DOCSLIB.ORG

Trading the Macd+H the Dow's Moment of Truth the Nikkei

Total Page：16

File Type：pdf, Size：1020Kb

Download full-text PDF Read full-text
Trading the Macd+H the Dow's Moment of Truth the Nikkei CHART PATTERNS SECTORS MARKET UPDATE Oversold Bounce For Sideways NASDAQ The Greenback Semiconductors Channels Higher TrTradersaders MARCH/APRIL 2007 US$7.95 .com THE MAGAZINE FOR INSTITUTIONAL AND PROFESSIONAL TRADERS TM TRADING THE MACD+H reserved. Adding the histogram 10 rights THE DOW’S All MOMENT OF TRUTH Inc. Near the make-or-break point 14 THE NIKKEI BREAKDOWN Analysis, The decline continues 18 WHEN COPPER CRACKS The breakout has arrived 20 Technical © BLACK GOLD IS BACK Toward a seasonal sweet spot 22 2007 LOWERING RATES? Favoring the possibility 33 Copyrights BANKING BREAKOUT Breaking to new highs 37 WILL TRANSPORTS… SEMICONDUCTORS, WEEKLY AND DAILY Take a hike? 38 REMEMBER VOLATILITY? Watch for resistance 42 GE FALTERS A support break coming? 45 Traders.com 4757 California Ave. SW Seattle, WA 98116-4499 Change service requested page 2 • Traders reserved. .com rights All Inc. Analysis, For moreinformation, visittheS&Cadindexat Technical © 2007 Traders.com/reader Copyrights March/April 2007 March/April 2007 Traders.com • page 3 TRADE AT THE BIG KIDS’ reserved. rights TABLE. All ® Inc. E traordinary ® ® Analysis, POWER E*TRADE PRO FOR ACTIVE TRADERS. Technical $6.99-$9.99 © per stock and 5.05 % APY 2007 options trade New Complete Savings Account2 75¢ offered by E*TRADE Bank per options contract1 Copyrights Get started with 100 (800) 731-5226 commission-free trades3 getpoweretrade.com Click Call Visit For details and important information about Power E*TRADE, please visit getpoweretrade.com. 1. To qualify for $6.99 stock and options commissions & a 75¢ fee per options contract, you must execute 500 or more stock or options trades per month. To qualify for $9.99 stock and options commissions & a 75¢ fee per options contract, you must execute 10 – 49 stock or options trades per month or maintain a balance of $50,000 or more in combined E*TRADE accounts during a calendar quarter. Qualifi cation will be determined at the end of each quarter. To continue receiving these commission rates, you must requalify by maintaining a balance of $50,000 or more in combined E*TRADE accounts or by making at least 30 stock or options trades by the end of the following calendar quarter. 2. The Complete Savings Account is offered by E*TRADE Bank. Annual Percentage Yield is effective 12/05/06 and is subject to change. A $1 minimum deposit is required to open a new account. Withdrawal limits apply. Online statements required. 3. Commission-free trade offer applies to new Power E*TRADE accounts opened with $1,000 minimum deposit. The new account holder will receive a maximum of 100 free trade commissions for each stock or options trade executed within 30 days of the opening of the new qualifi ed account. You will pay the Power E*TRADE commission rate at the time of the trades ($9.99 for stock and options trades—plus an additional 75¢ per options contract). Your account will be credited $9.99 per stock or options trade within eight weeks of qualifying (excluding options contract fees). Other commission rates apply to customers who trade less than 30 times a quarter or maintain less than $50,000 in linked E*TRADE accounts. Account must be opened by December 31, 2007. Securities products and services offered by E*TRADE Securities LLC, Member NASD/SIPC, are not insured by the FDIC, are not guaranteed deposits or obligations of E*TRADE Bank, and are subject to investment risk, including possible loss of the principal invested. Banking and lending products and services are offered by E*TRADE Bank, a Federal savings bank, Member FDIC, or its subsidiaries. Bank deposits are FDIC insured up to $100,000. E*TRADE Securities LLC and E*TRADE Bank are separate but affi liated companies. System response and account access times may vary due to a variety of factors, including trading volumes, market conditions, system performance, and other factors. © 2007 E*TRADE FINANCIAL Corp. All rights reserved. For more information, visit the S&C ad index at Traders.com/reader page 4 • Traders.comTrTradersaders March/April 2007 .com THE MAGAZINE FOR INSTITUTIONAL AND PROFESSIONAL TRADERS TM TABLE OF CONTENTS MARCH/APRIL 2007 • VOLUME 5 NUMBER 2 METALS AND ENERGY 20 Copper Cracks 10 Trading The MACD Histogram, Part I by David Penn by David Penn The much-anticipated breakout from a multimonth As good as the moving average convergence/divergence is, symmetrical triangle has arrived. adding the histogram might make it even better. reserved. 