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Form N-14 ~ SEC Filings Explained
Initial registration statement for open-end investment company
Form F-7 ~ SEC Filings Explained
Registration statement for securities of certain Canadian issuers offered for cash upon the exercise of rights granted to existing security holders
Form 20-F, 20-F/A ~ SEC Filings Explained
Annual and transition report of foreign private issuerspursuant to sections 13 or 15(d) (and amendment thereto)
Form 18-K, 18-K/A ~ SEC Filings Explained
Annual report for foreign governments (and amendment thereto)
Form 15F-15D, 15F-15D/A ~ SEC Filings Explained
Notice of a foreign private issuers suspension of duty to file reports pursuant to Section 13 and 15(d) of the Act (and amendment thereto)
Form 15F-12G, 15F-12G/A ~ SEC Filings Explained
Notice of termination of a foreign private issuer's registration of a class of securities under Section 12(g) (and amendment thereto)
Form 15-15D, 15-15D/A ~ SEC Filings Explained
Notice of suspension of duty to file reports pursuant to Section 13 and 15(d) of the Act (and amendment thereto)
Form 15-12B, 15-12B/A & 15-12G, 15-12G/A ~ SEC Filings Explained
Notice of termination of registration of a class of securities under Section 12(g) (and amendment thereto)
13H, 13H-Q, 13H-A, 13H-I, 13H-R, 13H-T ~ SEC Filings Explained
Large Trader Registration Information Required of Large Traders Pursuant to the Securities Exchange Act of 1934 and Rule 13h-1 Thereunder. Initial Filing (13H), Amended Filing (13H-Q), Annual Filing (13H-A), Inactive Status (13H-I), Reactivated Status (13H-R), and Termination Filing (13H-T)
Form 13F-NT, 13F-NT/A ~ SEC Filings Explained
Initial Quarterly Form 13F Notice Report filed by institutional managers (and amendment thereto)
Form 13F-HR, 13F-HR/A ~ SEC Filings Explained
Initial Quarterly Form 13F Holdings report filed by institutional managers (and amendment thereto)
Form 11-K, 11-K/A ~ SEC Filings Explained
Annual report of employee stock purchase, savings and similar plans (and amendment thereto)
Form 11-KT, 11-KT/A ~ SEC Filings Explained
Transition report pursuant to Rule 13a-10 or 15d-10 (and amendment thereto)
Form 10-D, 10-D/A ~ SEC Filings Explained
Periodic distribution reports by Asset-Backed issuers pursuant to Rule 13a-17 or 15d-17 (and amendment thereto)
Form 10-12G, 10-12G/A ~ SEC Filings Explained
Initial general form for registration of a class of securities pursuant to section 12(g) (and amendment thereto)
Form 10-12B, 10-12B/A ~ SEC Filings Explained
Initial general form for registration of a class of securities pursuant to section 12(b) (and amendment thereto)
Form 2-E, 2-E/A ~ SEC Filings Explained
Sales material filed pursuant to Rule 609 under Regulation E. (and amendment thereto)
Form 1-E AD, 1-E AD/A ~ SEC Filings Explained
Sales material filed pursuant to Rule 607 under Regulation E. (and amendment thereto)
Form 1-E, 1-E/A ~ SEC Filings Explained
Notification under Regulation E by small business investment companies and business development companies (and amendment thereto)
DEF 14A~ SEC Filings Explained
A proxy statement is a statement required of a firm when soliciting shareholder votes. This statement is filed in advance of the annual meeting. The firm needs to file a proxy statement, otherwise known as a Form DEF 14A (Definitive Proxy Statement), with the U.S. Securities and Exchange Commission. This statement is useful in assessing how management is paid and potential conflict-of-interest issues with auditors. The statement includes:
? Voting procedure and information.
? Background information about the company's nominated directors including relevant history in the company or industry, positions on other corporate boards, and potential conflicts in interest.
? Board compensation.
