SKYWALKER 2046

Just jumpped into the trading world

Interpreting the Market Carpet 2009/03/28

Filed under: market indicators — rogerwang2046 @ 22:55
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Market Carpet Current View

Our Market Carpet tool presents a large collection of stocks as a “carpet” of colored squares. Each square represents a stock, mutual fund, or index. Squares are grouped together logically depending on how the carpet is organized – it could be by sector, by industry group, or some other system. Within each group, the squares are arranged by market capitalization (when applicable) from smallest (upper left) to largest (lower right).

This chart shows the S&P Sector carpet. Right away we can see that the Technology sector has outperformed the Energy sector in the past two days, with Corning leading the way at +12.60%. Clicking on the Corning box brings up the line chart in the top right, allowing us to get the details of its recent price movement.

The first set of numbers 1 thru 5 on the carpet represent the top 5 performing stocks (1 being the top).

The second set of numbers 1 thru 5 represent the bottom 5 performing stocks (1 being the bottom).

Navigating the Market Carpet is very intuitive. At the highest level, the grid will be separated into only the sectors, allowing you to see the best and worst performing sectors. At this point, the side bar displays the best and worst performing sectors. Clicking on the box will also display a line chart that tracks the past performance of the sector.

You can then click on any grey sector title bar to fill in the colored boxes for the stocks. The side bar will now display the best and worst performing stocks in the entire carpet. Clicking on the grey title bar again will now zoom into the specific sector, showing the best and worst performing stocks in that sector alone.

To go up one level, click the Up Arrow at the top of the chart.

This is the value of Market Carpets; an analyst can quickly glance at a picture and immediately determine the leading sectors and stocks, and can then proceed to get further information on any individual sector or security.

Side BarThe side bar serves two functions:

  1.  Providing more detail about an individual sector or security
  2.  Displaying the best and worst performers.

The line chart located at the top of the side bar allows you to get a quick look at the recent price action of the sector or security. The name, date, and close price for that day are all displayed at the top of the chart.

You can click at any point on the graph to find data for that specific point. The day and close price will adjust accordingly.

The Top 5 and Bottom 5 list at the bottom of the side bar make it easy to identify the leaders and laggards. The Top 5 correspond to the 1 thru 5 on the Market Carpet, and the Bottom 5 correspond to the -1 thru -5.

Clicking on any item on the list will bring up its price line in the chart above.

MarketCarpets work in two different modes: absolute and change. The mode is controlled by the Delta Button button at the top left of the carpet.

  •  In Change mode, the color of each square reflects the value of the selected indicator for the range of days shown at the top right of the carpet. “(Chg.)” will appear beside the Delta Button button, and the button itself will be depressed. This mode is useful for spotting multi-day changes, such as which stocks have had the biggest RSI improvement over the past week.
    Change Mode
  •  In Absolute mode, the color of each square reflects the value of the selected indicator for the single day specified at the top right of the carpet. In this mode, you’ll notice the date slider no longer shows a number of days and cannot be stretched. Use this mode for single-day analysis, such as seeing which stocks have the strongest RSI today.
    Absolute Mode

Note: By default, all predefined carpets use the Price Performance indicator. Price Performance measures a stock’s closing value for a specific date range, therefore it ONLY works in Change mode. Once you select a different indicator, the Delta Button button will appear and you can change the mode accordingly.

Market Carpet Display ModeAt the bottom left of the Market Carpet, you can toggle Market Cap Mode and Long Term Mode.

Market Carpet CapMarket Cap Mode: Each square is sized according to the market cap of that stock so that it is easy to identify market capitalization. Square Mode is used by default and makes the squares fairly similar in size.

Market Carpet LongTermLong Term Mode: Lengthens the color range for the chart. In some cases, your carpet may have very large sections of red or green, making comparisons between individual stocks difficult. Switching to Long-Term Mode will lengthen the color range and give you a better perspective.

:support:images:short_term.gif

Short-Term Mode

:support:images:long_term.gif

Long-Term Mode

:support:images:carpetindicators.gifThe drop-down menu at the top left of the Carpet allows you to select from a variety of technical indicators. In order to interpret the carpet results properly, it is important to know exactly what each of the indicators on the carpet really means:

Price Performance is simply the percent increase or decrease in a stock’s closing value over time. Unlike most of the other indicators, it requires a start date and an end date, thus it only works in Change mode. It is calculated by subtracting the starting closing value from the ending closing value, dividing that difference by the starting closing value and then multiplying the result by 100.

Price Performance shows you the bottom line. Stocks that have been increasing in price will be green, those that have been falling are red. Dark green is good (for longs), dark red is bad.

Note: Don’t forget to switch between Short-Term and Long-Term coloring mode as you lengthen or shorten the date slider, by clicking on the color-range bar.

As its name implies, this indicator counts the number of days that a stock moves higher and then subtracts the number of days that it moves lower during the specified time span. Like Price Performance, this indicator only works in Change mode. To get good results, the date slider really needs to include 4 or more days in the calculation.

This indicator is often the best indicator for measuring overall market breadth and sector rotation effects. If you are interested in finding stocks withconsistent increases or decreases, this indicator can help.