21 Flag Breakout For XAU INDEXES by Arthur Hill 14 Short-Term Moment Of Truth For The Dow Despite the potential for a massive head & rights by Arthur Hill shoulders reversal pattern, the Philadelphia All The Dow Jones Industrial Average has corrected over the last Gold & Silver Index recently broke flag resistance, pointing to higher prices. three days, and this correction is nearing its make-or-break Inc. point. 22 Halliburton Takes A Rest 14 Short-Term QQQQ Sell? by Arthur Hill by David Penn After a big surge on high volume, Halliburton took a breather over the last two weeks. Traders should look for a breakout to What happens when long-term bulls become short-term bears? Analysis, signal a continuation higher. 16 NASDAQ Channels Higher 22 Black Gold Is Back by Arthur Hill by David Penn Despite a warning shot from the stochastic oscillator, the Breakouts in oil stocks appear as the group moves toward a NASDAQ remains in a rising channel and the trend has yet to Technical bend. seasonal sweet spot. © 16 Meeting Parameters On The S&P 500 24 The Gold Bugs Index Hits Support by Arthur Hill by Jacob Singer, PhC 2007 Every morning I look for certain stocks to buy, but they have The December decline in the Amex Gold Bugs Index hit to meet certain parameters. What does it mean if for the past support and recent firmness could foreshadow a break higher. three days, not a single stock has come up that meets those parameters? 25 Gold’s Three Trends by David Penn Bullish long-term, bearish intermediate term ... what does a 18 Nikkei Breaking Down Copyrights by Arthur Hill near-term breakout mean for gold going forward? The Nikkei 225 is breaking down on a number of fronts, and this points to a continuation of the April–June decline. 28 Crackin’ Crude by David Penn 18 NASDAQ Composite Index Shows Pending Negative divergences in the MACD histogram and stochastic Downleg anticipated the reversal in oil stocks. by Gary Grosschadl Has the Grinch stolen the Christmas rally, or is it already over CHART PATTERNS for the NASDAQ? 29 The S&P 500’s Cup With Handle by David Penn 19 The NASDAQ 100 Winds Up For The Pitch A classic chart pattern suggests more upside for the S&P 500 by Arthur Hill as the holiday season begins. A narrowing consolidation can’t last forever, and the NASDAQ 100 looks poised to break the recent trading range. 30 The Falling Three Method Here’s what to look for. by Paolo Pezzutti This candlestick pattern, which is quite rare and usually reliable, has provided some wrong signals lately. Copyright © 2006 Technical Analysis, Inc. All rights reserved. Information in this publication must not be stored or reproduced in any form without written permission from the publisher. Traders.com™ is published by Technical Analysis, Inc., 4757 California Ave. S.W., Seattle, WA 98116-4499. 1 206 938-0570 or 1 800 832-4642. Printed in the U.S.A. March/April 2007 reserved. rights All Inc. Analysis, For moreinformation visittheadindexat Technical © 2007 Traders.com/reader Copyrights Traders .com • page5 page 6 • Traders.comTrTradersaders March/April 2007 .com THE MAGAZINE FOR INSTITUTIONAL AND PROFESSIONAL TRADERS TM TABLE OF CONTENTS CHART PATTERNS 39 Small Caps Show Relative Weakness 32 by Arthur Hill A Cup With Handle For Treasury Notes The S&P Small-Cap iShares has been underperforming the by David Penn S&P 500 this month, and a bearish candlestick reversal points A classic chart pattern suggests bullish times for bonds. to more weakness. 33 Long-Term Rates Trending Lower by Arthur Hill TECHNICAL INDICATORS reserved. The 10-year Treasury note yield found support over the last 41 A Tick Indicator Overview two months but remains short of a reversal, and the odds favor by Paolo Pezzutti a move lower for interest rates. The tick is a valuable tool, especially when utilized in a very rights short time frame, as it is quite effective at measuring market All 34 A Head & Shoulders Top In Retail? breadth. It is popular among daytraders and scalpers, as it can by David Penn help assess the strength of market moves. An autumn consolidation in the retail HOLDRS hints at the Inc. possibility of a move lower for retail stocks. 