John Forman, trading coach and author of The Essentials of Trading book and blog has recently put out a promising new resource for traders. It’s the New Trader FAQ’s book.

Through his coaching and his blog John has gained extensive experience working with beginning traders.

In putting the book together John first compiled a huge list of questions most asked of him by beginning traders. They include topics related to such things as education & learning curve, trading mechanics, analysis, systems, trader psychology, brokers, and trading careers.

Rather than just answer all the questions himself, John was able to get 11 other trading professionals to offer their perspectives. You’ll no doubt recognize many of the contributors. I’m pleased to say I was able to contribute a small part to the effort.

I’m even more pleased at how well the whole book came out. John truly did a terrific job. And while the intent was to help beginning traders with informative and diverse answers on a wide range of topics, I’d have to say John overshot his goal. You don’t need to be a beginner to gain something from the book.

So if you’re looking for something to read this long Memorial Day weekend, you may want to check out the New Trader FAQ’s. John even lists all the questions on his site for those who would like more detail.

As of the close on Wednesday the Capitulative Breadth Indicator (CBI) was at 4.

With prices at the current levels as of 2pm Thursday the CBI is set to spike to 16.

This is an extremely oversold level. Ten and above has often led to market bounces. Not always immediately, though. It got up into the 40’s in July 2002 and October 2008.

For more on the CBI and what this all suggests you may want to check out the CBI posts.

https://quantifiableedges.blogspot.com/search/label/CBI

For more CBI updates toward the close you may follow me on Twitter.

https://twitter.com/qerob

Lots of different ways to look at this morning’s gap.

So the big question I got yesterday from readers was “What’s the CBI reading?” For those new to the blog the CBI is my Capitulative Breadth Indicator. There is a system I’ve traded since 2005 that I call my Catapult System. It basically looks to buy into S&P 100 stocks that are undergoing capitulative selling. The CBI measures the number of active triggers. When it moves up to levels of 7-10 or more it suggests the market as a whole is becoming oversold to the point that a reversal is highly likely. Extreme selloffs like October 2008 and September 2001 have seen it go much higher (into the 40’s). I wrote many posts about the CBI in 2008 and 2009 since there were so many selloffs that induced high readings. For more information and related research you may us the link below.

https://quantifiableedges.blogspot.com/search/label/CBI

Also, below is the original CBI intro post and explanation.

https://quantifiableedges.blogspot.com/2008/01/my-capitulative-breadth-indicator.html

Since the March 2009 bottom the CBI has not had a significant reading, with the highest only reaching 3. It hit 2 a few days ago and even with yesterday’s selling did not move any higher. Though I checked in the middle of the 2:45 madness and if the market closed there it would have been a “6”. A high CBI is certainly not required for a rally, but I’m personally more comfortable getting aggressively long when I see it.

Should the CBI spike higher over the next few days I will be sure to note it here. And as always I will share the individual Catapult trades that make up the CBI in the Subscriber Letter.

As probably 99% of the people who read Quantifiable Edges are aware, the Traderfeed blog, written by Dr. Brett Steenbarger is nearing an end.

Over the last several years Dr. Brett’s provided a wonderful example for traders, bloggers, and service providers. The energy he put towards the blog and the rest of his work was astounding. His posts were consistently thought provoking and provided many sparks for further research on this site and others. And he’s done it with the kind of integrity not often found on Wall St.

Quantifiable Edges would have come to be without Dr. Brett. But without his inspiration, support, and encouragement throughout the last few years it certainly wouldn’t be as far along as it currently is. Any blog readers or subscribers who have benefitted from my work should be aware that some credit needs to go to the good doctor.

As readers know, I try to quantify most everything here. While it’s impossible to quantify Dr. Brett’s contribution, below is a never-before-seen picture that tells a (true) story of something that happened back in 2008…

Of course that’s just one small example.

Thank you Dr. Brett. Congratulations on your new endeavor. Whoever convinced you to join their firm will surely benefit greatly, just as so many others have over the years. While you will soon be silent on the internet, I look forward to eventually hearing of the good things you’ll accomplish in the next several years.