip Anderson:

Wordl-chipa
Don't Ignore This Chart:

Wordl-ditc
Art's Charts:

Wordl-arts

ChartWatchers:

Wordl-cww
The Canadian Technician:

Wordl-canada
and The Traders Journal:

Wordl-journal

 

Fixing Data "Mistakes" with our User-Defined Index Feature

I've written a couple of articles already about our new User-Defined Index (UDI) feature that PRO users currently have (and that we hope to expand to Extra users soon).  The ability to upload time series data and then chart it with our tools is very powerful but here's one of the simplest things you can do with it - you can correct "mistakes" in our data.

We work very hard at providing accurate data for our charts and, from our perspective, our data is as accurate as it can be.  It is verified and validated against multiple sources before it is posted.  If someone reports a problem with our data, the issue is thoroughly investigated and corrections made when appropriate.

Now, all that being said, sometimes people disagree with our data for one reason or another.  A great example of this situation is when an unusal volume spike appears seemingly out of the blue.  Often, unexpected volume spikes are caused by mis-keyed trades or other human errors that for whatever reason are not corrected by the exchanges.  That puts us - StockCharts - in a bind.  We are committed to providing data based on what the exchanges say, regardless of if it "makes sense" or not.

Consider the following chart:

Xinto
(Click here for a live version of this chart.)

That big volume spike on July 31st also exists in the data reported by Yahoo Finance and BigCharts.com.  Given that this is an ETF, there may have been some legitimate end-of-month rebalancing that resulting in that tall bar.  That said, it sure looks suspicious doesn't it?  There was no huge price movement associated with it and both prices and volume continued the next day as if nothing special had happened.

That spike "messed up" our chart's volume display making it much harder to interpret the other volume bars.  It also caused the OBV indicator to drop tremendously (as well as any other volume-based indicator we might want to use).  It would sure help our chart analysis if that spike was removed...

Now, by using User-Defined Indexes, we can remove it ourselves!  Here are the steps:

Step One - Download the price data for the ticker symbol we are interested in

PRO users can download our daily price data by clicking on the "Past Data" link underneath the XIN.TO SharpChart.  The "Past Data" page has a "Download" link that PRO users can use to save the data on their hard disk.

Step Two - Open the downloaded price data in Excel

The downloaded data is in CSV format.  You should be able to simply double-click the file to open it in Excel.

Step Three - Find and fix the data point

Let's change the volume value for July 31st, 2012 to 91332 which is the current value divided by 100 and seems to better match the adjacent volume bars.

Step Four - Save the data as a CSV File

Use Excel's "File/Save As..." command to save the new spreadsheet to your hard disk.  Be sure to set the "Format" dropdown to "Comma Seperated Variables" before hitting the "Save" button.

Step Five - Upload the CSV file into Your @MYINDEX Area

Go to the "User Defined Index Workbench" area of your PRO account and click "Delete All Data" (to clear out any previous data you uploaded) and then click the "Upload Spreadsheet Data" link to start the upload process.  Click "Choose File" then select your saved CSV file and press "Upload" to start the process.

Step Six - Chart @MYINDEX

If everything went correctly, you should see something like this:

Xinto2

That looks much better in the sense that our volume bars are not squashed and our OBV indicator doesn't have that huge drop on it any more.

Of course, your interpretation of a chart that's based on modified data must be tempered by the knowledge that you are looking at unofficial, altered data.  Caveat emptor!

Again, User-Defined Indexes (UDIs) are extremely flexible and powerful.  Next time, I'll show you how you can create your own Bullish Percent Index with them.

- Chip

When Shifting to the Right is Wrong - the DPO Indicator Controversy

(Here's a repeat of an article I wrote in 2010. The information is still relevant today - and the controversy still rages... -  Chip)

Yesterday, we received a question about our Detrended Price Oscillator (DPO) calculations.  The reader wanted to know why our DPO values for SPY where completely different from the DPO values provided to him by two competing websites - FreeStockCharts.com and VectorVest.

The reader was nice enough to provide pictures of the charts he was looking at and sure enough the DPO values were very different from ours.  Not only that, but the entire indicator line looked completely wrong.