? Executive compensation, including salary, bonus, non-equity compensation, stock awards, options, and deferred compensation. Also, information is included about perks such as personal use of company aircraft, travel, and tax gross-ups. Many companies will also include pre-determined payout packages for if an executive leaves the company.
? Who is on the audit committee, as well as a breakdown of audit and non-audit fees paid to the auditor.
SEC proxy rules: The term "proxy statement" means the statement required by Section 240.14a-3(a) whether or not contained in a single document.
In many cases, shareholder votes - particularly institutional shareholder votes - are determined by proxy firms which advise the shareholders...
Traditionally, broker-dealers have been permitted to vote for "routine" proposals on behalf of their shareholders if the shareholders do not return the proxy statement. This has been controversial, and in 2006 the NYSE Proxy Working Group recommended that the rules be modified so that uncontested director elections were not considered routine.[1] The SEC approved the rule on July 1, 2009.[2]
In July 2010, the SEC announced that it was seeking public comment on the efficiency of the proxy system.[3]
There has been some controversy over "proxy access" which is a method to allow shareholders to nominate candidates which appear on the proxy statement. Currently, only the nominating board can place candidates on the proxy statement. The United States Dodd–Frank Wall Street Reform and Consumer Protection Act specifically allowed the SEC to rule on this issue. In 2010, the SEC passed a rule which allowed certain shareholders to place candidates on the proxy statement,;[4] however, the rule was struck down by the United States Court of Appeals for the District of Columbia Circuit in 2011
Form 10-Q~ SEC Filings Explained
Form 10-Q, (also known as a 10-Q or 10Q) is a quarterly report mandated by the United States federalSecurities and Exchange Commission, to be filed by publicly traded corporations.
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934, it's an SEC filing that must be filed quarterly with the US Securities and Exchange Commission. It contains similar information to the annual form 10-K, however the information is generally less detailed, and the financial statements are generally unaudited. Information for the final quarter of a firm's fiscal year is included in the 10-K, so only three 10-Q filings are made each year.
These reports generally compare last quarter to the current quarter and last years quarter to this years quarter. The SEC put this form in place to facilitate better informed investors. The form 10-Q must be filed within 40 days for large accelerated filers and accelerated filers or 45 days after the end of the fiscal quarter for all other registrants (formerly 45 days)
Form 10-K~ SEC Filings Explained
A Form 10-K is an annual report required by the U.S. Securities and Exchange Commission (SEC), that gives a comprehensive summary of a public company's performance. Although similarly named, the annual report on Form 10-K is distinct from the often glossy "annual report to shareholders," which a company must send to its shareholders when it holds an annual meeting to elect directors (though some companies combine the annual report and the 10-K into one document). The 10-K includes information such as company history, organizational structure, executive compensation, equity, subsidiaries, and audited financial statements, among other information.
Companies with more than $10 million in assets and a class of equity securities that is held by more than 500 owners must file annual and other periodic reports, regardless of whether the securities are publicly or privately traded. Up until March 16, 2009, smaller companies could use Form 10-KSB. If a shareholder requests a company’s Form 10-K, the company must provide a copy. In addition, most large companies must disclose on Form 10-K whether the company makes its periodic and current reports available, free of charge, on its website. Form 10-K, as well as other SEC filings may be searched at theEDGAR database on the SEC's website.
In addition to the 10-K, which is filed annually, a company is also required to file quarterly reports on Form 10-Q. Information for the final quarter of a firm'sfiscal year is included in the annual 10-K, so only three 10-Q filings are made each year. In the period between these filings, and in case of a significant event, such as a CEO departing or bankruptcy, a Form 8-K must be filed in order to provide up to date information.
The name of the Form 10-K comes from the CFR (Code of Federal Regulations) designation of the form pursuant to sections 13 and 15(d) of the Securities Exchange Act of 1934 as amended.
