August 2006

Woodie's CCI Template
by Howard Arrington

A WoodieCCI template can be downloaded from the Ensign web site using the Internet Services form in Ensign Windows.  The WoodieCCI template dresses a chart with the following indicators.

The template includes the following pieces of information.  See the corresponding number labels on the chart.

1. An alert message bar shows at the top of the chart when the CCI line is above 200 or below -200.

2. Woodie's pivots for Pivot Point PP, R3, R2, R1, S1, S2, and S3.

3. Pivot levels show graphically on the chart with price and label.

4. 34 EMA study

5. 25 LSMA study

6. Candlesticks, Ensign Rockets, Ensign Zebras, or Ensign Flutes.  Chart example shows Ensign Rockets.

7. Big yellow block markers showing past CCI extremes above 200 and below -200.

8. Small yellow pegs are shown for the first occurrence of a higher high at the top of the sub-window, and for the first occurrence of a lower low at the bottom of the sub-window.

9. Day Session High value and the Net to the current price from this High.

10. +200 grid line colored green when Close is above the 34 EMA and colored red when below.

11. Net distances to the nearest Woodie pivots above and below the current price.

12. Number of seconds remaining in this bar's time period.  Information is shown in yellow when less than 20 seconds left.

13. High of prior bar and current bar.   Current price.  Low of prior bar and current bar.
    The High values will show in green when the current bar has a higher high.
    The Low values will show in red when the current bar has a lower low.

14. Number of ticks in the current bar.

15. Angle in degrees of the slope of the LSMA study line.
    Angle in degrees of the slope of the EMA study line.
    Total of the 2 angle values.  Trend labels of Flat, Normal and Trending based on the Total value.

16. Day Session Low value and the Net to the current price from this Low.

17. -200 grid line colored red when the angle sum is Flat, yellow when Normal, and Green when Trending.

18. -100 and +100 grid lines colored with the CZI study which is a nearness test of price to the EMA.

19. 0 grid line colored green when Close is above the 25 LSMA and colored red when below.

20. Primary 14 period CCI study indicator.  Plotted as a thick black line.

21. Fast 6 period CCI leading indicator.  Plotted as a thin yellow line.

22. Histogram colored gray after crossing the zero line, yellow on the 5th bar, and red or blue when trending.

Explanation:

Ken Wood (aka 'Woodie') typically does not show the bar chart portion.  Instead he watches just the CCI study which is a sub-window in our presentation.  However, some of the values being referenced are better shown on the bar chart, so for the sake of illustration, the chart has been shown with the study sub-window.

On the example chart is an Exponential Moving Average (EMA), and its parameter is 34.  This is the blue and pink line (#4) using the Above | Below format.  The Above | Below is comparing the 34 line to a 9 period 2nd line which is not shown.  The 2nd study line (#5) on the chart is a Linear Regression Moving Average (LSMA) with a 25 period parameter. This line is being plotted in Green and Red using the Rising | Falling format.  References to  34 EMA and 25 LSMA are referring to these 2 study lines.

Woodie follows a CCI spread line which is plotted in the sub-window as the thick black line (#20), and it oscillates above and below the zero center line.  A histogram style (#22) is used with this CCI line with 4 different colors for the histogram bars.  When the CCI line crosses zero line, as it did at 10:30 in the example, the histogram changes to a dark gray to indicate the crossing.  If the CCI is still on the same side of the zero line 5 bars later, the gray color changes to a yellow color to indicate being at the threshold of a trend.  Subsequent bars after the yellow boundary bar will be colored red when below the zero line, indicating trending, or blue when above the zero line and trending.

This presentation of the CCI with the colored histogram in Ensign matches exactly the visual presentation Woodie uses.  This primary CCI line in black uses a 14 parameter, and in Ensign it uses a 67 multiplier parameter.  A 2nd CCI line (#21) is plotted as a thin yellow line to indicate a leading CCI which gives clues of what change might be forthcoming in the 14 CCI line.

