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A Stock Alerts R.C. Allen System
Stock signals: alerts of R.C. Allen's Triple Moving Average Crossover strategy. 
These system alerts are posted free on this site.  Reports are fresh daily.
  
 
 
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The R.C. Allen 4-9-18 Moving Average Crossover Discipline
Its Signals & Alerts
 

On this page we provide a portion of the output of R.C.Allen's alert system.  The complete list is reserved for subscribers.  We also have other alert systems.  For example, you may see a description of the alerts currently included in the StockAlerts subscription, by clicking on Current alert list.

Allen's original system is also being demonstrated on the "Market Review" page.  To get a short summary or to order a subscription click on the "Products & Prices" link (third from the top) on the top left of your screen.  R.C. Allen's system is a complete buy and sell system. 

Alerts are alerts.  They are not "buy" or "sell" signals.  An alert means "analyze this."  When one of our screens flashes an alert, it means only that certain setup conditions have been satisfied.  It does not mean that all setup conditions are satisfied for a purchase or short sale.  Inasmuch as an alert means only that a single set of conditions has been satisfied, the logical response to an alert is to make a visual inspection of the stock’s chart.  Look for reasons to avoid taking action.  For example, if the alert is an "Up Alert," look for reasons to avoid buying.  One reason would be overhead resistance not far above the current price.  If you can find anything that makes you wary or uncomfortable, it would be rational to walk away.
 
Here we identify a few of the stocks (listed below) in our stock universe that have generated a signal according to R.C. Allen's 4-, 9-, and 18-day triple moving average crossover system.  The stock list we scan includes thousands of stocks (see "Trading This System" below).  The system featured here was made popular by R.C. Allen (How to Build A Fortune in Commodities) as an effective tool for trading both stocks and commodities.  However, even R.C. Allen did not consider the signals generated by his system to be "buy" or "sell" signals in their own right in isolation from their context.  He simply argued that the commencement of a trend could be traded correctly by waiting for these averages to align themselves in a particular way.  It may help to think of these averages as currents of momentum.  When the "momentum currents" build to a certain level, an alert is generated.  There is a specific alignment for the commencement of a downtrend and another specific alignment for the commencement of an uptrend.  Of course there are considerations other than these alignments.  You should make a record of any of the following stocks that you think are worth monitoring because this list changes quickly.    

. Please Note
Some people consider these alignments, when complete, to be buy and sell signals rather than "alerts."  They act on them without question, and consider any false moves as merely the cost of doing business.  Others prefer to think of them as "alerts."  For them, a buy or sell may be called for immediately, but sometimes they prefer a subsequent "trigger event."   A "trigger event" might be another price move in the crossover direction.  However, after an alert is generated, it may take up to a week or more for a "trigger event" (buy or sell signal) to develop.  If your strategy is to wait for a subsequent trigger event and two weeks go by without one, we would suggest that it is time to "walk away" from that situation.  When our own traders are waiting for a trigger event, they consider the setup to have failed if the trigger event does not materialize within two weeks.
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One System Among Several Systems
The "character" of market behavior is in a state of flux.  There will be times when none of the "setup" alerts reported by a particular alert system are attractive.  In fact, an individual alert system can perform poorly for months at a time.  When that happens, even generating new lists every day can be of little help in finding stocks that actually surge after the alert is generated.  That's why we personally use a variety of alert systems.  When one system isn't working, another may be generating alerts after which the stocks follow through with spectacular surges in price.  Our hope is that you will eventually come to see the advantage of having an arsenal of "idea-generators" that can keep you well supplied with good ideas most of the time.  The R.C. Allen 4x9x18 crossover system featured here complements the other systems included in our StockAlerts subscription.  For example, when it's working well, R.C. Allen's system can give earlier entries and exits than the 5x10x20 system.  At other times, the somewhat slower approach of the 5x10x20 system may yield better results.  We think the best results can be obtained by using a variety of alert systems as part of a disciplined approach to finding stocks for your watch list.  When one system is not working well, there is often another that is.  Monitoring a variety of systems and the way their setups evolve is how a person can discover which system to place the most emphasis on at a given time.    
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The lists provided here are intended to be a kind of "teaser" to encourage you to "upgrade" to a subscription.  Subscriber lists of R.C. Allen setups are ranked according to the magnitude of the volume surge on the day of the signal.  The top 30 R.C. Allen crossover signals are posted for subscribers daily.  However, the lists posted here consiste of stocks taken from below the top 30 stocks (based on magnitude of volume surge) that are on the subscriber's list.  We select for display on this page up to a maximum of 10 stocks (numbers 32 to 40) from our master list of R.C. Allen Alerts.  If two stocks generate an R.C. Allen crossover alert at the same time, the stock that had the greatest surge in volume at the time of the crossover is the one most likely to follow through with a continuation of the move.  However, you should be able to find some pretty good ideas here occasionally.  Consider them to be our gift to you for visiting our site.  
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Want to know about the timeliness of these alerts?  Click on New or Old?
We have added hundreds of ETFs to our master stock list so that subscribers will have a greater variety of opportunities for investment.  Most but not necessarily all ETFs on our master list have the letters ETF after their names to differentiate them from stocks of individual companies.  On this Web site, "ETF" is used as a broad generic label.  Therefore, Vipers may also have the letters "ETF" added to their names.  Most but not necessarily all ETNs are labeled as ETNs.  ETFs trade just like any other stocks.   Some ETFs are inverse (they go up when the underlying securities in them are going down).  Therefore, if the market is bearish, the number of ETFs included in our scanner reports may increase significantly (because they will be rising or undergoing a positive setup pattern).  The inclusion of ETFs increases the odds that at any given time there will be purchase candidates, whether a person is bullish or bearish.  If your investment approach does not include ETFs, simply ignore any stock with the letters ETF after its name.
  