42 Remember The Volatility Index? by Arthur Hill 35 An Oversold Bounce For The Greenback The NASDAQ 100 Volatility Index has been slowly building a by Arthur Hill base, and traders should watch for a resistance breakout to The US Dollar Index shows signs of firming and looks ripe for solidify a trend change. Analysis, an oversold bounce. However, the bigger trend is down—will resistance be around? 42 Dollar Divergences: Up And Down by David Penn SECTORS Negative divergences took the dollar down in October. Will positive divergences bring Technical 36 Sideways Semiconductors the dollar back up a year later? © by David Penn Waiting for signs of directionality as the semiconductor 44 eBay Tests Overhead Resistance HOLDRS works its way through a potential 1-2-3 trend by Gary Grosschadl 2007 reversal setup. eBay has come off a summer bottom for a nice gain, but what’s it got in store now? 37 Internet HOLDRS Reaches Resistance by Arthur Hill 45 GE Starts To Falter The Internet HOLDRS rebounded sharply over the last four by Arthur Hill months, but the rally is running into resistance and the GE has underperformed the S&P 500 since mid-October, and Copyrights exchange traded fund is still lagging the NASDAQ.
Load more

Recommended publications
  • Predicting SARS-Cov-2 Infection Trend Using Technical Analysis Indicators
    medRxiv preprint doi: https://doi.org/10.1101/2020.05.13.20100784; this version posted May 20, 2020. The copyright holder for this preprint (which was not certified by peer review) is the author/funder, who has granted medRxiv a license to display the preprint in perpetuity. All rights reserved. No reuse allowed without permission. Predicting SARS-CoV-2 infection trend using technical analysis indicators Marino Paroli and Maria Isabella Sirinian Department of Clinical, Anesthesiologic and Cardiovascular Sciences, Sapienza University of Rome, Italy ABSTRACT COVID-19 pandemic is a global emergency caused by SARS-CoV-2 infection. Without efficacious drugs or vaccines, mass quarantine has been the main strategy adopted by governments to contain the virus spread. This has led to a significant reduction in the number of infected people and deaths and to a diminished pressure over the health care system. However, an economic depression is following due to the forced absence of worker from their job and to the closure of many productive activities. For these reasons, governments are lessening progressively the mass quarantine measures to avoid an economic catastrophe. Nevertheless, the reopening of firms and commercial activities might lead to a resurgence of infection. In the worst-case scenario, this might impose the return to strict lockdown measures. Epidemiological models are therefore necessary to forecast possible new infection outbreaks and to inform government to promptly adopt new containment measures. In this context, we tested here if technical analysis methods commonly used in the financial market might provide early signal of change in the direction of SARS-Cov-2 infection trend in Italy, a country which has been strongly hit by the pandemic.
    [Show full text]
  • 07/20/21 1 the All New Market Analysis Tim Ord, Editor 16928 Van
    07/20/21 The All New Market Analysis Tim Ord, Editor 16928 Van Dorn Street Walton, Nebraska 68461 www.ord-oracle.com (402) 413-0980 . [email protected] SPX Monitoring purposes; Sold 7/20/21 SPX 4325= gain .08%; long SPX 6/28/21 at 4290.61. Monitoring purposes GOLD: Long GDX on 10/9/20 at 40.78. Long Term SPX monitor purposes; Neutral We have "800" phone update that cost $6.00 per call, and billed to a credit card. Call (1-970-586-4760) for sign up. We update Eastern Time at 9:45 and 4:10. Question? Call (402) 413-0980. Yesterday we said, “CNN Fear Creed indicator closed 18 (https://money.cnn.com/data/fear-and-greed/ ); readings below 20 have marked lows and at least near lows in the past. The 2 day TRIN closed today at 3.37; reading above 3.00 are bullish. The TRIN is showing there is panic in the market. Also the tick closed at -209 and the TRIN closed at 1.58 today and that combination has been bullish short term. Today’s surge in volume suggests a “Selling Climax”. Most likely there will be a bounce short term that may find resistance on today’s down gap. If the 1 Signals are provided as general information only and are not investment recommendations. You are responsible for your own investment decisions. Past performance does not guarantee future performance. Opinions are based on historical research and data believed reliable, there is no guarantee results will be profitable. Not responsible for errors or omissions.
