DOCSLIB.ORG

June 22, 2020

Total Page：16

File Type：pdf, Size：1020Kb

Download full-text PDF Read full-text
June 22, 2020 Technical Scoop June 22, 2020 From David Chapman, Chief Strategist [email protected] For Technical Scoop enquiries: 416-523-5454 For Enriched InvestingTM strategy enquiries and for Canadian Conservative Growth Strategy enquiries: 416-203-3028 Slowed Fed, soaring stocks, rioting streets, top 20, bottom 80, coronavirus soars, vaccine race, election nears It was barely noticeable but the Fed`s asset purchases may have slowed. This past week Fed assets actually went down $74 billion. Is the punch bowl being taken away? But the huge ramp up in bond purchases and liquidity provisions have seen the balance sheets of the Fed, the BOJ, the BOE, the ECB and the BofC soar. And the stock markets soared with it. Great for Wall Street but all Main Street sees is rising unemployment, falling job vacancies, a pandemic and protests and riots on the streets. And with it the inequality grows as the past decade or so has primarily benefitted the top 20% while the bottom 80% falls further behind. Stock markets faltered on Friday as coronavirus cases soared in the U.S. and Apple shut down stores previously opened. The topping process continues but sectors such as golds, materials, metals, high tech and biotech continue to benefit. For example, Constellation Software Inc., a technology company that builds, manages and acquires vertical market software businesses and is held in the Canadian Conservative Growth Strategy*, has increased more than 16% in price so far in 2020. Our Chart of the Week (page 9) considers whether year-over- year June retail sales in the U.S. will pull into positive territory. The race for a vaccine is intensifying with some even believing we`ll see something by the election that is now only about 4 ½ months away. Summer is now upon us and while markets could falter here once a temporary bottom is found we could still rally again into August or September. Enjoy the summer as best you can. And have a great week. DC * Reference to the Canadian Conservative Growth Strategy and its investments is added by Margaret Samuel, President, CEO and Portfolio Manager of Enriched Investing Incorporated who can be reached at 416-203-3028 or [email protected] Enriched Investing Incorporated P.O. Box 1016, TD Centre, Toronto, ON M5K 1A0 ph: 416.203.3028 fx: 416.203.8825 www.enrichedinvesting.com e-mail: [email protected] 1 of 37 “What I’m looking at is not the day-to-day gyrations of the stock market, but the long-term ability for the United States and the entire world economy to regain its footing. And, you know, the stock market is sort of like a tracking poll in politics. It bobs up and down day to day, and if you spend all your time worrying about that, then you’re probably going to get the long-term strategy wrong. On the other hand, what you’re now seeing is profit and earning ratios are starting to get to the point where buying stocks is a potentially good deal if you’ve got a long-term perspective on it.” —Barack Hussein Obama II, 44th president of the United States, March 3, 2009; b. 1961 “I’m a strong believer in free enterprise, so my natural instinct is to oppose government intervention. I believe companies that make bad decisions should be allowed to go out of business. Under normal circumstances, I would have followed this course. But these are not normal circumstances. The market is not functioning properly. There has been a widespread loss of confidence, and major sectors of America’s financial system are at risk of shutting down. The government’s top economic experts warn that, without immediate action by Congress, America could slip into a financial panic and a distressing scenario would unfold. More banks could fail, including some in your community. The stock market would drop even more, which would reduce the value of your retirement account. The value of your home could plummet. Foreclosures would rise dramatically.” —George W. Bush, 43rd president of the United States, September 24, 2008; b. 1946 “It may be disappointing, but I think it is neither prudent nor appropriate for any president to comment on the hour-by-hour or the day-by-day movements of the market.” —William Jefferson Clinton, 42nd president of the United States, October 28, 1997; b. 1946 Clinton probably had it right. Apparently, Presidents Roosevelt, Hoover, and Truman avoided any mention of stock markets, especially in the wake of the 1929 stock market collapse and the Great Depression. President Reagan was predictably folksy about it after the 1987 stock market crash and President