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AIQ Market AI signals a 100 rating to the downside

expert rating, expert system, market timing
Artificial Intelligence Market Signal issues a 0-100 to the downside on June 10, 2016
AIQ TradingExpert AI signals are designed to anticipate changes in the direction of price movement.  Some are accurate and some are not.  However, more often than not, the Expert Rating signals are accurate.  The strongest level of confirmation for market timing signals like this 0-100 down on June 10, 2016 can be found by examining one of TradingExpert’s other market indication components. 

One possible confirmation of market timing signals (Expert Ratings of 95 or greater) is the the Up/Down Signal Ratio, on the Weighted Action List (WAL), an AIQ report.  A Signal Ratio of 85 or greater in the direction of the signal could be viewed as significant, as the AI system used for stocks is completely separate in terms of expert system knowledge base and data, and share no information or expert rules with the market timing system. 

The image below is taken from the AIQ Reports Daily Market Log. This report pulls elements from various parts of TradingExpert. You’ll notice the 0-100 down signal  on DJIA on 6/10/2016. Just below that is WAL 5-95. This is the Up/Down Signal Ratio from the Weighted Action List (WAL) in this case using SP500 stocks. This 5-95 confirms that 95% of the SP500 stocks have down signals according to the stock expert system.

The Access Plot area on the right gives a bullish/bearish consensus for the SP 500 stocks using 16 technical indicators.

The two independent components of TradingExpert are in agreement calling for the market to move in the same direction. This is a very powerful type of validation, both the equity and market timing systems have signaled a change in market direction at the same time.

While no system is perfect, it is interesting to note the previous 0-100 market timing signal occurred December 8, 2015 prior to the correction at the start of 2016.

Inverse Head and Shoulders on the market?

chart patterns, indexes, market timing
There was an interesting Inverse Head and Shoulders pattern completed last night on SPY. As SPY is the proxy ETF for the S&P500 index, it caught my attention. A closer look at the Chart attached shows this pattern usually breaks out to the upside.
Analysis of the supplementary information clearly shows that the uniformity of this inverse head and shoulders is good, however the overall quality of the pattern is only average. The biggest issue is the lack of volume and lack of power of the breakout. The volume is particularly low. More volume is needed before this pattern is confirmed, particularly on a strong up day.

Learn more about Chart Pattern Recognition for TradingExpert Pro  http://aiqsystems.com/chartpatterns.htm

Classic Flag Breakouts on CVX, NFG, TOT

chart patterns, stock market, Stock trading

Our Chart pattern Recognition tool had a wealth of gasoline related stocks have breakouts yesterday. The classic flag breakout on good volume could be seen on CVX, NFG and TOT.

Quick reminder on what a flag pattern is.

The flag pattern is considered a continuation pattern after a consolidation period. The flag is a rectangular shape, similar to  the pennant, but the pennant looks more like a triangle.

Usually there’s a strong price movement followed by sideways price movement which is the flag. The pattern is complete when prices breakout in the same direction as the initial price movement. The following move will be in the same direction as the prior sharp move. The move prior to the flag is called the pole.

The flag pattern forms a rectangle with two parallel trendlines that act as support and resistance for the price until the price breaks out. Usually the flag will slope in the opposite direction to the trend.

The buy or sell signal occurs when the price breaks through the support or resistance level, with the trend continuing in the same direction as the pole. The breakthrough should occur on heavier volume.

I’ve put all three charts together and you can clearly see the pole, flag and breakout. As noted above the volume on the breakout on TOT was reasonable. The Quality of the pattern was also considered high.

Incidentally the volume on NFG and CVX was not as significant.

The entire list of stocks that generated completed flags in our nightly report on 5/25/16 is below.

and check out this new video that shows how we automate this reporting every night using the Chart Pattern recognition plug-in for TradingExpert.

Tired of staring at charts time and time again? We have an app for that

chart patterns, stock market, Stock trading
Tired of staring at charts time and time again, not certain what is setting up?
Check out this chart of FITB, Fifth Third Bancorp, How would you have traded this over the last 6 months?
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What if you had a tool that shows you the exact pattern that’s setup AND includes the direction the breakout is likely to be? A tool that generates a report every night of chart patterns that have completed and are breaking out. 
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 Wouldn’t that simplify your trading?
Check out this completed falling wedge pattern from 02/12/16. You would have been alerted to this breakout on 2/12/16, the direction indicator suggested that prices will rise and they did.
Check out this completed falling wedge pattern from 02/12/16. You would have been alerted to this breakout on 2/12/16, the direction indicator suggested that prices will rise and they did.
 
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Or this inverse head and shoulders on 3/1/16, the direction indicator suggested prices would rise and they did.
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and check out this new video that shows the most recent price pattern we were alerted to on FITB on 5/13/16 AND how we automate this reporting every night.

Trading Gap Reversals

EDS, Stock trading, Stocks & Commodities traders tips
The AIQ code based on Ken Calhoun’s article in April 2016 issue of Stock & Commodities Trading Gap Reversals”, is provided below. 
AIQ has also posted the EDS file at “ is provided for downloading at 
Save this file to your/wintes32/EDS Strategies folder.
Since I mainly work with daily bar strategies, I wanted to test the gap-down concept on a daily bar trading system rather than on one-minute bars. I set up a system that buys after a stock has gapped down at least 10% in the last two days and then trades above the high of the gap-down bar. The entry is then at the close of that bar. For exits, I used the built-in exit, the profit-protect exit set at 80% once profit reaches 3% or more combined with a stop-loss using the low of the gap-down bar and also a time exit set to five bars. 
I then ran this system on the NASDAQ 100 list of stocks in the EDS backtester over the period 12/31/1999 to 1/11/2016 (Figure 7). The system generated 303 trades with an average profit of 1.09% per trade with a reward-to-risk ratio of 1.35. Slippage and commissions have not been deducted from these results.
Sample Chart
FIGURE 7: AIQ. This shows the EDS test results for the example system.
Again, the code and EDS file can be downloaded from www.TradersEdgeSystems.com/traderstips.htm, and is also shown below.
!TRADING GAP REVERSALS
!Author: Ken Calhoun, TASC April 2016
!Coded by: Richard Denning 2/1/2016
!www.TradersEdgeSystems.com

!INPUTS:
GapSize is 10.
GapLookBack is 5.
MaxBars is 5.

!CODING ABBREVIATIONS:
H is [high].
C is [close].
C1 is val([close],1).
L is [low].
O is [open].

GapD is (O / C1 - 1) * 100.
GapOS is scanany(GapD < -GapSize,GapLookBack) <> nodate()
  then offsettodate(month(),day(),year()).
Hgap  is valresult(H,^GapOS).
Lgap  is valresult(L,^GapOS).
SU if  scanany(GapD < -GapSize,GapLookBack).
SU1 if  scanany(GapD < -GapSize,GapLookBack,1).
SU2 if  scanany(GapD < -GapSize,GapLookBack,2).
LE if ((SU1 then resetdate()) or (SU2 then resetdate())) 
 and H > Hgap.
ExitLong if {position days} > maxBars
 or C < Lgap.
EntryPr is max(O,Hgap).
List  if C > 0.
—Richard Denning