    [Show full text]
  • A Test of Macd Trading Strategy
    A TEST OF MACD TRADING STRATEGY Bill Huang Master of Business Administration, University of Leicester, 2005 Yong Soo Kim Bachelor of Business Administration, Yonsei University, 200 1 PROJECT SUBMITTED IN PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR THE DEGREE OF MASTER OF BUSINESS ADMINISTRATION In the Faculty of Business Administration Global Asset and Wealth Management MBA O Bill HuangIYong Soo Kim 2006 SIMON FRASER UNIVERSITY Fall 2006 All rights reserved. This work may not be reproduced in whole or in part, by photocopy or other means, without permission of the author. APPROVAL Name: Bill Huang 1 Yong Soo Kim Degree: Master of Business Administration Title of Project: A Test of MACD Trading Strategy Supervisory Committee: Dr. Peter Klein Senior Supervisor Professor, Faculty of Business Administration Dr. Daniel Smith Second Reader Assistant Professor, Faculty of Business Administration Date Approved: SIMON FRASER . UNI~ER~IW~Ibra ry DECLARATION OF PARTIAL COPYRIGHT LICENCE The author, whose copyright is declared on the title page of this work, has granted to Simon Fraser University the right to lend this thesis, project or extended essay to users of the Simon Fraser University Library, and to make partial or single copies only for such users or in response to a request from the library of any other university, or other educational institution, on its own behalf or for one of its users. The author has further granted permission to Simon Fraser University to keep or make a digital copy for use in its circulating collection (currently available to the public at the "lnstitutional Repository" link of the SFU Library website <www.lib.sfu.ca> at: ~http:llir.lib.sfu.calhandlell8921112~)and, without changing the content, to translate the thesislproject or extended essays, if .technically possible, to any medium or format for the purpose of preservation of the digital work.
    [Show full text]
  • Stock Chart Pattern Recognition with Deep Learning
    Stock Chart Pattern recognition with Deep Learning Marc Velay and Fabrice Daniel Artificial Intelligence Department of Lusis, Paris, France [email protected] http://www.lusis.fr June 2018 ABSTRACT the number of patterns recognized implies having a human examining candlestick charts in order to deduce signal char- This study evaluates the performances of CNN and LSTM acteristics before implementing the detection using condi- for recognizing common charts patterns in a stock historical tions specific to that pattern. Adding different parameters data. It presents two common patterns, the method used to to modulate ratios allows us to tweak the patterns’ charac- build the training set, the neural networks architectures and teristics. This technique does not have any generalization the accuracies obtained. potential. If the pattern is slightly outside of the defined Keywords: Deep Learning, CNN, LSTM, Pattern recogni- bounds, it will not be detected, even if a human would have tion, Technical Analysis classified it otherwise. Another solution is DTW3 which consists in computing 1 INTRODUCTION the distance between two time series. DTW allows us to Patterns are recurring sequences found in OHLC1 candle- recognize a pattern that could vary in size and length. To stick charts which traders have historically used as buy and use this algorithm, we must use reference time series, which sell signals. Several studies, notably by Bulkowski2, have have to be selected by a human. The references must gener- found some correlation between patterns and future trends, alize well when compared with signals similar to the pattern although to a limited extent. The correlations were found to in order to capture the whole range.