Carter, in his way, was more blunt about things, particularly after the sharp rise in oil prices in the mid to late 1970s. Predictably, President Obama was criticized for his remarks above about the stock market, with quips about his moving from being commander-in-chief to stockbroker-in-chief. We famously recall former Prime Minister Stephen Harper telling people that “good buying opportunities are opening up” during the height of the 2008 financial panic. That was on October 8, 2008. Afterwards the TSX Composite fell another 25%. President Trump has taken a completely different tack from his predecessors. He tweets constantly about the economy and the stock market. He started on his first day in office and usually has a comment daily. That’s at least 1,245 tweets about the economy and the stock market. Some estimates have it as double or triple that number. He hangs his presidency on the performance of the stock market and the economy. No wonder there’s constant pressure on the Fed to lower interest rates and ramp up bond buying to help push up the stock market. As we have consistently pointed, one can thank the Fed for this stock market rally. And, as an extension, one can thank the central banks of the major economies for their policies that have benefitted the stock market. So, it is the Fed, the BofC, the BOJ, the BOE, the ECB, and even PBOC we should thank. Without their largesse of bond-buying ramping up their balance sheets to unheard-of levels, the stock market today might be even Enriched Investing Incorporated P.O. Box 1016, TD Centre, Toronto, ON M5K 1A0 ph: 416.203.3028 fx: 416.203.8825 www.enrichedinvesting.com e-mail: [email protected] 2 of 37 lower than it was in March 2020. No wonder sudden stock market guru, founder of Barstools Sports Dave Portnoy quips that “stocks only go up.” Well, they do, until they don’t. Central Bank Assets 2007–present (millions) Source: www.stlouisfed.org Since the beginning of March 2020, the central banks have seen their assets grow considerably. The Fed is up US$2.5 trillion, the European Central Bank (ECB) is up €1.0 trillion, and the Bank of Japan (BOJ) is up ¥0.5 trillion. During the same period, assets for the Bank of Canada (BofC) rose about Cdn$350 billion, almost tripling. And fiscal deficits have exploded as well. In the U.S., a record $3.5 trillion and heading higher. In Canada, $250 billion and probably headed higher. Then it should be no surprise that the stock markets have responded. There is a direct correlation. Source: www.stockcharts.com Enriched Investing Incorporated P.O. Box 1016, TD Centre, Toronto, ON M5K 1A0 ph: 416.203.3028 fx: 416.203.8825 www.enrichedinvesting.com e-mail: [email protected] 3 of 37 The above chart shows the return on the key indices since the lows in March when the impact of the all the monetary stimulus began to kick in. The TSX has gained 22.4%, the S&P 500 is up 22.8.0%, the Euro Next 100 jumped 27.0%, the Dow Jones Industrials (DJI) up 22.2%, the NASDAQ up 35.5%, and the Tokyo Nikkei Dow (TKN) has gained 31.4%. The Fed has said it will not be deterred from pursuing its mission just because the stock market is rallying. At the current rate, the Fed balance sheet could be at $10 trillion in a year or so, up from the current $7 trillion. And we have a president to re-elect, not that a connection could be made. While Fed Chairmen have fought with presidents indirectly, they are more often deferential to their wishes, again indirectly. Or as Trump has discovered the Fed refuses to take his bait and comment on the president`s wishes. The Fed obviously doesn’t seem too concerned that they may be creating stock market bubbles. They are also creating another bubble in debt as corporations have scrambled to issue debt in 2020. The bulk of it has been high-grade corporate debt, but when one reads that bankrupt companies like Hertz were trying to raise between $500 million and $1 billion one knows that something is wrong. Hertz is a company already under $20 billion in debt and its inventory of cars is overpriced. The stock is probably worthless. Hertz failed in its attempt to raise cash but, overall, more than $1 trillion in new corporate debt has been issued in 2020 to either restructure debt, build cash reserves, or pay down bank lines for U.S. corporations. Could the debt rush be creating zombie companies? We note that some of the biggest stock gainers since March have been airlines, cruise lines, and retailers and they have also raised fresh debt. Airline and cruise companies have seen their business collapse over 80%, yet, amazingly, in the recent rebound some of their stock was up 90%.