The yellow strip at the top of the table below has data (minus name and symbol) for the stock with the greatest surge in volume (see Vol%).  It may be rising or declining.  The top 30 alerts are reserved for subscribers.  Ten locations on our master list are sampled below the top 30 on the subscruber's list.  The results are displayed below.  A blank space will appear whenever a stock with an alert does not exist at the location sampled.  If there are no more than 30 stocks generating an alert on the master list, all rows in the table below will be blank.  First-time viewers should read the notes below the table.  The stocks listed here are arranged so those with the greatest surge in volume are at the top of the list, just as they are on the subscriber's lists.  Stocks are eliminated from the list if their volume has a negative change.  Below the table (in the yellow strip), we have noted the number of "Up" and "Dn" crossover alerts there are on a subscriber's list.
NOTICE:  There has been a change (read the above for details).  Before, we used random number generators to choose which stocks with an alert to display (omitting a select group reserved for subscribers).  That resulted, most of the time, in a list of 4 to 5 stocks.  Now, all stocks with an alert and that that rank below those on the subscriber's list are displayed (up to 10).  Sometimes, depending on market conditions, this may result in none being on display, but there will often be ten stocks on this list.  We think this approach will usually provide significantly more candidates for your review most of the time.  We think you will find some interesting picks here.  Just because a stock is not in the top 30 because its volume did not surge enough to make the list, does not mean it is undesirable.  Remember, the stock would not be on this list at all if it had not generated an R.C. Allen signal.
The Latest R.C. Allen Report

The Latest R.C. Allen Report

This Scanner Result Obtained by Using a Minimum Volume Surge Requirement of 0%
Updated Fri p.m. After Close  Sym    Price               VolumeVol% RSI 4-Day MA Alert
Alert With Max Vol Surge Not Named XXX 3.23 4,508,000 3695 42.5 Falling Dn Alert
   
   
   
   
   
   
   
   
   
         
  CrossoversUp: 16 Dn: 13

For a brief summary of the main features and an opportunity to order a subscription, click on the word "Summary" in blue text. Summary

 

NOTICES

Because we are no longer registered investment advisors, we do not make personal investment recommendations. We do NOT recommend that any individual use this trading system for his or her own account. We also do not recommend AGAINST using this system. That is a matter to be decided on by you personally (perhaps with the help of a licensed professional securities consultant). If you use the system and the postings made here, you do so at your own risk.