    [Show full text]
  • Finance Feature
    finance feature by Douglas Carlsen, DDS Face it: dentists are competitive and compulsive. We have to be to perform the miracles of our daily work. When I tell the average person that tooth “preparation” is performed with a drill running at 400,000rpm on a moving target within 1/16 inch or less of the nerve 90 percent of the time, I often hear, “No wonder you guys scare me to death!” With that compulsive drive comes the idea that we can invest smarter than the average Joe. Yet, according to noted author Larry Swedroe: “…the purchase by investors of individ- ual stocks… would seem to be the ultimate in controlling your own portfolio. However, in pursuing this course, you create two problems. First, you likely cannot achieve the extensive diversification that the use of mutual funds accomplishes. Second, the evidence tells us that individual investors who select their own stocks underperform appropriate benchmarks by significant margins.”1 Financial planners who utilize academic-based strategy agree that individuals cause little damage by actively trading a small portion of the portfolio (five to 10 percent) as long as the great bulk of one’s investments are in passive index funds. Nevertheless, many doctors choose to actively trade a significant portion of their funds. Since many of you will or already have taken the trading plunge, let’s examine the basics, then hear comments from a dentist who has done well since 2001 with active trading. Active traders normally use fundamental analysis or technical analysis, and often both. 1. Larry Swedroe, Investment Mistakes Even Smart Investors Make, McGraw Hill, 2012, p.24.
    [Show full text]
  • TACTICAL INDICATOR -CUP and HANDLE PATTERN by Daryl Guppy in Recent Weeks We Have Seen Many New Readers Come on Board and They H
    TACTICAL INDICATOR -CUP AND HANDLE PATTERN By Daryl Guppy In recent weeks we have seen many new readers come on board and they have generated a demand for background notes on the indicators we mention in the newsletter and the essential tools of technical analysis. These summaries are designed to explain how various indicators are applied to trading opportunities. The notes include tactics and rules for using and applying or constructing each indicator. The notes finish with a summary of the advantages and disadvantages of each indicator. These notes describe the way we use these indicators in our trading and are designed as a short reference guide. INDICATOR – CUP AND HANDLE PATTERN This is a short term pattern that develops over 2 to 4 weeks. It may be a downtrend breakout, or occur within an existing uptrend. The cup is usually symmetrical but it may be asymmetrical. Symmetrical saucer curves are defined using a single curve tool. Use the GTE saucer tool. Asymmetrical saucers are defined using a combination of parabolic curve segments. Use the GTE parabolic tool. APPLICATION The cup offers similar trading opportunities to that of the saucer pattern. The projection targets are based on a breakout from the lip of the cup. Generally the cup pattern is sharper and deeper than the saucer. The combination cup and handle pattern is a stronger pattern. This applies to the pattern of price behaviour following a failed breakout at the end of a cup pattern. Prices move to the right of the cup line, and then decline. This pullback may also appear within a few days after a successful breakout above the lip of the cup.
    [Show full text]
  • Forecasting Direction of Exchange Rate Fluctuations with Two Dimensional Patterns and Currency Strength
    FORECASTING DIRECTION OF EXCHANGE RATE FLUCTUATIONS WITH TWO DIMENSIONAL PATTERNS AND CURRENCY STRENGTH A THESIS SUBMITTED TO THE GRADUATE SCHOOL OF NATURAL AND APPLIED SCIENCES OF MIDDLE EAST TECHNICAL UNIVERSITY BY MUSTAFA ONUR ÖZORHAN IN PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR THE DEGREE OF DOCTOR OF PILOSOPHY IN COMPUTER ENGINEERING MAY 2017 Approval of the thesis: FORECASTING DIRECTION OF EXCHANGE RATE FLUCTUATIONS WITH TWO DIMENSIONAL PATTERNS AND CURRENCY STRENGTH submitted by MUSTAFA ONUR ÖZORHAN in partial fulfillment of the requirements for the degree of Doctor of Philosophy in Computer Engineering Department, Middle East Technical University by, Prof. Dr. Gülbin Dural Ünver _______________ Dean, Graduate School of Natural and Applied Sciences Prof. Dr. Adnan Yazıcı _______________ Head of Department, Computer Engineering Prof. Dr. İsmail Hakkı Toroslu _______________ Supervisor, Computer Engineering Department, METU Examining Committee Members: Prof. Dr. Tolga Can _______________ Computer Engineering Department, METU Prof. Dr. İsmail Hakkı Toroslu _______________ Computer Engineering Department, METU Assoc. Prof. Dr. Cem İyigün _______________ Industrial Engineering Department, METU Assoc. Prof. Dr. Tansel Özyer _______________ Computer Engineering Department, TOBB University of Economics and Technology Assist. Prof. Dr. Murat Özbayoğlu _______________ Computer Engineering Department, TOBB University of Economics and Technology Date: ___24.05.2017___ I hereby declare that all information in this document has been obtained and presented in accordance with academic rules and ethical conduct. I also declare that, as required by these rules and conduct, I have fully cited and referenced all material and results that are not original to this work. Name, Last name: MUSTAFA ONUR ÖZORHAN Signature: iv ABSTRACT FORECASTING DIRECTION OF EXCHANGE RATE FLUCTUATIONS WITH TWO DIMENSIONAL PATTERNS AND CURRENCY STRENGTH Özorhan, Mustafa Onur Ph.D., Department of Computer Engineering Supervisor: Prof.