Related Forms
Unlike the 10-K filed annually, other forms serve related purposes, but have different schedules. Form 10-Q, much briefer, is filed after each of the three quarters that do not have a 10-K filing. Form 8-K covers special material events that occur between 10-K and 10-Q filings.
A substantial number of firms filed their 10-K as a Form 10-K405 during the late 1990s and early 2000s (decade). A 10-K405 is a 10-K where the Regulation S-K Item 405 box on the cover page is checked. Due to confusion in its application, the 10-K405 was eliminated in 2002.
Filing Deadlines
Historically, Form 10-K had to be filed with the SEC within 90 days after the end of the company's fiscal year. However, in September 2002, the SEC approved a Final Rule that changed the deadlines to 75 days for Form 10-K for "accelerated filers"; meaning issuers that have a public float of at least $75 million, that have been subject to the Exchange Act's reporting requirements for at least 12 calendar months, that previously have filed at least one annual report, and that are not eligible to file their quarterly and annual reports on Forms 10-QSB and 10-KSB. These shortened deadlines were to be phased in over a three-year period, however in 2004 the SEC postponed the three-year phase in by one year. In December 2005, the SEC created a third category of "large accelerated filers," accelerated filers with a public float of over $700 million. As of December 27, 2005, the deadline for filing for large accelerated filers was still 75 days, however beginning with the fiscal year ending on or after December 15, 2006, the deadline will be 60 days. For other accelerated filers the deadline will remain at 75 days and for non-accelerated filers the deadline will remain at 90 days. For further reading, see the Final Rules [1] section of the SEC's website, referencing Rule 33-8644.
Parts
Every annual report contains 4 parts and 15 schedules. They are
PART I
ITEM 1. Description of Business
ITEM 1A. Risk Factor
ITEM 1B. Unresolved Staff Comments
ITEM 2. Description of Properties
ITEM 3. Legal Proceedings
ITEM 4. Mine Safety Disclosures
PART II
ITEM 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
ITEM 6. Selected Financial Data
ITEM 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
ITEM 7A. Quantitative and Qualitative Disclosures About Market Risk
ITEM 8. Financial Statements and Supplementary Data
ITEM 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure
ITEM 9A(T). Controls and Procedures
ITEM 9B. Other Information
PART III
ITEM 10. Directors, Executive Officers and Corporate Governance
ITEM 11. Executive Compensation
ITEM 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
ITEM 13. Certain Relationships and Related Transactions, and Director Independence
ITEM 14. Principal Accounting Fees and Services
PART IV
ITEM 15. Exhibits, Financial Statement Schedules Signatures
Part 1
Item 1 - Business
This describes the business of the company: who and what the company does, what subsidiaries it owns, and what markets it operates in. It may also include recent events, competition, regulations, and labor issues. (Some industries are heavily regulated, have complex labor requirements, which have significant effects on the business.) Other topics in this section may include special operating costs, seasonal factors, or insurance matters.
Item 1A - Risk Factors
Here, the company lays out anything that could go wrong, likely external effects, possible future failures to meet obligations, and other risks disclosed to adequately warn investors and potential investors.
[Item 2 - Properties
This section lays out the significant properties, physical assets, of the company. This only includes physical types of property, not intellectual or intangible property.
Item 3 - Legal Proceedings
Here, the company discloses any significant pending law suit or other legal proceeding. References to these proceedings could also be disclosed in the Risks section or other parts of the report.
Item 4 - Mine Safety Disclosures
This section requires some companies to provide information about mine safety violations or other regulatory matters.
Item 5 - Market
Gives high's and low's of stock, in a simple statement. Market for Registrant's Common Equity, related stockholder matters and issuer purchases of equity securities.
Item 6 - Consolidated Financial Data
In this section Financial Data showing consolidated records for the legal entity as well as subsidiary companies.
Item 7 - Management's Discussion and Analysis
Here, management discusses the operations of the company in detail by usually comparing the current period versus prior period. These comparisons provide a reader an overview of the operational issues of what causes such increases or decreases in the business.