Load more

Recommended publications
  • The Four Most Reliable Technical Indicators
    The Four Most Reliable Technical Indicators By Alan Bush ADM Investor Services New Historical Highs Indicate Follow Through Strength There is a rule of thumb that anytime a market makes new historical highs, there will probably be follow through to the upside. In some cases, the additional strength can be substantial. The best and most recent example of this is the record highs in stock index futures. The logic behind this is that, if the fundamentals are powerful enough to propel a market to new historical highs, they are probably strong enough to persist for a while longer and push prices even higher. Therefore, the probabilities of financial success are much greater when trading from the long side, when new historical highs have been registered, than by trading from the short side in an attempt to guess when a bull market of this magnitude may eventually top out. Looking at Double and Triple Bottoms and Tops in a Different Way First let’s start with the basics. The double bottom and double top patterns are common and easily recognizable chart patterns, which occur in all timeframes. The double bottom appears as two consecutive lows at approximately the same price and the double top pattern is formed when two consecutive peaks are registered at approximately the same level. Triple bottom and triple top formations are less common, although the rules for double bottoms and tops and triple bottoms and tops are the same. Double Bottom Double Top Triple Bottom Triple Top Traditional charting techniques tell us that it is a good idea to buy on a retest of multiple bottoms and sell on a retest of an area of multiple tops.
    [Show full text]
  • Identifying Chart Patterns with Technical Analysis
    746652745 A Fidelity Investments Webinar Series Identifying chart patterns with technical analysis BROKERAGE: TECHNICAL ANALYSIS BROKERAGE: TECHNICAL ANALYSIS Important Information Any screenshots, charts, or company trading symbols mentioned are provided for illustrative purposes only and should not be considered an offer to sell, a solicitation of an offer to buy, or a recommendation for the security. Investing involves risk, including risk of loss. Past performance is no guarantee of future results Stop loss orders do not guarantee the execution price you will receive and have additional risks that may be compounded in pe riods of market volatility. Stop loss orders could be triggered by price swings and could result in an execution well below your trigg er price. Trailing stop orders may have increased risks due to their reliance on trigger pricing, which may be compounded in periods of market volatility, as well as market data and other internal and external system factors. Trailing stop orders are held on a separat e, internal order file, place on a "not held" basis and only monitored between 9:30 AM and 4:00 PM Eastern. Technical analysis focuses on market action – specifically, volume and price. Technical analysis is only one approach to analyzing stocks. When considering which stocks to buy or sell, you should use the approach that you're most comfortable with. As with all your investments, you must make your own determination as to whether an investment in any particular security or securities is right for you based on your investment objectives, risk tolerance, and financial situation. Past performance is no guarantee of future results.
    [Show full text]
  • On-Line Manual for Successful Trading
    On-Line Manual For Successful Trading CONTENTS Chapter 1. Introduction 7 1.1. Foreign Exchange as a Financial Market 7 1.2. Foreign Exchange in a Historical Perspective 8 1.3. Main Stages of Recent Foreign Exchange Development 9 The Bretton Woods Accord 9 The International Monetary Fund 9 Free-Floating of Currencies 10 The European Monetary Union 11 The European Monetary Cooperation Fund 12 The Euro 12 1.4. Factors Caused Foreign Exchange Volume Growth 13 Interest Rate Volatility 13 Business Internationalization 13 Increasing of Corporate Interest 13 Increasing of Traders Sophistication 13 Developments in Telecommunications 14 Computer and Programming Development 14 FOREX. On-line Manual For Successful Trading ii Chapter 2. Kinds Of Major Currencies and Exchange Systems 15 2.1. Major Currencies 15 The U.S. Dollar 15 The Euro 15 The Japanese Yen 16 The British Pound 16 The Swiss Franc 16 2.2. Kinds of Exchange Systems 17 Trading with Brokers 17 Direct Dealing 18 Dealing Systems 18 Matching Systems 18 2.3. The Federal Reserve System of the USA and Central Banks of the Other G-7 Countries 20 The Federal Reserve System of the USA 20 The Central Banks of the Other G-7 Countries 21 Chapter 3. Kinds of Foreign Exchange Market 23 3.1. Spot Market 23 3.2. Forward Market 26 3.3. Futures Market 27 3.4. Currency Options 28 Delta 30 Gamma 30 Vega 30 Theta 31 FOREX. On-line Manual For Successful Trading iii Chapter 4. Fundamental Analysis 32 4.1. Economic Fundamentals 32 Theories of Exchange Rate Determination 32 Purchasing Power Parity 32 The PPP Relative Version 33 Theory of Elasticities 33 Modern Monetary Theories on Short-term Exchange Rate Volatility 33 The Portfolio-Balance Approach 34 Synthesis of Traditional and Modern Monetary Views 34 4.2.