 

The Alert System Used Here

1.) An "Up Alert" means that the 4-day MA is above the 9-day MA and the 9-day MA is above the 18-day MA. --- If a stock is rising, its shorter moving averages will move up faster than its longer moving averages. Waiting for all moving averages to align correctly gives time for momentum to build, and it helps a potential buyer avoid some false starts. This is one of the ways the strategy incorporates discipline. The alert to a possible "buy" signal occurs when the 4-day moving average crosses above the 9-day moving average. The actual buy signal occurs when the 9-day moving average crosses above the 18-day moving average while the 4-day moving average is still above the 9-day moving average. If at the time the 9-day moving average crosses above the 18-day moving average, the 4-day moving average is below the 9-day moving average, there is no signal unless and until the 4-day moving average crosses back above the 9-day. Conversely, a "Down Alert" means that the 4-day moving average is below the 9-day moving average and the 9-day moving average has just crossed below the 18-day MA.

2.) Furthermore, an "Up Alert" means that the 9-day moving average was below the 18-day moving average on the previous day. --- This implies the stock was recently declining and may be just beginning to rise. Here, the idea is to catch a stock at the beginning of a new trend. A "Down Alert" means that the 9-day moving average was above the 18-day moving average on the previous day. This implies the stock was recently rising and may be just beginning to decline.  

3.) R.C. Allen said that "In a bull market, the volume of sales should increase as prices rise. If the volume does not increase, it may be a false move or 'trap.' Even though your charts may show a 'breakout' towards higher levels, the up move should never be trusted unless it occurs with an increase in the volume of the sales." The same thing can be said of down moves. If volume declines on a down move, that move should not to be trusted. On 3/28/11 our system found 110 R.C. Allen alerts. Of those, 106 were "Up Alerts" and 4 were "Down Alerts." On that day the market had declined and most of the alerts had a decrease in volume. According to Allen, such alerts are not to be trusted. When we filtered out the alerts with volume decreases we were left with 44 alerts of which 42 were "Up Alerts." Under the heading "Vol %" we give the 1-day change in volume on the day the alert is registered.

4.) The RSI is not part of R.C. Allen's system. We provide it so it can be used as a filtering tool. For example, you might decide that you are interested in those crossover setups where stocks have an RSI reading of 70 or some other figure.

5.) R.C. Allen only required the alignment of moving averages as described in item 1. What if you have an "Up Alert" in which the 4-day moving average is above the 9-day moving average but declining? This could be an indication that the signal may result in a whipsaw (a sell signal shortly after the buy signal). You can screen out such "setups" by using information in the column with the heading "4-Day MA." That column indicates whether the 4-day average is rising or falling.  Therefore, in addition to the proper alignment of moving averages, you may use the 4-day moving average to provide added confirmation of the signal by requiring that it also be moving in the direction of the crossover.   Stocks are listed as giving an alert based on a strict compliance with Allen's system.  There are rare exceptions.  Under Allen's rules, it is theoretically possible (though not common) for the 9-day moving average to be declining but still cross the 18-day moving average.  This can happen when both are declining but the 9-day average is declining more slowly than the 18-day average.  We have made an adjustment to our algorithm that requires the 9-day moving average to actually be rising in order for an "Up" alert to be generated on a positive crossover.  Similarly, it must actually be declining to generate a "Dn" alert on a negative crossover.  The idea is that we want to enter early when there has been a positive trend change (as indicated by a 9-day moving average that has actually started an uptrend).  We are not interested in alerts generated, for example, when the 9-day moving average is still declining but doing so more slowly than the 18-day moving average.

6.) The "Alert" column identifies the type of alert generated. The entries there will either read "Up Alert" or "Dn Alert" (Down Alert).

R.C. Allen's system has been used successfully by thousands of traders over many years. If you cannot make it work for you, it is likely because you have not learned to implement it correctly. Richard Dennis, one of the world's most accomplished traders, once trained a group of very intelligent people to be traders. He gave them all the same rules and trading system. A few made millions but some were failures. It all came down to implementation. Those who followed the rules did well. Those who second-guessed their system did poorly. Emotions will be your worst enemy when it comes to trading. Losses are a part of every discipline. If you think you have a good discipline but you lose money on 15 consecutive trades, an emotional trader might be more inclined to abandon his discipline or even abandon trading altogether. Successful traders do not. They may re-evaluate their system and the way they implement it, but if it is a good system that others have used successfully, they will not toss it away.