Continue reading "When Shifting to the Right is Wrong - the DPO Indicator Controversy" »

Vertical Pixels are Precious - How to Get More

Here's an article from back in 2010 that is just as relevant today as it was back then.  Enjoy!  - Chip

As we try to roll out recent improvements to our site, we are getting some feedback from users that we did not expect.  Basically, some users are reporting that they prefer the pop-up version of ChartNotes because it is in a bigger window than what their web browser can show them.

While I understand and sympathize with this perspective to a certain degree, I also need to clarify that we - and the rest of the web - are moving quickly towards a model where you manipulate your charts from entirely within the regular web page - not from inside a popup window.  It will take us a while to get there, but that is the long-term direction.

Given that long-term direction, the real issue here is "How can I see more of my chart and the SharpCharts workbench on my screen?"  Or, more generally, "How can I get more useful information from any web site onto my screen?"

VERTICAL PIXELS ARE THE KEY

The vast majority of computer displays out there have more dots (pixels) horizontally than they do vertically.  That's unfortunate because many charts (and web pages in general) are taller than they are wide.  This fact means that vertical pixels are precious and should only be "spent" if absolutely necessary.  The more vertical pixels you can use for web browsing, the more useful information you will typically see on your screen.

If you are serious about charting stocks, you really need to spend some time on setting up your computer display so that it maximizes the useful space on your screen.  I'm going to show you a couple of ways to do that which you might be unaware of.  Some are easier than others - and the best one is very simple - but they are all worth looking into and can potentially revolutionize how you use your computer.  

First, I'm going to talk about configuring your computer screen itself, then I'll talk about optimizing your web browser's display.  While this post is a little long, if you stick with it I'm willing to bet that at least one of these suggestions will improve your ability to view our charts.
 

USING THE CORRECT SCREEN RESOLUTION

Many people have their screen resolution set incorrectly.  Serious chart watchers want their screen resolution set as high as their computer supports.  To find out what your current screen resolution is set to you can visit http://www.whatismyscreenresolution.com.

Currently, our website is designed to be used effectively by computers with screen resolutions of 1024 by 768 or higher.

To increase your screen resolution, click on one of the following links and follow the instructions:

By definition, increasing your screen resolution will decrease the physical size of items on your screen - your computer is displaying more dots in the same physical space, thus the size of each dot must get smaller and thus many things (such as text) will appear smaller.  If, after increasing your screen resolution, things are too small for your taste, there are three things you can do:

  1. Increase size of the fonts that your program uses -
    Look for items like "View", "Font Size" or "Zoom" in the program menus.
  2. Get a larger computer monitor -
    Don't rule this out too quickly.  High quality 24" monitors are now selling for as little as US$189.  Isn't better charting worth that cost?
  3. Switch back to a lower resolution -
    There might be an intermediate resolution that works better for you and is still an improvement over your original setting.

OPTIMIZING YOUR BROWSER'S DISPLAY

Now that your screen is set to the highest screen resolution you are comfortable with, we need to make sure that we are "spending" those valuable vertical pixels wisely.  Here is a screenshot that is similar to what we frequently see from some of our users:

IE8wToolbars

This screenshot shows Internet Explorer 8 running in a maximized window on a 1024 x 768 display.  Look familiar?

The good news is that the window is maximized.  Real ChartWatchers usually use maximized windows to view their charts.  The bad news is that there is way too much vertical space "spent" on browser buttons and toolbars.  Of the 768 vertical pixels available on the screen, only 433 are being used to display the web page!  That means that the web browser and its add-ons are permanently taking almost 50% of the available vertical space here.

Let me be clear - you cannot do any kind of serious chart analysis with this kind of set up and we are not going to design our website to accommodate this kind of configuration.

Obviously, in situations like this, a pop-up annotation window will work better than an in-page annotation tool, but again, that misses the point.  The point is to get all of that junk out of your way so you are see as much of the charting page as possible!

There are two solutions here - one that's super easy and one that's harder at first but better in the long run.

Solution #1:  Press F11

On a Windows computer, pressing the F11 key puts both IE8 and Firefox into what is called "Full Screen mode."  In full screen mode, ALL of your vertical pixels are used to display web content.  All of those toolbars and menus and buttons and JUNK disappears and you are left with a wonderfully clean web page to look at and use.  Here's an example:

IE8FullScreen

Compare the amount of chart that we can see in this screenshot with the previous one.

THE TRICK IS TO REMEMBER TO PRESS F11 AGAIN WHEN YOU WANT TO LEAVE.

