Regular readers of my analysis know that I frequently refer to the Starc bands.
This scan determines which of the Dow stocks are closest to their monthly starc bands.
The weekly chart shows that QQQ is right in the middle of its weekly Starc bands.
Since then, SPY has been range bound and is midway between the weekly Starc bands.
He was the developer of the starc bands that I frequently use in my analysis.
Some internet postings claim that Starc bands are similar to Bollinger bands, but this is not the case.
For example, I use starc bands to tell me when not to buy and when to wait.
The daily high was well above both the weekly and monthly Starc bands.
For over 20 years, I have used two primary technical tools to measure both volatility and risk: Bollinger bands and Starc bands.
Occasionally, prices will stay outside of the Starc bands for several bars.
My favorite way to measure whether a market is overbought or oversold are Starc bands, as they can often alert us to price extremes.
Starc bands are available on many forex trading platforms as well.
Therefore I was anxious to look at my monthly and weekly scan of stocks where they are ranked relative to their upper and lower Starc bands.
By combining two proven indicators, Starc bands and the Relative Strength Index (RSI), traders can gain invaluable confirmation that can help prevent those dreaded, impulsive losing trades.
The Starc bands identified several additional range trade opportunities throughout the summer (points 4, 5, 6, and 7), as the upper and lower Starc bands were tested.
In my regular Charts in Play feature, favorite tools that I always use and frequently mention are Starc bands, as developed by the late Manning Stoller.
Therefore, traders or those not long GLD could get a good entry point next week, and the hourly Starc bands may help in identifying that entry point.
By looking at the Starc bands, as well as the doji (a sign of indecision), traders might have avoided jumping in on the long side at that time.
The May-through-September trading in SLV is a good example of how the Starc bands can be helpful tools and also illustrates some of the differences between these two indicators.
On the hourly chart I have also added the starc bands as it provides a multitude of good examples of how these bands work in any time frame.
Simply watching the VIX has failed traders in recent years, and technical tools like Bollinger bands and Starc bands have proven to be more effective measures of volatility and risk.
The beauty of the Starc bands is that they are one of the few indictors than can give you an objective reading on whether it is a high- or low-risk time to buy or sell.
When I look at a stock or ETF on which I want to take a position, the relationship of the price to the weekly and daily Starc bands plays a key role in deciding whether or not to take that position.
The table below lists ten Dow stocks that closed below the weekly Starc- bands.
Typically, closes below the weekly Starc-bands are followed by either a rebound or some sideways price action.
In early September, I focused on those Dow stocks that were the closest to their Starc- bands.
The major market averages are oversold on a number of levels, and most are currently below their weekly Starc-bands.
It shows that SPY spent most of last week below the Starc- bands, which has not happened since May 2010.
The group has been close to the weekly Starc- bands over the past several weeks, which increases the chances of a rebound.
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