To the right of the zero grid line for the CCI is the current price.  Above this current price are a pair of prices (#13), and these 2 prices are the values of the prior bar's high and the current bar's high.  The template will change the color of these 2 prices to be a green color when the current bar has a higher high.  Below the current price are similar prices for the prior bar's low and the current bar's low.   And as shown in the example, these prices, normally shown in white, will change to be shown in red when the current bar has a lower low.  So, in the center of the window one can quickly see the current price in the range of the prior bar and the current bar, and whether the current bar is breaking higher or lower than the prior bar.

Above the 2 highs (#12) is the number of seconds remaining in this bar.  In the example there are 155 seconds left in this bar.  The bar is a 5-minute bar, and for a new bar one might see 300 seconds remaining, and then the number counts down with the arrival of new ticks.  The number is normally shown in black, but will change to yellow when there are less than 20 seconds left to complete the bar.

Items #15 and #17 on the chart are Ensign's equivalent of Woodie's Sidewinder indicator.  Woodie has a trending indicator that is watching the slope of the 34 EMA and the slope of the 25 LSMA.  He calculates an angle from these slopes and sums the two angle values to get an indicator for trendiness.  I have looked over the details of the math he used to get his angle information, and I consider the Pyrapoint angle technology we have in Ensign to be similar enough to be used as an effective substitute.  

And it is a substitute for 2 reasons....1) I consider the Pyrapoint angle math to be superior and more generalized at arriving at a consistent angle regardless of the chart time frame or symbol the tool is applied to.  Woodie's angle calculations are dependant on the chart time frame, etc., which is fine, but our method works very well also.

The 2nd reason for the substitution is that the math for our Pyrapoint angle calculation is built into the Ensign program so it computes very quickly, much faster than could be implemented with a lengthy DYO sequence to calculate the angle as per Woodie's method.  I have watched and compared our angle values with Woodie's, and in general, our angle values tend to be smaller numbers.  Therefore the -64 degrees for the 25 LSMA and the -2 for the 34 EMA might be smaller values than Woodie's calculations.  These angles are added together, which at times cancels out some of the difference.  The message of Flat, Normal, or Trending that is shown by the -66 degrees total value, comes from certain levels of the angle total.

The -200 grid line (#17) is a color representation of the message that was shown at that point in time for the bar.  The red dashes are shown when the angle total's absolute value is below 50 and thus the word 'Flat' is being displayed.  50 is the threshold I found to use that makes the dash coloring match quite well the same visual shown on Woodie's charts.  Sums between 50 and 70 are the normal zone, and shown in yellow and would show the message label 'Normal' (#15).  Angle totals that exceed 70 are shown in green and post the message 'Trending' in green.

Again, this is slightly different math, but still accomplishes an equivalent trending indicator.  Ensign's study is equivalent to Woodie's Sidewinder because they look really similar as trending indicators and messaging.  You will find the -200 grid line coloring to be very similar to Woodie's.   The colors of Red, Yellow and green mean Flat, Normal and Trending in that order. You will find that the angles are slightly different for the 34 EMA and 25 LSMA on Ensign's charts from what you may see on the moderator's charts.  Ensign uses its proprietary Pyrapoint technology to determine standardized angles for the study line slopes. 

Most Woodie patrons don't look at prices because the tendency is to then focus on prices and not the study patterns.  Do as Woodie says, let the patterns put you in a trade and take you out of the trade.  Do not make up trades.  Draw trend lines and use the information on the screen to confirm the patterns.   Use both of the degree numbers to gauge direction and strength of the lama and mea.  Use the total to gauge the strength of the CCI trend.  Use the -200 grid line to keep a history, and use the line and label color to tell when to accept a ZLR trade.

For more information and documentation about Woodie's CCI trading methods, please visit his web site at http://www.woodiescciclub.com/     Woodie also has a very popular chat room with audio where patterns are discussed in real-time during market hours.  Feel free to check out his web site and chat room.