Forward Looking Statements
Forward-looking statement is the disclaimer that projections as to future performance are not guaranteed, and things could go otherwise.
Item 8 - Financial Statements
1. Independent Auditor's Report 2. Consolidated Statements of Operation 3. Consolidated Balance Sheets 4. other accounting reports and notes.
Here, also, is the going concern opinion. This is the opinion of the auditor as to the viability of the company. Look for "unqualified opinion" expressed by auditor. This means the auditor had no hesitations or reservations about the state of the company, and the opinion is without any qualifications (unconditional).
Five percent ownership
Five percent ownership refers to companies or individuals who hold at least 5% of the total value of the stock of a public company. They usually are founders of the company or large mutual fund companies, and because of how much stock they own, they usually have access to the board of directors of the company and hold significant sway over the company.
Five percent owners must also file Schedule 13d with the SEC.
Form 8-K~ SEC Filings Explained
Form 8-K is a very broad form used to notify investors of any material event that is important to shareholders or the United States Securities and Exchange Commission. This is one of the most common types of forms filed with the SEC. After a significant event like bankruptcy or departure of a CEO, a public company generally must file a Current Report on Form 8-K within four business days to provide an update to previously filed quarterly reports on Form 10-Qand/or Annual Reports on Form 10-K. Form 8-K is required to be filed by public companies with the SEC pursuant to the Securities Exchange Act of 1934, as amended. For a list of events that would trigger a Form 8-K to be filed, see the Official SEC Form 8-K Summary, reproduced below.
When Form 8-K is required
Form 8-K is used to notify investors of a current event. These types of events include:
? Material definitive agreements not made in the ordinary course of business
? Bankruptcies or receiverships
? Director is elected
? Director departs
? If a director departs because of a disagreement with the company on any matter relating to the registrant’s operations, policies, or practices then an 8-K must be filed to disclose a brief description of the circumstances representing the disagreement.[1]
? Asset movement: acquisition or sale
? Result of operations and financial condition
? Material Direct Financial obligations (bonds, debentures)
? Triggering events that accelerate material obligations (defaults on a loan)
? Exit or disposal plans
? Layoffs
? shutting down a plant
? material change in services or outlets
? Material impairments
? Delisting or transfer exchange notices
? Unregistered equity sales
? Modifications to shareholder rights
? Change in accountant - and good idea to explain why
? SEC investigations and internal reviews
? Financial non-reliance notices
? Changes in control of the company
? Someone takes a large equity position (more than 15%); shareholder also needs to file with SEC as to intent
? Someone takes a 51% position
? Changes in executive management
? Officer leaves
? Officer is fired
? Officer is hired
? Departure or appointment of company officers
? Amendments to company Governance Policies
? Code of Ethics
? Board Committee Governance Policies
? Trading suspension
? Change in credit
? Change in company status
? Other events
? Financial exhibits
Investors should always read any 8-K filings that are made by companies in which they are invested. These reports are both material and relevant to the company, and often contain information that will affect the share price.
Reading Form 8K
Typically an 8-K filing will only have two major parts. They are:
? The name and description of the event - this contains all the information that the company considers relevant to shareholders and the SEC. It is important to read this information, as it has been deemed "material" by the company.
? Any exhibits that are relevant - these exhibits may include financial statements, press releases, data tables, or other information that is referenced in the description of the event.
ARS~ SEC Filings Explained
Annual Report to Security Holders.
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Form 6-K~ SEC Filings Explained
Form 6K is an SEC filing submitted to the US Securities and Exchange Commission used by certain foreign private issuers to provide information that is:
? Required to be made public in the country of its domicile
? Filed with and made public by a foreign stock exchange on which its securities are traded
? Are distributed to security holders.
The report must be furnished promptly after such material is made public. The form is not considered "filed" because of Section 18 (for liability purposes). This is the only information furnished by foreign private issuers between annual reports, since such issuers are not required to file on Forms 10-Q or 8-K.