If you take away one thing from this post, hopefully it will be to use F11 when working with our charts.  (On a Mac, use the "Command-Shift-F" keystroke.)

Solution #2:  Spring Cleaning!

"Do you really need it?"  I'll give you a hint - the answer is "No" - especially when it comes to browser toolbars.  They rarely give you something that your browser doesn't already provide and they eat way too many vertical pixels.  The toolbars that come with the browsers are bad enough but the third party toolbars are downright criminal.  Unless you are 100% sure that you need a toolbar, remove it.  Even if you think you need it, remove it anyway and see if you can live without it for a day.  If you survive, don't look back.

With just a little effort, I was able to get the top screenshot looking like this:

IE8woFavoritesTaskbar

That's now up to almost 90% of the screen being used for actual web content!  Even so, I still have a search box.  I still have tabbed windows.   I still have my favorites (as a popup menu under the "Favorites" button).  I put my Windows taskbar on "Auto-Hide" and it will popup when I move my mouse to the bottom of the screen.  Frankly, I could probably remove the menu bar and not miss it too much - right-clicking gives me access to most things.

Most of this was accomplished by turning thing off using IE's "View/Toolbars" and "View/Explorer Bars" commands.  Firefox users can do similar things with its "View/Toolbars" command.  (To auto-hide the Windows taskbar, right-click on it and select "Properties".)

CONCLUSION

The payoff for freeing up your screen may be subtle at first, but it will grow over time.  Cherish your vertical pixels and only "spend" them when absolutely necessary.  It will greatly improve your web experience not only on StockCharts, but on almost every other web site you visit.

- Chip

User-Defined Indexes Let You Chart Custom Programmed Indicators like DEMA

The new User-Defined Index (UDI) feature that we introduced with our PRO service last week is extremely flexible and powerful.  In the last edition of our ChartWatchers newsletter, I showed how it can be used to chart economic datasets downloaded from the Internet.  Today I'm going to show you how you can use a UDI to plot any technical indicator you can imagine.

OK. Let me say up-front that this is not for the meek or the timid.  You need a spreadsheet program like Excel and you need to know how to use it.  Unfortunately, I'm not going to be able to explain every detail of using Excel in this article; however, if you have some Excel experience under your belt, you should be able to follow along.

What I want to show you today is how you can use the download and upload features of our PRO service, combined with Excel, to calculate a special kind of moving average called "DEMA" - the Double Exponential Moving Average.

First off, the formula for DEMA is as follows:

    DEMA(20) = (2 * EMA(20,close)) - (EMA(20, EMA(20,close)))

(In theory, DEMA is a "better" moving average than a regular EMA. Whether that is true or not is beyond the scope of this article.  As we will see, DEMA does tend to remain closer to the price bars.)

Step One - Download the price data for the ticker symbol we are interested in

PRO users can download our daily price data by clicking on the "Past Data" link underneath any SharpChart of the symbol they are interested in.  The "Past Data" page has a "Download" link that PRO users can use to save the data on their hard disk.

Step Two - Open the downloaded price data in Excel

The downloaded data is in CSV format.  You should be able to simply double-click the file to open it in Excel.

Step Three - Calculate the EMA(20,close) column

Our ChartSchool article on Moving Averages has an example of how to do this.  Basically, use the Average() function for the first 20 rows of data in the "Close" column, then, in the 21st row, add the EMA formula:

    (Today's Close - EMA(previous day)) * multiplier + EMA(previous day)

        where multiplier = 2 / (period + 1) = 2 / 21 = 0.095238

Step Four - Calculate the EMA of the EMA column

This gets a little strange but essentially you need to do the same thing as before, but instead of averaging data from the "Close" column, you use the data in the column from Step Three.  Check out the spreadsheet that I've attached to the bottom of this article if you get confused.

Step Five - Calculate the DEMA column

Now that we have columns for EMA(20) and EMA(20,EMA(20)), we can calculate the DEMA column.  Remember, DEMA(20) = (2 * EMA(20)) - EMA(20,EMA(20)) i.e., 2 times the first column we added minus the second column we added.

Step Six - Copy the Results into a New Spreadsheet AS VALUES!