    [Show full text]
  • 1 Candlestick Patterns Version 30 Description
    Candlestick Patterns Version 30 Description: The Candlestick Pattern ShowMe analysis technique for RadarScreen®, Chart Analysis, and the Scanner shows when certain candlestick patterns occur for stocks, ETFs, Forex, etc. The indicator can be used to search for the following candlestick patterns: doji, bullish engulfing, bearish engulfing, hammer, dark cloud, piercing pattern, morning star, evening star, inverse hammer, bullish harami, bearish harami, bullish kicker, bearish kicker, shooting star, bullish railroad tracks, bearish railroad tracks, tweezer bottom, tweezer top, island reversal bottom, island reversal top, bullish marubozu and bearish marubozu, rally-base-rally, drop-base-drop, rally-base and drop-base, inside bar, three crows, three soldiers. You can have the indicator look for all the patterns or just the ones you are interesting in analyzing. This indicator will work on any time frame as well as tick charts. Alerts, if enable, will be generated for all enabled candlestick patterns. Inputs: doji_enabled = enables(true) or disables(false) the indicator to look for the doji candlestick pattern. The default is “true”. doji_text = Allows you to customize the display text. The default is “D”. doji_color = Allows you to customize the display text’s color. The default is yellow. doji_body_percent = Allows you to customize the body size of the doji with respect to the total candlestick size from high to low. The default is “5” for 5%. bull_engulf_enabled = enables(true) or disables(false) the indicator to look for the bullish engulfing candlestick pattern. The default is “true”. bull_engulf _text = Allows you to customize the display text. The default is “E”. bull_engulf _color = Allows you to customize the display text’s color.
    [Show full text]
  • Rising Wedge, Falling Wedge (PDF)
    RISING WEDGE, FALLING WEDGE Rewarding patterns…provided you stay disciplined! Introduction The wedge is a very usual chartist pattern which is made of two converging trendlines that go in the same direction, both upwards or both downwards. As such, it can be immediately distinguished from a triangle. This pattern can be found on every timeframe, from the monthly charts to intraday price action. There are two sorts of wedges that have opposite consequences: Falling wedges, mostly completed following a sharp slump and which have a bullish implication, Rising wedges, which foreshadow a violent, downwards reversal phase. Their bearish bias is all the more pronounced since they are completed after a long period of time, and following a clear uptrend. But regarding most wedges as reversal patterns are just an opinion on our own. Many authors, however, consider that following the examples of triangles, pennants and flags, wedges are essentially continuation patterns, sloped against the trend. True, you can find falling wedges just in the middle of a bullish trend, or rising wedges within a bearish trend. A perfect example of continuation rising wedge made on the Japanese Topix index in 2007 is shown on the chart below. 1 Setting up precise figures on the continuation or reversal nature of wedges is hard and useless, we think. What is of more interest is that continuation wedges tend to complete in a generally shorter lapse of time than reversal wedges. Furthermore, the debate over the reversal/continuation nature of wedges is of minor importance as these patterns are overwhelmingly broken in the "natural" sense: downwards for a rising wedge, upwards for a falling wedge.
    [Show full text]
  • Technical Analysis Explained by Martin J
    Contents Contents ........................................................................................................................................................ 1 Introduction .................................................................................................................................................. 3 Chapter I ........................................................................................................................................................ 4 What is Technical Analysis?....................................................................................................................... 4 1.1 Definition of Technical Analysis ...................................................................................................... 4 1.2. Philosophy of Technical Analysis .................................................................................................... 4 1.3. Technical Analysis vs. Fundamental Analysis ................................................................................. 5 1.4. Technician or Chartist? Is There Any Difference? .......................................................................... 6 1.5. Different Theories on Technical Analysis ....................................................................................... 6 Chapter II ....................................................................................................................................................... 8 Trend In Terms of Technical Analysis .......................................................................................................