    [Show full text]
  • Stock Market Explained
    Stock Market Explained A Beginner's Guide to Investing and Trading in the Modern Stock Market © Ardi Aaziznia www.PeakCapitalTrading.com Copyrighted Material © Peak Capital Trading CHAPTER 1 Copyrighted Material © Peak Capital Trading Figure 1.1: “covid-19” and “stock market” keyword Google search trends between April 2019 and April 2020. As you can see, there is a clear correlation. As the stock market drop hit the news cycles, people started searching more and more about the stock market in Google! Copyrighted Material © Peak Capital Trading COVID-19 Bear Market 2019 Bull Market 2020 recession due to pandemic v Figure 1.2: Comparison between the bull market of 2019 and the bear market of 2020, as shown by the change in share value of 500 of the largest American companies. These companies are tracked by the S&P 500 and are traded in an exchange-traded fund known as the SPDR S&P 500 ETF Trust (ticker: SPY). For your information, S&P refers to Standard & Poor’s, one of the indices which used to track this information. Copyrighted Material © Peak Capital Trading Figure 1.3: How this book is organized. Chapters 1-4 and 7-11 are written by me. Chapters 5 and 6 on day trading are written by Andrew Aziz. Copyrighted Material © Peak Capital Trading CHAPTER 2 Copyrighted Material © Peak Capital Trading Figure 2.1: The return on investing $100 in an exchange-traded fund known as the SPDR S&P 500 ETF Trust (ticker: SPY) (which tracks the share value of 500 of the largest American companies (as rated by the S&P 500)) vs.
    [Show full text]
  • Pattern Recognition User Guide.Book
    Chart Pattern Recognition Module User Guide CPRM User Guide April 2011 Edition PF-09-01-05 Support Worldwide Technical Support and Product Information www.nirvanasystems.com Nirvana Systems Corporate Headquarters 7000 N. MoPac, Suite 425, Austin, Texas 78731 USA Tel: 512 345 2545 Fax: 512 345 4225 Sales Information For product information or to place an order, please contact 800 880 0338 or 512 345 2566. You may also fax 512 345 4225 or send email to [email protected]. Technical Support Information For assistance in installing or using Nirvana products, please contact 512 345 2592. You may also fax 512 345 4225 or send email to [email protected]. To comment on the documentation, send email to [email protected]. © 2011 Nirvana Systems Inc. All rights reserved. Important Information Copyright Under the copyright laws, this publication may not be reproduced or transmitted in any form, electronic or mechanical, including photocopying, recording, storing in an information retrieval system, or translating, in whole or in part, without the prior written consent of Nirvana Systems, Inc. Trademarks OmniTrader™, VisualTrader™, Adaptive Reasoning Model™, ARM™, ARM Knowledge Base™, Easy Data™, The Trading Game™, Focus List™, The Power to Trade with Confidence™, The Path to Trading Success™, The Trader’s Advantage™, Pattern Tutor ™, and Chart Pattern Recognition Module™ are trademarks of Nirvana Systems, Inc. Product and company names mentioned herein are trademarks or trade names of their respective companies. DISCLAIMER REGARDING USE OF NIRVANA SYSTEMS PRODUCTS Trading stocks, mutual funds, futures, and options involves high risk including possible loss of principal and other losses. Neither the software nor any demonstration of its operation should be construed as a recommendation or an offer to buy or sell securities or security derivative products of any kind.