See our ChartSchool articles on Indicator Analysis for detailed explanations of the other indicators.

Range Scale

The range scale at the top center of the carpet shows the range of values used to color the squares.

  •  Here, the darkest green boxes would represent at least a 10, while the darkest reds would represent at most a -10.
  •  Left-click on the range scale to switch between short-term mode (the default) and long-term mode.
  •  Right-click on the range scale to swap the high and low colors.

Note Different indicators use different scales. For example, RSI uses a range of 10 to 90 in absolute mode, but Full Stochastics uses 0 to 100. In addition, most indicators let you change the range to accommodate larger variations in value. Thus, if large parts of the carpet are either bright red or bright green, switching to “Long-Term Mode” will lengthen the range and give you a better perspective.

:support:images:date_slider_000.gif

The Date Slider Bar allows you to select the number of days the Market Carpet should cover. Market Carpets typically contain 45 days worth of data. The number of days is shown on the center of the slider, and the selected time period is shown on the top right of the carpet.

  •  To move the date range, grab the center portion of the slider and shift it left or right. You can also click on either of the slider’s end arrows to go back or forward one trading day.
  •  Right-click on the date slider to select one of several pre-defined date ranges.

Note: In Absolute mode, the slider will not display any days and cannot be stretched.

  •  F1: see the past week’s data
  •  F2: see the past month’s data
  •  Arrow Keys: move the slider left or right
  •  Shift + Arrow Keys: move the left-hand end (changes the beginning date shown)
  •  Ctrl + Arrow Keys: move the right-hand end (changes the end date shown)

Market Carpet Info Box

Hover your mouse over any square to view a summary box for that company showing the company name, ticker symbol, and dates/prices.


Right-click a square for more options: 

Market Carpet Menu

  •  Animate is an instant slide-show of the carpet for each day of the date range. The date slider moves automatically through the entire range, giving you a quick overview of pattern and color changes within the carpet over time.
  •  Hide Info Boxes hides the pop-up summary boxes for each stock. If you find the info boxes distracting when running your mouse over the carpet, use this option.
  •  Show Popups will display some addition options when you left-click on the square. See below for details.
  •  Show Ticker Symbol displays each stock’s ticker symbol in its colored square. This helps you find a particular stock quickly, or get a quick summary of all the stocks included in the carpet.
  •  Show Values displays the value of each stock’s comparison indicator in its colored square.
  •  Hide Top/Bottom 5 hides the markings (1 thru 5 and -1 thru -5) in the squares of the top and bottom 5 stocks for the technical indicator being used. These markings are displayed by default to help you quickly analyze the carpet.
  •  Market Cap Mode makes identifying market capitalization easy, because each square is sized according to the market cap of that stock. Square Mode is used by default and makes the squares fairly similar in size.
  •  Long-Term Mode lengthens the color range for the chart. In some cases, your carpet may have very large sections of red or green, making comparisons between individual stocks difficult. Switching to Long-Term Mode will lengthen the color range and give you a better perspective.
  •  Color Scheme: By default, most of the indicators work on a percentage scale (0-100) where low values are typically dark red and high values are dark green. However, you can select other color schemes such as Vanilla or Monochrome if you prefer their appearance.

With Show Popups enabled, you can left-click anywhere on the chart for some additional charting options: 

IBM Market Carpet

  •  Show… opens the corresponding chart for that stock.
  •  Search… checks the entire StockCharts.com site and returns a list of pages the stock is mentioned in.
  •  Zoom in… helps you analyze a specific market sector by magnifying that sector’s section of the carpet. To return to the original carpet, click the button beside the carpet title at the top, or click on any square and select “Zoom out.”

Perf Action Bar

The Action Bar is located below the chart. It contains convenient links that perform common and useful tasks with the chart.

  •  Instructions: Returns you to this help page.
  •  Understanding: Opens a page where you can learn how to interpret Market Carpets.
  •  How to print this chart: Opens a help page that explains how to print Java charts properly.
  •  Java Problems?: Opens a help page for troubleshooting Java-related problems.

To view the chart in a separate, re-sizeable window, click the Detach Detach Icon icon in the bottom left corner. Detaching the chart allows you to resize it (even to full-screen). Closing the detached chart sends it back to the original page.

When you click on a stock and plot the line chart, you also have the option of opening a SharpChartPerfChart, or Point and Figure Chart in a new window for that stock.

Click the SharpChart Button button to open a SharpChart in a new window.

Click the PNF Button button to open a Point and Figure Chart in a new window.

Click the PerfChart Button button to open a PerfChart in a new window.

As an Extra! member, you can create a custom Market Carpet from any of your Favorites Lists, so you can see at a quick glance how your list is performing. There are two ways to view your favorites in a CandleGlance group:

From your Extra! page in the Members tab, scroll down to the Your Favorite Charts section and click on the MarketCarpet link for the list you want to use.

Your Favorite Charts

From inside any Favorites List, use the Format drop-down menu at the top of the page and select MarketCarpet.

Market Carpet Favorites

Extra! members can also create a carpet directly from a user-defined scan for a more visual analysis of the scan results.

Criteria Box

From the User-Defined Scan Results page, scroll down under the blue Criteria box and click on Display these results in a Market Carpet.

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