    [Show full text]
  • Copyrighted Material
    JWBK100-IND.qxd 2/21/08 9:07 AM Page 253 epg WILEY:JOBS:Wiley_PT:Logan:JWBK100_QXD%:Printer File:JW Index Advanced Micro Devices (AMD), 147 Bear market, 133 Advent Software Inc. (ADVS), Bears, 9 101, 102 Berry Petroleum Co. (BRY), 177, 178 Amateur hour, 14 Beta, 110 AMB Property Corp. (AMB), 186 Biolase Technology Inc. (BLTI), 168 American Stock Exchange (AMEX), Biomarin Pharmaceuticals (BMRN), 201 59 Area gap, 153 Blow-off top, 49 Arithmetic scale, 111, 113 Body gap, 162 Autozone Inc. (AZO), 33 Bollinger, John, 103, 109 Average, 116–117 Bollinger Bands, 109 Average daily volume, 101–102 Bollinger on Bollinger Bands (Bollinger), 103 Bar, 8 Bollinger squeeze, 109 Bar chart, 5, 8 Bolt Technology Corp. (BTJ), 57–58 Bar graph, 102–103 Bottom, 118–119. See also peaks and Basing action, 136 bottoms Bearish (black) candle, 12 Box range, 136 Bearish engulfing pattern, 56–58, 60, Breakaway gap, 153, 154 236 Breakdown, 175 Bearish harami, 62–63, 236 Break of resistance, 176 Bearish harami cross, 62, 236 Break of support, 175 Bearish reversal patterns, quick Breakout, 176 reference, 235–236 Broad market environment, 83 bearish engulfing,COPYRIGHTED 236 Bulkowski, MATERIAL Thomas, 107 bearish harami, 236 Bullish (white) candle, 12 dark cloud cover, 236 Bullish engulfing pattern, 58–59, 237 doji (northern), 235–236 Bullish harami, 63–64, 237 evening star, 236 Bullish harami cross, 63 hanging man, 235 Bullish reversal patterns, quick shooting star, 235 reference, 237–238 Bearish shadows, 91, 92 bullish engulfing, 237 Bearish star, 18, 66, 67 bullish harami, 238 253 JWBK100-IND.qxd 2/21/08 9:07 AM Page 254 epg WILEY:JOBS:Wiley_PT:Logan:JWBK100_QXD%:Printer File:JW 254 INDEX doji (southern), 237 psychology of, 86–89 hammer, 237 trading opportunities and, 201–207 inverted hammer, 237 Candlesticks, 8 morning star, 238 Capitulation, 17 piercing pattern, 237 Catching air, 136 Bullish shadows, 91–92 Chart analysis practice sets, 220–231 Bullish star, 66–67 Chart patterns, 8 Bull market, 133 Checkpoint Systems Inc.
