Introduction, Trends - Technical Analysis from A to Z MetaStock Family Products Customer Corner Partners TA Training Online Charting TAAZ Book DownLoader Hot Stocks Contents Preface Technical Analysis from A to Z Acknowledgments Terminology By Steven B. Achelis To Learn More Introduction ● Technical Analysis ● Price fields ● Charts ● Support & resistance INTRODUCTION - Trends ● Trends ● Moving averages Trends ● Indicators ● Market indicators In the preceding section, we saw how support and resistance levels can be ● Line studies penetrated by a change in investor expectations (which results in shifts of the supply/demand lines). This type of a change is often abrupt and "news based." ● Periodicity ● The time element In this section, we'll review "trends." A trend represents a consistent change in prices (i.e., a change in investor expectations). Trends differ from ● Conclusion support/resistance levels in that trends represent change, whereas ● Order the Book support/resistance levels represent barriers to change. ● Learn more about Technical Analysis As shown in Figure 19, a rising trend is defined by successively higher low-prices. A rising trend can be thought of as a rising support level--the bulls are in control and are pushing prices higher. Reference Absolute Breadth Index Accumulation/Distribution Figure 19 Accumulation Swing Index Advance/Decline Line Advance/Decline Ratio Advancing-Declining Issues Advancing, Declining, Unchanged Volume Andrews' Pitchfork Arms Index Average True Range Bollinger Bands Breadth Thrust Bull/Bear Ratio Candlesticks, Japanese CANSLIM Chaikin Oscillator Commodity Channel Index Commodity Selection Index Correlation Analysis Cumulative Volume Index Cycles Demand Index Detrended Price Oscillator Directional Movement Dow Theory Ease of Movement Figure 20 shows a falling trend. A falling trend is defined by successively lower Efficient Market Theory high-prices. A falling trend can be thought of as a falling resistance level--the Elliott Wave Theory bears are in control and are pushing prices lower. Envelopes (trading bands) Equivolume Fibonacci Studies Figure 20 Four Percent Model Fourier Transform Fundamental Analysis Gann Angles Herrick Payoff Index Interest Rates Kagi Large Block Ratio Linear Regression Lines MACD Mass Index McClellan Oscillator McClellan Summation Index Median Price Member Short Ratio Momentum Money Flow Index Moving Averages Negative Volume Index New Highs-Lows Cumulative New Highs-New Lows New Highs/Lows Ratio Odd Lot Balance Index Odd Lot Purchases/Sales Just as prices penetrate support and resistance levels when expectations Odd Lot Short Ratio change, prices can penetrate rising and falling trendlines. Figure 21 shows the On Balance Volume penetration of Merck's falling trendline as investors no longer expected lower Open Interest prices. Open-10 TRIN Option Analysis Note in Figure 21 how volume increased when the trendline was penetrated. This Overbought/Oversold is an important confirmation that the previous trend is no longer intact. Parabolic SAR Patterns Percent Retracement Figure 21 Performance Point & Figure Positive Volume Index Price and Volume Trend Price Oscillator Price Rate-of-Change Public Short Ratio Puts/Calls Ratio Quadrant Lines Relative Strength, Comparative Relative Strength Index Renko Speed Resistance Lines Spreads Standard Deviation STIX Stochastic Oscillator Swing Index Three Line Break Time Series Forecast Tirone Levels Total Short Ratio Trade Volume Index Trendlines As with support and resistance levels, it is common to have traders' remorse TRIX following the penetration of a trendline. This is illustrated in Figure 22. Typical Price Ultimate Oscillator Upside/Downside Ratio Figure 22 Upside-Downside Volume Vertical Horizontal Filter Volatility, Chaikin's Volume Volume Oscillator Volume Rate-of-Change Weighted Close Williams' Accumulation/Distribution Williams' %R Zig Zag Bibliography About the Author Again, volume is the key to determining the significance of the penetration of a trend. In the above example, volume increased when the trend was penetrated, and was weak as the bulls tried to move prices back above the trendline. Home | MetaStock | Products | Customer Corner | Partners | Free Stuff | Legalities | Site Map | Contact Top of Page Copyright 2000 Equis International. http://www.equis.com/free/taaz/inttrends.html [5/11/2001 3:11:12 am] Technical Analysis from A to Z MetaStock Family Products Customer Corner Partners TA Training Online Charting TAAZ Book DownLoader Hot Stocks Contents Preface Technical Analysis from A to Z Acknowledgments Terminology By Steven B. Achelis To Learn More Introduction ● Technical Analysis ● Price fields ● Charts ● Support & resistance PREFACE ● Trends ● Moving averages ● Indicators ● Over