Now we need to create the CSV file that we will upload into the @MYINDEX area of our account.  We start by using Excel's "File/New" command to create a new, empty spreadsheet.  Next we copy over all of the dates from the "Date" column in our calculation spreadsheet.  Then we select all of the "DEMA" column that we calculated and copy it onto the clipboard.  Finally, we use "Edit/Paste Special" to paste it into the second column of our new spreadsheet.  When "Paste Special" asks us which format we'd like to use, be sure to select "Values" so we are pasting in just the results of the calculation, not the formulas.

Step Seven - Save the Results as a CSV File

Use Excel's "File/Save As..." command to save the new spreadsheet to your hard disk.  Be sure to set the "Format" dropdown to "Comma Seperated Variables" before hitting the "Save" button.

Step Eight - Upload the DEMA Data into Your @MYINDEX Area

Go to the "User Defined Index Workbench" area of your PRO account and click "Delete All Data" (to clear out any previous data you uploaded) and then click the "Upload Spreadsheet Data" link to start the upload process.  Click "Choose File" then select your saved CSV file and press "Upload" to start the process.

Note: Right now, uploading a full data file takes about 4 minutes.  We hope to reduce that time in the near future.  For now, you need to be patient while the data uploads.

Step Nine - Chart @MYINDEX on top of your original stock using the "Price (same scale)" Overlay

Create a new chart for your original stock, then add the "Price (same scale)" overlay to that chart and enter "@MYINDEX" as the parameter for that overlay.

And we're done. PHEW!

If you did everything correctly, you should see something like this:

DEMA

On this chart of AAPL, DEMA is the red line.  I've also included a regular 20-period EMA as the blue line for comparison purposes.  (See how the DEMA line is "faster" than the EMA line?)

So this is a chart of an indicator that WE DO NOT SUPPORT (yet).  That to me is amazing!

So now you are thinking "That's A LOT of steps!" and you are correct.  Over time, the process will become easier but in order to have the full power of Excel in your charts, you need to do what it takes to get the data into and out of it like I showed.

TEMA anyone?

- Chip

 

Click here to download the sample DEMA Excel Spreadsheet (1MB) used in this article.

The Skinny on StockCharts' Skins

Another great new feature we released this week are our new workbench "skins."  Skins are optional color combinations that apply to the entire page, not just the chart.  Currently, we have skins for our "Dark" color schemes - Dark Amber, Dark Blue, Dark Gray and Dark Green.  Here's an example of a page with the Dark Blue skin:

Screen Shot 2012-08-14 at 2.43.44 PM

(Click on this image a couple of times to see it "full scale".)

In order to use skins, you first need to create a chart with one of the "skinable" color schemes mentioned above.  You then need to check the "Skin" checkbox that should appear next to the "Inspect" checkbox at the top of the chart.

Here are a couple of other important things to remember:

  1. Currently, skins work great in Firefox, Chrome, Safari and Opera.  They look good (not great) in Internet Explorer.  We haven't tested them in other browsers.
  2. The skin checkbox is currently not "sticky" - i.e., you have to click it each time you change charts.  We also hope to have that fixed soon.
  3. Finally, we intend to add skins to all of our color schemes soon - not just the Dark ones we have now.

Again, skins are optional but a fun way to change the look of our main charting tool.  Enjoy!

- Chip

Nice Curves for StockCharts Charts

Check out the cute curves on this "little number":

Sc

Those three lines were created with our new Parabola tool that we added to the Flash version of our ChartNotes annotation tool last weekend.

(The red curve was added for fun - just to complete the "smiling face" look on the chart!)

A parabola is a curve created from three points - one at each end of the line and one at the top/bottom of the curve.  By moving the three points around, you can stretch a parabola into any curve that you want.

To create a parabola using ChartNotes, click and hold down your mouse over the "Line" tool button near the top left corner of the ChartNotes window.  When you do that, two additional line drawing tool buttons will appear, one for our "Speed Lines" tool, and below that, the one for our Parabola tool.

After clicking the Parabola tool button, you can draw a parabola in one of two ways.  You can either click and release your mouse at each of the three points that make up the curve OR you can do it the "fun" way -  you can click and drag your mouse to create an "approximate" parabola that we will then replace with a real parabola as soon as you release your mouse button.

Parabolas are prefect for annotating things like rounding bottoms and cup-with-handle patterns but I bet there are lots of other great uses for them that you will find over time.  Enjoy!

- Chip

Updated: Creating Filled Boxes is Harder Easier (and Better) than Ever!