    [Show full text]
  • Jan/Feb 2008
    CHART PATTERNS SECTORS MARKET UPDATE Cup-With-Handle Weak XLF US Dollar Index For Intel Turns Weaker Tries To Firm TrTradersadersJANUARY/FEBRUARY 2008 US$7.95 .com THE MAGAZINE FOR INSTITUTIONAL AND PROFESSIONAL TRADERS TM CHASING THE TREND reserved. Moving averages 10 NASDAQ BREAKS OUT rights All Surging in a bullish atmosphere 14 Inc. STAPLES TESTS A DOUBLE TOP A tradable move? 23 Analysis, TSX ENERGY INDEX Still gushing higher 29 Technical DUELING WEDGES © For Alcoa 32 2008 SEMIS ARE LAGGING Relative weakness a bad omen? 33 Copyrights LILLY WINDS UP FOR THE PITCH Winding ever tighter 37 DOLLAR DOWN AGAINST NATURAL GAS, WEEKLY VS. DAILY THE YEN Revisit the ascending triangle 41 Change service requested service Change Seattle, WA 98116-4499 WA Seattle, 4757 California Ave. SW Ave. California 4757 Traders.com page 2 reserved. •Traders rights .com All Inc. Analysis, For moreinformation, visittheS&Cadindexat Technical © 2008 Traders.com/reader/ Copyrights January/February 2008 January/February 2008 Traders.com • page 3 What Can eSignal Do for You? reserved. rights All Make more successful trades with reliable data, advanced charting, Inc. news and integrated trading Analysis, Technical It’s no secret — successful traders have discovered Use market scanners to pull in your best © the many benefits of eSignal’s award-winning data and opportunities from 1,000s of issues software. Let advanced charting with 100+ free and eSignal’s real-time quotes, scanners, news and charts proprietary technical analysis studies show 2008 make it easier to know what to trade and how to trade it. you when to make your market moves Find out what eSignal can do for you: Back test your strategy to find out if it could Receive award-winning, real-time stock, futures, help you make better trades options and Forex quotes plus market-moving Use eSignal’s seamless integration to trade news with your choice of broker Copyrights Tens of thousands of traders just like you use and Ask trust the best value in financial market data.
    [Show full text]
  • Big Profit Patterns Using Candlestick Signals and Gaps”
    “Big Profit Patterns Using Candlestick Signals And Gaps” How To Make A Living Trading The Markets By Mastering Easy To Learn Techniques Hardly Anyone Else Knows About A Candlestick Forum publication - Years of Candlestick Analysis made available in concise formats. Information that when learned and understood will revolutionize and discipline your investment thinking. Copyright @ by Stephen W. Bigalow 2002 Published by The Candlestick Forum LLC All rights reserved. “Big Profit Patterns Using Candlestick Signals And Gaps” Table of Contents Powerful Implications of Gaps.......................................................5 Gaps at the Bottom..........................................................................7 Measuring Gaps.............................................................................15 Gaps at the Top............................................................................16 Selling Gaps.................................................................................20 Gapping Plays..............................................................................23 Dumpling Tops and Fry Pan Bottoms........................................25 San-Ku - Three Gaps Up..............................................................29 Breakouts......................................................................................33 The J-Hook Pattern........................................................................36 Island Reversals............................................................................41 Bad News
    [Show full text]
  • [Stevens]Essential Technical Analysis Tools and Techniques to Spot
    ESSENTIAL TECHNICAL ANALYSIS Tools and Techniques to Spot Market Trends LEIGH STEVENS JOHN WILEY & SONS, INC. www.rasabourse.com www.rasabourse.com ESSENTIAL TECHNICAL ANALYSIS Tools and Techniques to Spot Market Trends www.rasabourse.com Wiley Trading Advantage Beyond Candlesticks / Steve Nison Beyond Technical Analysis, Second Edition / Tushar Chande Contrary Opinion / R. Earl Hadady Cybernetic Trading Strategies / Murray A. Ruggiero, Jr. Day Trader’s Manual / William F. Eng Dynamic Option Selection System / Howard L. Simons Encyclopedia of Chart Patterns / Thomas Bulkowski Exchange Traded Funds and E-mini Stock Index Futures / David Lerman Expert Trading Systems / John R. Wolberg Four Steps to Trading Success / John F. Clayburg Fundamental Analysis / Jack Schwager Genetic Algorithms and Investment Strategies / Richard J. Bauer, Jr. Hedge Fund Edge / Mark Boucher Intermarket Technical Analysis / John J. Murphy Intuitive Trader / Robert Koppel Investor’s Quotient / Jake Bernstein Long-Term Secrets to Short-Term Trading / Larry Williams Managed Trading / Jack Schwager Mathematics of Money Management / Ralph Vince McMillan on Options / Lawrence G. McMillan Neural Network Time Series Forecasting of Financial Markets / E. Michael Azoff New Fibonacci Trader / Robert Fischer, Jens Fischer New Market Timing Techniques / Thomas R. DeMark New Market Wizards / Jack Schwager New Money Management / Ralph Vince New Options Market, Fourth Edition / Max Ansbacher New Science of Technical Analysis / Thomas R. DeMark New Technical Trader / Tushar Chande and Stanley S. Kroll New Trading Dimensions / Bill Williams Nonlinear Pricing / Christopher T. May Option Advisor / Bernie G. Schaeffer Option Market Making / Alan J. Baird Option Pricing: Black–Scholes Made Easy / Jerry Marlow www.rasabourse.com Option Strategies, Second Edition / Courtney Smith Options Course / George A.
