# Moving Average on Volume

Q:  In 1988 I had the first Knight Ridder Tradestation and I was able to do something that was pretty neat but I have never seen it since the demise of KR.  I could plot moving averages of volume and then display them on top of price. Using Fib numbers for the MA’s it gave very interesting wave structures and knowing this was a volume push was a powerful indicator.  Is there a way to do this in Ensign?

A:  Yes.   Change the Data Point for the Moving Average study to reference Volume.

# Range chart for EUR/USD

Q: I am totally confused as to what is happening here as I am getting very different bars on my 3R charts on EW (Eur/Usd+) compared to E10 (Eur/Usd).  EW needs 3R to give 3 pips per bar whereas the other is 30R to give 3 pips per bar. Which is correct and how do I rectify this?

A:  The R parameter is relative to the number of decimals used in the chart scale.

In EW you have 4 decimals showing so R3 is  0.0003.
In E10 you have 5 decimals showing, so the same value is R30 to get 0.00030.

If you want both to be the same, then both EW and E10 need to use the same decimal format.
I will assume your preference is to show the 1/10th pip digit, so lets change EW to show 5 decimals.  In EW go to the chart properties form by pressing CTRL+P on the chart.  Change the Price formats from the current  #.#### selections to the #.##### (5 decimal) selections.
Then EW will use  R30  charts instead of R3.

# IBM 3 Drives to Top

Larry Pesavento:  “IBM is completing 3 major patterns – the Butterfly pattern, a 3 drive to top pattern, and an AB=CD pattern.   This strongly suggests a major top.  In order to control risk the best strategy is to buy the Jan 180 put for \$5.00 or less.   IBM is expected to announce earnings this week!”

# ESPL: Emulate Workspace Tabs

Q:  I have used Ensign for years…and I am very happy with it. I look at about 14 markets. I set up each market with 2-3 charts in a workspace. I click onto a workspace and this works well for me.  I was trying to use the Layer function in Ensign 10 for the same effect, but the numbered tabs do not label that particular market, there are only 9 tabs, and my understanding is that it requires more CPU.   Is there any chance of having layout tabs in Ensign 10 that serves the same function as the workspace tabs in Ensign Windows?

A:  There are no plans to add a tab control which shows layout names to replicate the EW feature.  However, the E10 ESPL language is very powerful and could be used to create the tabs feature.  This is the essence of the ESPL implementation of a tab control.

Starting with a New Project, put a tab control on the form, and resized the form and the tab control.  At design time, edited the TABS property to add names for the tabs, such as is shown on the form, using words of ‘First’, ‘Second’, ‘Third’ etc.

In the Change event for the tab control, write code that opens different layouts using the Layout function. Here is the code example.

procedure TabControl1Change(Sender: TObject);
begin
Case tabControl1.tabIndex of
0: Layout('ALayoutName');
1: Layout('2ndLayout');
2: Layout('3rdLayout');
end;
end;

Edit the example so you have tab names that are meaningful and open the layouts using layout names you use.   Each tab would have a case number entry.

# IB: Ensign unable to find TWS

IB users that upgrade the TWS may experience connectivity problems. The upgrade has unchecked a setting in the TWS global configuration that is important for the Ensign connection. To re-apply this setting click on the TWS and select menu Edit | Global Configuration.

Then select Display at left [1], click on the styles submenu [2], and recheck the box at top that says “Use system title bar” [3]

You will need to close and reopen Ensign to establish the connection.

# ESPL: Format statement

Q:  I cannot get the format command to work with a variable enclosed in brackets.  This example gives an error.

vTotalVolume:=13894948
strText:=’The Total Volume was ‘ + Format(‘%12.0n’,[vTotalVolume]);

A:  The parameter needs to be of type ‘real’. The example you gave evaluates to type ‘integer’.   This example works where .0 is appended to the value so it is treated as a ‘real’.

vTotalVolume:=13894948.0
strText:=’The Total Volume was ‘ + Format(‘%12.0n’,[vTotalVolume]);

# T-Bonds Weekly Thunderbolt

Larry Pesavento:  “Thirty years ago in the spring of 1981 the yield on the 30-year treasury bond issued by the US government was above 16%. The bond carried an 8% coupon, but the price of the bond had dropped below 46. This meant that you could buy one hundred thousand dollars of treasury bonds for \$46,000, and cash them in at maturity for \$100,000. In 1981 inflation was rampant above 15%, gold had retreated from its high of 865 and ounce, and the country was in turmoil to say the least. Since that time, interest rates have dropped every year over the past 30 years making this one of the longest bull markets in bonds in history. The chart we are showing today is a long-term weekly chart of the thirty-year T-bond.