    [Show full text]
  • Active Portfolio Management
    Active Portfolio Management Charting • Technical analysts are sometimes called chartists because they study records or charts of past stock-prices and trading volume, hoping to find patterns they can exploit to make a profit. • We examine next several specific charting strategies. Christos A. Ioannou 2/27 The Dow Theory • The Dow Theory, named after its creator Charles Dow (who established The Wall Street Journal), is the grandfather of most technical analysis. • The aim of the Dow theory is to identify long-term trends in stock market prices. • The two indicators used are the Dow Jones Industrial Average (DJIA) and the Dow Jones Transportation Average (DJTA). The DJIA is the key indicator of underlying trends, while the DJTA usually serves as a check to confirm or reject that signal. Christos A. Ioannou 3/27 The Dow Theory (Cont.) The Dow theory posits three forces simultaneously affecting stock prices: 1 The primary trend is the long-term movement of prices, lasting from several months to several years. 2 Secondary or intermediate trends are caused by short-term deviations of prices from the underlying trend line. These deviations are eliminated via corrections when prices revert back to trend values. 3 Tertiary or minor trends are daily fluctuations of little importance. Christos A. Ioannou 4/27 bod10773_ch19.qxd 11/12/2002 11:37 AM Page 661 19 Behavioral Finance and Technical Analysis 661 The Dow Theory The Dow theory, named after its creator Charles Dow (who established The Wall Street Jour- Dow theory nal), is the grandfather of most technical analysis. While most technicians today would view A technique that the theory as dated, the approach of many more statistically sophisticated methods are essen- attempts to discern tially variants of Dow’s approach.
    [Show full text]
  • Japanese Candlestick Patterns
    Presents Japanese Candlestick Patterns www.ForexMasterMethod.com www.ForexMasterMethod.com RISK DISCLOSURE STATEMENT / DISCLAIMER AGREEMENT Trading any financial market involves risk. This course and all and any of its contents are neither a solicitation nor an offer to Buy/Sell any financial market. The contents of this course are for general information and educational purposes only (contents shall also mean the website http://www.forexmastermethod.com or any website the content is hosted on, and any email correspondence or newsletters or postings related to such website). Every effort has been made to accurately represent this product and its potential. There is no guarantee that you will earn any money using the techniques, ideas and software in these materials. Examples in these materials are not to be interpreted as a promise or guarantee of earnings. Earning potential is entirely dependent on the person using our product, ideas and techniques. We do not purport this to be a “get rich scheme.” Although every attempt has been made to assure accuracy, we do not give any express or implied warranty as to its accuracy. We do not accept any liability for error or omission. Examples are provided for illustrative purposes only and should not be construed as investment advice or strategy. No representation is being made that any account or trader will or is likely to achieve profits or losses similar to those discussed in this report. Past performance is not indicative of future results. By purchasing the content, subscribing to our mailing list or using the website or contents of the website or materials provided herewith, you will be deemed to have accepted these terms and conditions in full as appear also on our site, as do our full earnings disclaimer and privacy policy and CFTC disclaimer and rule 4.41 to be read herewith.
    [Show full text]
  • Want to Make Hot Money? Check out These 10 'Cup and Handle' Stocks
    Rahul Oberoi | July 26, 2017 Want to make hot money? Check out these 10 ‘Cup and Handle’ stocks A cup without a handle is difficult to handle. Same is the case with stock markets. Technical charts show that a stock with 'Cup and Handle' pattern is easy to identify. As the name suggests, there are two parts of this pattern - one is U-shape cup and another one is small handle. A cup usually forms after an advance move, it looks like a 'Rounding Bottom'. After the high formed on a right-hand side (i.e. Cup), there is a pullback which ideally forms a 'Handle' that shows a final pullback before the big breakout. The said pullback should usually retrace around one-third of a cup. Monil Shah, Senior Technical Analyst, Way2Wealth Brokers said, "The lesser it retraced, the more bullish the formation is. After this formation, one can draw a trend line from the left side of the cup, connecting the right handle. We should see substantial increase in volume activity during the breakout above the handle's resistance. The projected target after the breakout can be estimated by measuring the depth of the cup. The distance from the right side of the cup to the bottom of the cup will be added to the handle resistance.” Volumes also play an important role in validating the price pattern. Pankaj Pandey, Head-Research, ICICI Direct said, "Volumes are typically light at the base of cup formation and generally increase as the stock moves back toward its old high. As the stock breaks out above resistance marked by the handle, volume typically increases.
    [Show full text]