Form 20-F ~ SEC Filings Explained
Form 20-F is an SEC filing submitted to the US Securities and Exchange Commission used by certain foreign private issuers to provide information.
20-F, 20-F/A Annual and transition report of foreign private issuers pursuant to sections 13 or 15(d)
20FR12B, 20FR12B/A Form for initial registration of a class of securities of foreign private issuers pursuant to section 12(b)
20FR12G, 20FR12G/A Form for initial registration of a class of securities of foreign private issuers pursuant to section 12(g)
The postfix /A stands for 'Amendment'
The report must be filed within six months after the end of the fiscal year.
SEC Filings Explained ~ Rule 144
On December 6, 2007, the SEC published final rules revising Rule 144 under the Securities Act of 1933, which regulates the resale of restricted securities and securities held by affiliates. The amendments to Rule 144, among other things:
1. Shorten the holding period for affiliate and non-affiliate holders of restricted securities of SEC-reporting companies to six months, subject to certain conditions
2. Permit unlimited resale by non-affiliate holders of restricted securities by complying only with the current public information condition for resale of restricted securities issued by SEC reporting companies made after the six-month holding period; and without complying with any Rule 144 conditions for resale of restricted securities issued by both SEC reporting and non-reporting companies made after a one-year holding period.
3. permit resale of equity securities by affiliates that meet certain conditions through riskless principal transactions and brokers’ transactions in which the broker has published bid and asked quotations for the security in an alternative trading system.
4. Eliminate the manner of sale conditions and ease the volume limitations for resale of debt securities by affiliates.
5. Increase the thresholds that trigger the Form 144 filing requirement to 5,000 shares or $50,000.
The SEC did not adopt previously proposed provisions relating to the tolling of holding periods in connection with hedging transactions.
The amendments will become effective on February 15, 2008, and will apply to securities acquired before or after that date. Background
Rule 144 regulates the resale of “restricted securities”1 and “control securities,”2 by establishing certain conditions that must be satisfied in order for the resale to be exempt from the Securities Act registration requirements pursuant to Section 4(1) of the Securities Act—a safe harbor from “underwriter” status for the selling security holder.
The conditions include the following:
? There must be adequate current public information available about the issuer;
? If the securities being sold are restricted securities, the security holder must have held the security for a specified holding period;
? The resale must be within specified sales volume limitations;
? The resale must comply with the manner of sale requirements of the rule; and
? The selling security holder must file Form 144 with the SEC if the amount of securities being sold exceeds specified thresholds.
Amendments to Conditions for Resale of Restricted Securities
Restricted Securities of SEC-Reporting Companies. The SEC has reduced the holding period under Rule 144 for restricted securities of SEC-reporting companies held by both affiliates and non-affiliates from one year to six months. Affiliate holders of reporting company securities may now resell their restricted securities after six months, subject to the other Rule 144 requirements. Non-affiliate holders of reporting company securities (who have also not been affiliates during the prior three months) may now resell their restricted securities held between six months and one year subject only to Rule 144’s current public information requirement. Any such resale by a non-affiliate after one year will be exempt from all Rule 144 requirements.
Restricted Securities of Non-Reporting Companies. There is still a one-year holding period for affiliate and non-affiliate holders of restricted securities in non-reporting companies under amended Rule 144. After the one-year holding period, non-affiliates may now resell their restricted securities without having to comply with any other Rule 144 requirements; affiliates seeking to resell their restricted securities must still meet all Rule 144 requirements.
The manner of sale requirements of Rule 144 require securities to be sold in “brokers’ transactions” or in transactions directly with a “market maker.”
The rule includes restrictions on (1) soliciting or arranging for the solicitation of orders to buy the securities in anticipation of, or in connection with, the Rule 144 transaction or (2) making any payment in connection with the offer or sale of the securities to any person other than the broker who executes the order to sell the securities.