the last decade I have met many of the top technical analysis "gurus" as Market indicators well as shared experiences with thousands of newcomers. The common element ● Line studies I've discovered among investors who use technical analysis, regardless of their ● Periodicity expertise, is the desire to learn more. ● The time element No single book, nor any collection of books, can provide a complete explanation ● Conclusion of technical analysis. Not only is the field too massive, covering every thing from ● Order the Book Federal Reserve reports to Fibonacci Arcs, but it is also evolving so quickly that anything written today becomes incomplete (but not obsolete) tomorrow. ● Learn more about Technical Analysis Armed with the above knowledge and well aware of the myriad of technical analysis books that are already available, I feel there is a genuine need for a Reference concise book on technical analysis that serves the needs of both the novice and Absolute Breadth Index veteran investor. That is what I have strived to create. Accumulation/Distribution Accumulation Swing Index The first half of this book is for the newcomer. It is an introduction to technical Advance/Decline Line analysis that presents basic concepts and terminology. The second half is a Advance/Decline Ratio reference that is designed for anyone using technical analysis. It contains concise Advancing-Declining Issues explanations of numerous technical analysis tools in a reference format. Advancing, Declining, Unchanged Volume When my father began using technical analysis thirty years ago, many people Andrews' Pitchfork considered technical analysis just another 1960's adventure into the occult. Arms Index Today, technical analysis is accepted as a viable analytical approach by most Average True Range universities and brokerage firms. Rarely are large investments made without Bollinger Bands reviewing the technical climate. Yet even with its acceptance, the number of Breadth Thrust people who actually perform technical analysis remains relatively small. It is my Bull/Bear Ratio hope that this book will increase the awareness and use of technical analysis, Candlesticks, Japanese CANSLIM and in turn, improve the results of those who practice it. Chaikin Oscillator Commodity Channel Index "Information is pretty thin stuff, unless mixed with experience." Commodity Selection Index ---Clarence Day, 1920 Correlation Analysis Cumulative Volume Index Cycles Demand Index Detrended Price Oscillator Directional Movement Dow Theory Ease of Movement Efficient Market Theory Elliott Wave Theory Envelopes (trading bands) Equivolume Fibonacci Studies Four Percent Model Fourier Transform Fundamental Analysis Gann Angles Herrick Payoff Index Interest Rates Kagi Large Block Ratio Linear Regression Lines MACD Mass Index McClellan Oscillator McClellan Summation Index Median Price Member Short Ratio Momentum Money Flow Index Moving Averages Negative Volume Index New Highs-Lows Cumulative New Highs-New Lows New Highs/Lows Ratio Odd Lot Balance Index Odd Lot Purchases/Sales Odd Lot Short Ratio On Balance Volume Open Interest Open-10 TRIN Option Analysis Overbought/Oversold Parabolic SAR Patterns Percent Retracement Performance Point & Figure Positive Volume Index Price and Volume Trend Price Oscillator Price Rate-of-Change Public Short Ratio Puts/Calls Ratio Quadrant Lines Relative Strength, Comparative Relative Strength Index Renko Speed Resistance Lines Spreads Standard Deviation STIX Stochastic Oscillator Swing Index Three Line Break Time Series Forecast Tirone Levels Total Short Ratio Trade Volume Index Trendlines TRIX Typical Price Ultimate Oscillator Upside/Downside Ratio Upside-Downside Volume Vertical Horizontal Filter Volatility, Chaikin's Volume Volume Oscillator Volume Rate-of-Change Weighted Close Williams' Accumulation/Distribution Williams' %R Zig Zag Bibliography About the Author Home | MetaStock | Products | Customer Corner | Partners | Free Stuff | Legalities | Site Map | Contact Top of Page Copyright 2000 Equis International. http://www.equis.com/free/taaz/preface.html [5/11/2001 3:11:22 am] Acknowledgements - Technical Analysis from A to Z MetaStock Family Products Customer Corner Partners TA Training Online Charting TAAZ Book DownLoader Hot Stocks Contents Preface Technical Analysis from A to Z Acknowledgments Terminology By Steven B. Achelis To Learn More Introduction ● Technical Analysis ● Price fields ● Charts ● Support & resistance ACKNOWLEDGMENTS ● Trends ● Moving averages ● Indicators ● The truth that no man is an island certainly holds true here. This book would not Market indicators be possible without the help of thousands of analysts who have studied the ● Line studies markets and shared their results. To those from whom I have compiled this