In our own studies, we programmed a computer to trade various strategies. One of the very best strategies generated many more losses than gains. The losses were all very small but many of the gains were large. Yet, the system was quite profitable. Most humans would not have been able to implement the strategy successfully because all the losses would have caused them to abandon it. However a computer does not get depressed when it has a losing trade. It keeps implementing a strategy no matter what happens. The key for a beginner is to strictly limit the amount that can be lost on each trade. If you are a beginner, use only a very small portion of your assets for trading and diversify the small portion that you trade.

 

A Reason Not to Buy

*The lists you will find here are not personal buy or sell recommendations. They are merely reports of stock activity and technical signals generated by a single specific discipline. However, this system is well-known and widely followed. However, proper alignment is not in itself a sufficient reason to buy or sell a stock. Look at the chart below, for example.
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The moving averages aligned properly in the last few days charted. The blue line is the 4-day moving average, the red line is the 9-day moving average, and the purple line is the 18-day moving average. Notice the large price spikes that caused the signal. These are white candlesticks. They are followed by one more short white candlestick and then by a large black candlestick (the last bar) that undoes the work of the two preceding white bars. At this point, we should be observers only. Earlier, there had been sideways work done between $26 and $27, the lower boundary of which is marked by the horizontal black line just below 26. This area will offer some resistance when the stock rises. Another area of possible resistance is the downward sloping straight black line terminating at about 23.24. This is the trendline that defines the current downtrend. Lateral work (not shown) was done between $22 and $22.75 (and later between $21.25 and $22). All of this suggests there may be some support around $22. The 50-day moving average (the broken black line) is at $22.71 and the 9-day average is just above $22. If the stock is going to be worthwhile, it should stop the decline that started with the large black candlestick before it reaches half way into the first large white candlestick. Once again, that is at about $22. All of these levels, taken together, should give you an idea about where the stock can be expected to get support. If that doesn't happen, the wise investor will simply walk away. The foregoing notwithstanding, we are not very positive about the stock on a long-term basis...yet. Observe that the downward sloping trendline drawn through significant tops is still in control (the closing price is below it). This line acts as overhead resistance, and it is still declining and exerting downward influence on the stock. The 50-day moving average has not yet shown any signs of turning around. If you are bullish, you want it to be at least flat if not rising. It is still declining. Our guess is that this stock may have to do a little more work and build a base before it is ready to embark on a significant uptrend. However, nimble traders can still make a nice profit on it by capturing surges. These traders are the ones who will look for support at about $22 After all, a $4 gain on a $22 stock is a gain of more than 18% (not bad for a few weeks). Longer term investors should require more convincing. As you can see, a stock can have the correct alignment of moving averages for a purchase but the pattern itself may still not be "ready' or it may even be lousy (or dangerous).

While Allen's discipline is a popular trading system in its own right, the trading members of our company prefer to use it as only one of their screening tools. That is, its output notifies us of the recent emergence of certain technical conditions that make a stock interesting and a candidate for a closer look. We conduct further evaluation and analysis to determine if a stock should be bought or included on our "Watch List." We would suggest that you use the same approach.

In general, we watch for a setup, the absence of significant overhead resistance, and a "trigger event." With regard to this particular screen, a proper setup may exist if a stock is listed on this page and if there is no reason to be apprehensive about the chart pattern. If there is overhead resistance immediately above the current price, there is reason to be apprehensive. If there is no resistance there, a good trigger event might be a follow-through price surge on increasing volume. If the resistance is there, we might still consider it to be a "setup" but modify the trigger event. For example, we might consider an acceptable trigger event to be a follow-through price surge on increasing volume that takes the stock through that resistance. Some experienced traders may even wait for a subsequent test of support at the previous level of resistance and then a resumption of the up-trend.

Instead of using Allen's system to define the setup, some use it to define the trigger event. For example, the trader might look for good setups (a Bollinger squeeze with penetration of upper band, for example). These setups would have a context that is attractive. Then, they would wait for R.C. Allen's discipline to give the final go-ahead.

(Note: A discussion of the meaning of "support" and "resistance" can be found by clicking on "Free Tutorials" on the navigation bar and scrolling down to the section titled "Charts." Read all of that section if you are unfamiliar with these terms.)

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