The SEC amended these rules to also permit the resale of restricted equity securities by affiliates through riskless principal transactions in which trades are executed at the same price, exclusive of any explicitly disclosed markup or markdown, commission equivalent or other fee, and the rules for a self-regulatory organization permit the transaction to be reported as riskless.3 The amended rule also expands the definition of a “brokers’ transaction” for purposes of such resale by permitting a broker to insert bid and ask quotations for the security in an alternative trading system, provided that the broker has published bona fide bid and ask quotations for such security on each of the last 12 business days. Resale of Restricted Debt Securities The SEC has eliminated the manner-of-sale requirements for affiliate resale of debt securities, including non-participatory preferred stock (which has debt-like characteristics) and asset-backed securities. The SEC also raised the volume limitations for the resale of debt securities to permit resale in an amount that does not exceed ten percent of a tranche (or a class with respect to non-participatory preferred stock), together with all sales of securities of the same tranche sold for the selling debt security holder within a three-month period. Form 144 Filing Triggers
The sales thresholds for filing Form 144 have been increased from 500 shares or $10,000 worth of securities to 5,000 shares or $50,000. Codified
SEC Staff Interpretations
The SEC has also codified various staff interpretations relating to Rule 144, including the following:
1. Stating that securities acquired by accredited investors pursuant to Section 4(6) of the Securities Act are considered restricted securities
2. Permitting tacking of holding periods when a company reorganizes into a holding company structure
3. Permitting tacking of holding periods for conversions and exchanges of securities
4. Deeming the acquisition dates for securities acquired pursuant to the cashless exercise of options and warrants as the dates the options or warrants were acquired
5. Permitting a pledgee of restricted securities to sell the pledged securities without having to aggregate the sale with sales by other pledgees from the same pledgor (as long as there is no concerted action by those pledgees), for purposes of the Rule 144 volume limitation condition
6. Permitting the Form 144 representations required from security holders relying on Exchange Act Rule 10b5-1 to be made as of the date the holder adopted a trading plan or gave trading instructions
7. Confirming the unavailability of Rule 144 for the resale of securities by reporting and non-reporting firms
It made the top of the list!
*Alphabetical
http://www.stockgoodies.com/list-of-marijuana-stocks.html
Pivot Points ~ Conclusion
Pivot Points offer chartists a methodology to determine price direction and then set support and resistance levels. It usually starts with a cross of the Pivot Point. Sometimes the market starts above or below the Pivot Point. Support and resistance come into play after the crossover. While originally designed for floor traders, the concepts behind Pivot Points can be applied across various timeframes. As with all indicators, it is important to confirm Pivot Point signals with other aspects of technical analysis. A bearish candlestick reversal pattern could confirm a reversal at second resistance. Oversold RSI could confirm oversold conditions at second support. An upturn in MACD could be used to confirm a successful support test. On a final note, sometimes the second or third support/resistance levels are not seen on the chart. This is simply because their levels exceed the price scale on the right. In other words, they are off the chart.
Pivot Points ~ Support and Resistance
Support and resistance levels based on Pivot Points can be used just like traditional support and resistance levels. The key is to watch price action closely when these levels come into play. Should prices decline to support and then firm, traders can look for a successful test and bounce off support. It often helps to look for a bullish chart pattern or indicator signal to confirm an upturn from support. Similarly, should prices advance to resistance and stall, traders can look for a failure at resistance and decline. Again, chartists should look for a bearish chart pattern or indicator signal to confirm a downturn from resistance.
The second support and resistance levels can also be used to identify potentially overbought and oversold situations. A move above the second resistance level would show strength, but it would also indicate an overbought situation that could give way to a pullback. Similarly, a move below the second support would show weakness, but would also suggest a short-term oversold condition that could give way to a bounce.