    [Show full text]
  • Charting Made Easy
    Charting Made Easy B Y J O H N J . M U R P H Y Contents Introduction . ix Chapter 1 WHY IS CHART ANALYSIS SO IMPORTANT? . 1 Market Timing . 2 Chapter 2 WHAT IS CHART ANALYSIS? . 3 Charts Reveal Price Trends . 4 Types of Charts Available. 5 Any Time Dimension . 5 Chapter 3 HOW TO PLOT THE DAILY BAR CHART . 7 Charts Are Used Primarily to Monitor Trends . 7 Chapter 4 SUPPORT AND RESISTANCE TRENDLINES AND CHANNELS . 9 Chapter 5 REVERSAL AND CONTINUATION PRICE PATTERNS . 13 Reversal Patterns The Head and Shoulders . 13 Double and Triple Tops and Bottoms . 14 Saucers and Spikes. 15 Continuation Patterns Triangles . 16 Flags and Pennants . 20 Chapter 6 PRICE GAPS. 23 Chapter 7 THE KEY REVERSAL DAY. 25 Chapter 8 PERCENTAGE RETRACEMENTS . 27 Chapter 9 THE INTERPRETATION OF VOLUME. 29 Volume Is an Important Part of Price Patterns . 30 On-Balance Volume (OBV). 30 Plotting OBV . 31 OBV Breakouts. 32 Other Volume Indicators . 32 Chapter 10 USING DIFFERENT TIME FRAMES FOR SHORT- AND LONG-TERM VIEWS . 35 Using Intraday Charts . 35 Going from the Long Term to the Short Term . 36 Chapter 11 USING A TOP-DOWN MARKET APPROACH . 39 The First Step:The Major Market Averages . 39 Different Averages Measure Different Things . 40 The Second Step: Sectors and Industry Groups . 41 The Third Step: Individual Stocks . 41 Chapter 12 MOVING AVERAGES . 45 Popular Moving Averages. 45 Bollinger Bands . 46 Moving Average Convergence Divergence (MACD) . 46 Chapter 13 OSCILLATORS . 47 Relative Strength Index (RSI) . 47 Stochastics . 47 Any Time Dimension . 49 Chapter 14 RATIOS AND RELATIVE STRENGTH .
    [Show full text]
  • April 2003 Vol
    AIQ Opening BellNewsletter April 2003 Vol. 12 Issue 4 Equity Bubble Aftermath In This Issue Post-bubble problems for the Be Aware of Post-Bubble Problems technical analyst revealed .. 1 In Technical Analysis—Making Review of AIQ's March market timing signals ..................... 4 Adjustments Is Critical! Upcoming AIQ Seminars .... 4 By David Vomund Testing reveals the least creases in effective Expert Design Studio equal incre- rules--combine them for short- hese are extraordinary ments. For a Place selling strategies................. 5 times for the market. In given period Vomund Photo the last five years we’ve of time, the Data Maintenance .............. 8 experienced the largest graph en- Here S&P 500 Changes .............. 8 equity bubble in U.S. compasses historyT and have also experienced a the highest bear market that is arguably worse and lowest than that of the Great Depression. In stock price DAVID VOMUND the aftermath of the bubble, technical and the analysis remains valid as market vertical (price) scale is divided into movement is still based on the laws of equal increments. This style of graph supply and demand. works fine for short-term charting, but The bubble and the ensuing bear market does pose “In the aftermath of the bubble, problems to many technical analysis remains valid as forms of analysis, market movement is still based on the however. In this article, we are expos- laws of supply and demand. The ing three post-bubble bubble and the ensuing bear market The Opening Bell Newsletter problems in technical pose problems, however. In this is a publication of AIQ Systems analysis.
    [Show full text]