Several patterns are apparent to the trained eye. Of particular interest is the pattern that is completing at the present time known as the thunderbolt, or AB=CD pattern. This pattern measures equal and parallel moves and is present in just about everything that trades with a liquidity on the worldwide basis.  In addition a double top can be seen. This has the potential of being the trade of the decade, i.e. interest rates are going higher. No one in their right mind thinks this could happen but just looking at the charts it appears that this could be the case. The downgrading of U.S. Treasury bonds and notes by Standard & Poor’s did little to slow down the upward move of these instruments and make rates go even lower. What we’re waiting for now is a sign that the top is finally in. This sign will come after we have a correction and then one more retest hopefully at the 61% retracement were we can enter with a stop above the reason highs of 144. Bonds have not stopped going up as yet and they could still reach 151 making new highs from 2008.

Ask yourself this question, is there anyone that I would lend money to for 10 years at a rate of 1.9% per year? I think we all know the answer to that question.  However, the prevailing financial minds believe that rates are going to go even lower. Herein could be the big surprise for the rest of this decade.”

# Interactive Broker Chart Volumes

Q:  Why does my 15-second chart from IB have less volume than the same chart in Ensign?  When I refresh the Ensign chart from IB, the volume difference is corrected.

A: The higher volume bars in Ensign should be considered to be more correct than the IB chart, and here is why.   IB is a sampled feed, meaning they do not send all ticks.  The IB chart is charting the ticks seen and summing the tick volumes on those ticks. Ticks NOT sent, because it is a sampled feed, are totally ignored.

Ensign, on the other hand, compares the tick volume on the tick received with the change in total volume. Then they match, Ensign uses the tick volume value. When they differ, obviously some ticks were not sent and Ensign adds a filler tick with the needed tick volume to stay in sync with total volume.  These inserted ticks with the missing tick volume are the source of the larger volume values shown in Ensign compared to IB.

When the tick database is refreshed, Ensign receives 1 second records from IB to work with and this erases the filler ticks with the missing tick volume.  Thus the refreshed result looks more like the IB chart.  The refresh has forced Ensign to miss the ticks that the IB chart missed.  What Ensign is doing to account for missing volume in the live feed it better than what IB is doing.  The chart Ensign shows with the inserted missing tick volume is MORE like the charts from other data vendor who send all ticks.  It is recommended that refresh only be used when data is missing.

FYI, Ensign 10 does the same thing for the Yahoo Finance feed which is also a sampled feed.  Ensign 10 watches the change in total volume to calculate the tick volume that must have occurred since the last tick was received.

# Gold Index 3 Drives to Top

Larry Pesavento: “The gold market has been parabolic over the last 10 weeks and has approached an overbought situation that has not been seen since 1980 when gold topped at 865 an ounce. The Gold bug index (HUI) is showing a three drive to the top pattern along with the butterfly pattern. Within the butterfly pattern you can easily see the AB=CD pattern that is also known as the thunderbolt pattern. This is telling us that the market is incredibly vulnerable to a correction in gold.

We are seeing the same type of pattern evolving in the gold/silver index (XAU) but it is coming at a level where we’ve had three declining tops. Should you be long gold and silver it would be wise to ask yourself this question.? Why haven’t the gold and silver stocks gone up with the price of gold? Part of the answer is because the stock market has been been down dramatically but that is only one element. Silver, known as the poor man’s gold, is particularly weak as it is unable to make only a 61% retracement off of the April 25 highs.  Patterns such as those in gold and gold bug index are highly predictive of a major top, if not, at least a major correction. As always it is good to remember that these are only probabilities and not certainties. Good money management and risk control are tantamount to anything related to technical analysis.”

# Dec Corn Daily Harmonics

Larry Pesavento: “This weekend I would like to talk about the corn market because it is so perfectly harmonic. The Ensign Windows software I use is invaluable in the analysis of the corn market i.e. and others.

My focus is on December corn which is growing as we speak. It is also referred to as new crop corn because it will be harvested sometime in late October. Corn is a perfect example of the valuable insights that can be gleaned from technical analysis.

First, by using the formations tool in the Ensign program you can easily see the AB=CD patterns that are formed over the past nine months. What is interesting is that they have the same characteristics in time as they do in price.

Secondly, there is a 75 day cycle that is repeated twice and has peeked at the exact time in the previous two cycles. When cycles peak at the right hand side of the cycle, i.e. going longer to the upside, it is referred to as right translation and is invariably bullish do the market. As you can see from this chart the third peak is forming as we speak and is due sometime in mid-September.

By using the Fibonacci tool it is easy to see that the retracement’s entities cycles were 50% and 78.6% respectively. Finally we can look at the repetition in the corn market by watching previous retracements in the corn market as shown by the yellow boxes. The first three retracement’s were perfectly equal. The last retracement that finished with a Gartley pattern in early July was exactly twice the other retracements and stopped at the 786 retracement.

Other charts exhibit the same types and characteristics but this particular one in corn is a textbook example. Anyone unfamiliar with technical analysis are skeptical of its ability to help make good trading decisions should take some time and study these principles and then use them on other charts. The Ensign software I use enables me to look inside the market and see the secrets it is trying to tell us.”