Pivot Points ~ Setting the Tone
The Pivot Point sets the general tone for price action. This is the middle line of the group that is marked (P). A move above the Pivot Point is positive and shows strength. Keep in mind that this Pivot Point is based on the prior period's data. It is put forth in the current period as the first important level. A move above the Pivot Point suggests strength with a target to the first resistance. A break above first resistance shows even more strength with a target to the second resistance level.
The converse is true on the downside. A move below the Pivot Point suggests weakness with a target to the first support level. A break below the first support level shows even more weakness with a target to the second support level.
Demark Pivot Points
Demark Pivot Points start with a different base and use different formulas for support and resistance. These Pivot Points are conditional on the relationship between the close and the open.
If Close < Open, then X = High + (2 x Low) + Close
If Close > Open, then X = (2 x High) + Low + Close
If Close = Open, then X = High + Low + (2 x Close)
Pivot Point (P) = X/4
Support 1 (S1) = X/2 - High
Resistance 1 (R1) = X/2 - Low
The chart below shows the Russell 2000 ETF (IWM) with Demark Pivot Points on a 15 minute chart. Notice that there is only one resistance (R1) and one support (S1). Demark Pivot Points do not have multiple support or resistance levels.
Fibonacci Pivot Points
Fibonacci Pivot Points start just the same as Standard Pivot Points. From the base Pivot Point, Fibonacci multiples of the high-low differential are added to form resistance levels and subtracted to form support levels.
Pivot Point (P) = (High + Low + Close)/3
Support 1 (S1) = P - {.382 * (High - Low)}
Support 2 (S2) = P - {.618 * (High - Low)}
Support 3 (S3) = P - {1 * (High - Low)}
Resistance 1 (R1) = P + {.382 * (High - Low)}
Resistance 2 (R2) = P + {.618 * (High - Low)}
Resistance 3 (R3) = P + {1 * (High - Low)}
The chart below shows the Dow Industrials SPDR (DIA) with Fibonacci Pivot Points on a 15 minute chart. R1 and S1 are based on 38.2%. R2 and S2 are based on 61.8%. R3 and S3 are based on 100%.
Standard Pivot Points
Standard Pivot Points begin with a base Pivot Point. This is a simple average of the high, low and close. The middle Pivot Point is shown as a solid line between the support and resistance pivots. Keep in mind that the high, low and close are all from the prior period.
Pivot Point (P) = (High + Low + Close)/3
Support 1 (S1) = (P x 2) - High
Support 2 (S2) = P - (High - Low)
Resistance 1 (R1) = (P x 2) - Low
Resistance 2 (R2) = P + (High - Low)
The chart below shows the Nasdaq 100 ETF (QQQ) with Standard Pivot points on a 15 minute chart. At the start of trading on June 9th, the Pivot Point is in the middle, the resistance levels are above and the support levels are below. These levels remain constant throughout the day.
Pivot Points ~ Time Frames
Pivot Points for 1, 5, 10 and 15 minute charts use the prior day's high, low and close. In other words, Pivot Points for today's intraday charts would be based solely on yesterday's high, low and close. Once Pivot Points are set, they do not change and remain in play throughout the day.
Pivot Points for 30 and 60 minute charts use the prior week's high, low and close. These calculations are based on calendar weeks. Once the week starts, the Pivot Points for 30 and 60 minute charts remain fixed for the entire week. They do not change until the week ends and new Pivots can be calculated.
Pivot Points for daily charts use the prior month's data. Pivot Points for June 1st would be based on the high, low and close for May. They remain fixed the entire month of June. New Pivot Points would be calculated on the first trading day of July. These would be based on the high, low and close for June.
Pivot Points for weekly and monthly charts use the prior year's data.
Pivot Points
Introduction
Pivots Points are significant levels chartists can use to determine directional movement, support and resistance. Pivot Points use the prior period's high, low and close to formulate future support and resistance. In this regard, Pivot Points are predictive or leading indicators. There are at least five different versions of Pivot Points. This article will focus on Standard Pivot Points, Demark Pivot Points and Fibonacci Pivot Points.