Aug-14 Update:  CTRL+Drag now works as a shortcut to create a filled rectangle with 33% opacity. (CMD+Drag for the Mac).  Keep reading for more info on other rectangle settings...

Continuing our week of great new features, we just released a big update to the Flash version of our ChartNotes annotation tool.  There are several amazing new features in this new version which we will be blogging about and documenting in the next couple of days.  I wanted to start with the new features we've added to rectangles.

You can now create rotated rectangles (great for pointing out trends).  You can also fill the rectangles just like before (called XOR mode) or fill them with a solid color.  You can round the corners.  Finally, you can control the opacity (aka, transparancy) of the filled rectangles.  Here is a chart with some examples:

Sc

The first thing you need to know to create these boxes is that - after drawing/selecting your rectangle - you need to click the "(+)" symbol in the upper left corner of the ChartNotes window to open up the various rectangle settings.  You'll see boxes that allow you to set the color, fill type, opacity, and corner types.

The second thing you need to know is that to rotate a rectangle, you first select it, then hold down the CTRL key, then click and drag one of the yellow handles that appear.

Stay tuned for more on ChartNotes' new features - or start exploring if you can't wait!

- Chip

 

Alert! Alert! StockCharts.com Now Has Technical Alerts!

Today I'm thrilled to announce the addition of Technical Alerting to StockCharts.com.  We are starting off by providing everyone with a collection of common, interesting predefined alerts such as Bullish and Bearish MACD crossovers for the major stock averages.  In a couple of days, we will be expanding our alerting capabilities so that Extra members can create their own alert criteria.

A technical alert is a set of conditions that is checked several times each minute.  If the conditions are found to be true, the alert's owner is then notified in one or more ways.  Currently, we can notify people using the following methods:

  1. A web page that contains the current status for all alerts.
  2. An email notification
  3. A Twitter tweet
  4. A RSS feed notification

The criteria for custom technical alerts are essentially identical to our advanced scan criteria. You'll just need to specify an additional "alert condition" and a "notification action."  If you are familiar with using our Advanced Scan workbench, creating custom alerts will be a piece of cake.  Extra members will initially be able to create 5 custom alerts each.

Again, custom alerts will be released in a couple of days.  For now, you can checkout our Predefined Technical Alerts page to see those alerts in action.  This is analogous to the Predefined Scans page that we maintain for scan users - i.e., you can't change any of the alert criteria, but you can watch them in action.

The predefined technical alerts page allows to to see the alerts in two different ways - Summary view and Timeline view.  The Timeline view gives you a sense of when clusters of bullish and bearish alerts happened in the recent past.  Here's what it looks like:

Alertimeline

Click here to see the live version of the Alert Timeline page.  Links to the regular alert page can be found on our homepage, just under the "Predefined Scans" link on the right side of the page. 

Twitter users that follow our @stockchartscom Twitter feed will see tweets from us whenever one of our predefined alerts occurs.  The tweets will have the hashtag #sccalert as well.

Alerts are an extremely important tool for active technical traders.  We are confident our alerting system will be the most powerful web-based system out there.  As we deploy it and document it over the next week or so, please let us know what you think.

Enjoy!
- Chip 

 

New Inspector with "Measuring Stick" Feature

We've just updated the "Inspector" feature on our SharpCharts workbench.  Now, when the "Inspect" box is checked, you will automatically see the databox and, if you click and drag, you will get a measuring stick-like ruler that shows you both the percentage and absolute change between any two points on your chart.  Here's a screenshot of the measuring stick in action:

NewInspector

In this example, I clicked my mouse just below the 187.5 level and dragged it upwards to just above the 200 level.  The white box on the left side shows me that the distance I measured was a 7.0% increase (or 13.13 points).

Note: With some browsers, you may need to click and release your mouse on the chart once before you click and drag in order to get the measuring stick to work.

What's that you say?  You don't like the databox floating all over the chart?  Simply hold down the CTRL (CMD on a Mac) key and it will disappear.

What's that you say?  You want the thin-line crosshairs instead of the bar-wide version?  Simply hold down SHIFT and the crosshairs will get skinny for you.

This is the first of many changes that we will be rolling out over the next couple of days in the lead up to ChartCon 2012.  Stay tuned - your StockCharts.com account is about to get even more powerful!

- Chip