TradeStation’s platform is famous for letting customers build their own tools. It also provides a series of calculated indexes for advanced technical analysis.
Today’s article will cover some of these indicators, which may be especially useful for assessing market internals.
TradeStation’s servers constantly monitor indexes like the S&P 500, Nasdaq-100 and Dow Jones Industrial Average. They track items like the number of stocks making new highs and lows, companies above moving averages and advancing/declining issues. The data is made available with proprietary symbols available on charts and RadarScreen. See the tables below for more.
Customers can use these tools to confirm moves in the underlying index. For example, if fewer stocks make new highs as prices rise, it could suggest the uptrend is weakening.
Showing Highs & Lows
Let’s begin with a chart of the SPDR S&P 500 ETF (SPY) and the number of companies making new 52-week highs and new 52-week lows:
- Click on the Apps menu and select Chart Analysis. When it appears, type “SPY” and hit enter.
- Click the Timeframe button on the top left of the chart and select “Daily.” This ensures you are viewing daily bars.
- Click the Data button on the top right of the chart and select “Add Symbol.” Enter this symbol: $52WHSP
- Click the Data button on the top right of the chart and select “Add Symbol.” Enter this symbol: $52WLSP
The indexes will likely appear in two separate subgraphs at the bottom of the chart. TradeStation may plot them with candlesticks, but simple line charts may be more appropriate. To make the change:
- Double click on one of the lower charts and a Customize Symbol dialog box will appear.
- Click on the Style tab on the left.
- Go to the “Bar” menu near the top and select “Line on close.”
- You can also change the color of the chart.
- Click on the Scaling tab to the left. This controls the subgraph (how far below the main chart)
Follow these steps for both $52WHSP and $52WLSP. Set them both to “Line on close” but give them different colors. Also make sure they are assigned to the same subgraph using the Scaling tab.
|$52WHSP||Number of S&P 500 Stocks Hitting New 52-week highs|
|$52WLSP||Number of S&P 500 Stocks Hitting New 52-week lows|
|$52WHND||Number of Nasdaq-100 Stocks Hitting New 52-week highs|
|$52WLND||Number of Nasdaq-100 Stocks Hitting New 52-week lows|
|$52WHRL||Number of Russell 2000 Stocks Hitting New 52-week highs|
|$52WLRL||Number of Russell 2000 Stocks Hitting New 52-week lows|
|$52WHI||Number of Dow Jones Industrial Stocks Hitting New 52-week highs|
|$52WLI||Number of Dow Jones Industrial Stocks Hitting New 52-week lows|
Moving Average Indexes
Another method considers stocks in relation to moving averages to assess the market’s strength. We’ll use TradeStation indexes showing the number of S&P 500 companies above their respective 20- and 50-day moving averages.
Begin with a daily chart of SPY as above. But add these two symbols instead: $20DMAASP and $50DMAASP. Follow the same steps with adjusting the chart type, colors and subgraphs.
Some traders may find this analysis useful because crosses of the 20-day MA total line above or below the 50-day MA total line often precedes directional changes in the broader market. (Remember these aren’t the moving averages for the overall index, but the number of member companies above or below those lines.)
|$20DMAASP||S&P 500 Stocks Over 20-day MA|
|$50DMAASP||S&P 500 Stocks Over 50-day MA|
|$200DMAASP||S&P 500 Stocks Over 200-day MA|
|$20DMAAND||Nasdaq-100 Stocks Over 20-day MA|
|$50DMAAND||Nasdaq-100 Stocks Over 50-day MA|
|$200DMAAND||Nasdaq-100 Stocks Over 200-day MA|
|$50DMAARL||Russell 2000 Stocks Over 20-day MA|
|$50DMAARL||Russell 2000 Stocks Over 50-day MA|
|$200DMAARL||Russell 2000 Stocks Over 200-day MA|
|$20DMAAI||Dow Jones Industrial Stocks Over 20-day MA|
|$50DMAAI||Dow Jones Industrial Stocks Over 50-day MA|
|$200DMAAI||Dow Jones Industrial Stocks Over 200-day MA|
Advance Decline Line
Another use of calculated indexes is advance/decline analysis, a common tool for measuring market breadth.
Begin again with a daily chart of SPY. Then follow these steps:
- Add these two symbols: $ADVSP and $DECLSP
- Customize both symbols. Go to to the Scaling tab and change the subgraph to “Hidden.”
- Click on Studies → Add Study. A dialog box will appear. Select “Advance Decl Line” and click OK.
This might be a little more complicated because the indicator uses the two symbols added in step 1. To make sure they are correctly assigned to the indicator, click on Data -> Edit Symbol. This will display the symbols in the chart and their respective data identifiers. Notice how SPY is Data1, $ADVSP is Data2 and $DECLSP is Data3.
Now right click on the indicator in the lower study and select “Edit ‘Advance-Decl Line.'” Follow the Inputs tab to the left. Make sure the data number for $ADVSP is assigned to AdvIssues and $DECLSP is assigned to DecIssues.
You can now see the performance of SPY with the advance/decline line at the bottom. This may help confirm or cast doubt doubt on moves in the broader market.
Using Different Indexes
There’s one more thing about the advance/decline line: TradeStation has different advancing and declining indexes for the various benchmarks. Users may want to reference this table when analyzing others like the Nasdaq-100:
|Dow Jones Industrial Average||DIA||$ADVI||$DECLI|
Standardized Performances for ETFs mentioned above
|ETF||1 Year||5 Years||10 Years|
|SPDR S&P 500 ETF (SPY)||-9.25%||+45.87||+161.37%|
|Invesco QQQ (QQQ)||-15.35%||+76.56%||+339.92%|
|iShares Russell 2000 (IWM)||-7.45%||+25.16%||+107.98%|
|SPDR DJ Industrial Average (DIA)||-3.76%||+30.52%||+132.80%|
Exchange Traded Funds (“ETFs”) are subject to management fees and other expenses. Before making investment decisions, investors should carefully read information found in the prospectus or summary prospectus, if available, including investment objectives, risks, charges, and expenses. Click here to find the prospectus.