Pivot Points were originally used by floor traders to set key levels. Floor traders are the original day traders. They deal in a very fast moving environment with a short-term focus. At the beginning of the trading day, floor traders would look at the previous day's high, low and close to calculate a Pivot Point for the current trading day. With this Pivot Point as the base, further calculations were used to set support 1, support 2, resistance 1 and resistance 2. These levels would then be used to assist their trading throughout the day.
Scans
Break above falling SAR: This scan starts with stocks that have an average price of $10 or greater over the last three months and average volume greater than 40,000. The scan then filters for stocks that have a bullish SAR reversal (Parabolic SAR (.01,.20)). This scan is just meant as a starter for further refinement.
Break below rising SAR: This scans starts with stocks that have an average price of $10 or greater over the last three months and average volume greater than 40,000. The scan then filters for stocks that have a bearish SAR reversal (Parabolic SAR (.01,.20)). This scan is just meant as a starter for further refinement.
Conclusions
The Parabolic SAR works best with trending securities, which occur roughly 30% of the time according to Wilder's estimates. This means the indicator will be prone to whipsaws over 50% of the time or when a security is not trending. After all, SAR is designed to catch the trend and follow it like a trailing stop. As with most indicators, the signal quality depends on the settings and the characteristics of the underlying security. The right settings combined with decent trends can produce a great trading system. The wrong settings will result in whipsaws, losses and frustration. There is no golden rule or one-size-fits-all setting. Each security should be evaluated based on its own characteristics. Parabolic SAR should also be used in conjunction with other indicators and technical analysis techniques. For example, Wilder's Average Directional Index can be used to estimate the strength of the trend before considering signals.
Maximum Step
The sensitivity of the indicator can also be adjusted using the Maximum Step. While the Maximum Step can influence sensitivity, the Step carries more weight because it sets the incremental rate-of-increase as the trend develops. Also note that increasing the Step insures that the Maximum Step will be hit quicker when a trend develops. Chart 8 shows Best Buy (BBY) with a Maximum Step (.10), which is lower than the default setting (.20). This lower Maximum Step decreases the sensitivity of the indicator and produces fewer reversals. Notice how this setting caught a two month downtrend and a subsequent two month uptrend. Chart 9 shows BBY with a higher Maximum Step (.20). This higher reading produced extra reversals in early February and early April.
Step Increments
The Acceleration Factor (AF), which is also referred to as the Step, dictates SAR sensitivity. SharpCharts users can set the Step and the Maximum Step. As shown in the spreadsheet example, the Step is a multiplier that influences the rate-of-change in SAR. That is why it is referred to as the Acceleration Factor. Step gradually increases as the trend extends until it hits a maximum. SAR sensitivity can be decreased by decreasing the Step. A lower step moves SAR further from price, which makes a reversal less likely.
SAR sensitivity can be increased by increasing the step. A higher step moves SAR closer to the price action, which makes a reversal more likely. The indicator will reverse too often if the step is set too high. This will produce whipsaws and fail to capture the trend. Chart 6 shows IBM with SAR (.01, .20). The step is .01 and the Maximum Step is .20. Chart 7 shows IBM with a higher Step (.03). SAR is more sensitive in chart 7 because there are more reversals. This is because the Step is higher in chart 7 (.03) than chart 6 (.01).
Interpretation
SAR follows price and can be considered a trend following indicator. Once a downtrend reverses and starts up, SAR follows prices like a trailing stop. The stop continuously rises as long as the uptrend remains in place. In other words, SAR never decreases in an uptrend and continuously protects profits as prices advance. The indicator acts as a guard against the propensity to lower a stop-loss. Once price stops rising and reverses below SAR, a downtrend starts and SAR is above the price. SAR follows prices lower like a trailing stop. The stop continuously falls as long as the downtrend extends. Because SAR never rises in a downtrend, it continuously protects profits on short positions.