{"title":"Volume 9 (1991)","description":"\u003cp\u003eBrowse Volume articles by issue:\u003c\/p\u003e\u003cdiv style=\"display:flex;flex-wrap:wrap;gap:12px;\"\u003e\n\u003ca href=\"\/collections\/articles-volume-9\/issue-01?sort_by=title-ascending#ProductGridContainer\" style=\"margin-right:16px;\"\u003eChapter 1 January\u003c\/a\u003e\u003ca href=\"\/collections\/articles-volume-9\/issue-02?sort_by=title-ascending#ProductGridContainer\" style=\"margin-right:16px;\"\u003eChapter 2 February\u003c\/a\u003e\u003ca href=\"\/collections\/articles-volume-9\/issue-03?sort_by=title-ascending#ProductGridContainer\" style=\"margin-right:16px;\"\u003eChapter 3 March\u003c\/a\u003e\u003ca href=\"\/collections\/articles-volume-9\/issue-04?sort_by=title-ascending#ProductGridContainer\" style=\"margin-right:16px;\"\u003eChapter 4 April\u003c\/a\u003e\u003ca href=\"\/collections\/articles-volume-9\/issue-05?sort_by=title-ascending#ProductGridContainer\" style=\"margin-right:16px;\"\u003eChapter 5 May\u003c\/a\u003e\u003ca href=\"\/collections\/articles-volume-9\/issue-06?sort_by=title-ascending#ProductGridContainer\" style=\"margin-right:16px;\"\u003eChapter 6 June\u003c\/a\u003e\u003ca href=\"\/collections\/articles-volume-9\/issue-07?sort_by=title-ascending#ProductGridContainer\" style=\"margin-right:16px;\"\u003eChapter 7 July\u003c\/a\u003e\u003ca href=\"\/collections\/articles-volume-9\/issue-08?sort_by=title-ascending#ProductGridContainer\" style=\"margin-right:16px;\"\u003eChapter 8 August\u003c\/a\u003e\u003ca href=\"\/collections\/articles-volume-9\/issue-09?sort_by=title-ascending#ProductGridContainer\" style=\"margin-right:16px;\"\u003eChapter 9 September\u003c\/a\u003e\u003ca href=\"\/collections\/articles-volume-9\/issue-10?sort_by=title-ascending#ProductGridContainer\" style=\"margin-right:16px;\"\u003eChapter 10 October\u003c\/a\u003e\u003ca href=\"\/collections\/articles-volume-9\/issue-11?sort_by=title-ascending#ProductGridContainer\" style=\"margin-right:16px;\"\u003eChapter 11 November\u003c\/a\u003e\u003ca href=\"\/collections\/articles-volume-9\/issue-12?sort_by=title-ascending#ProductGridContainer\" style=\"margin-right:16px;\"\u003eChapter 12 December\u003c\/a\u003e\u003ca href=\"\/collections\/articles-volume-9\/issue-13?sort_by=title-ascending#ProductGridContainer\" style=\"margin-right:16px;\"\u003eChapter 13 Quick Scans\u003c\/a\u003e\u003ca href=\"\/collections\/articles-volume-9\/issue-14?sort_by=title-ascending#ProductGridContainer\" style=\"margin-right:16px;\"\u003eChapter 14 Product Reviews\u003c\/a\u003e\n\u003c\/div\u003e","products":[{"product_id":"v09-c01-sideb-pdf","title":"V.9:1 (39-42): SIDEBAR: THE WYCKOFF WAVE","description":"THE WYCKOFF WAVE\u003cbr\u003e\u003cbr\u003eTo determine the current trend, the present position and probable future trend of the market, a means of\ncharting the market's action to reveal the general direction of the trend is necessary. ...","brand":"store-traders-com","offers":[{"title":"Default Title","offer_id":52133794054513,"sku":"\\V09\\C01\\SIDEB.PDF","price":2.95,"currency_code":"USD","in_stock":true}],"thumbnail_url":"\/\/cdn.shopify.com\/s\/files\/1\/0900\/3843\/6209\/files\/unnamed_f3e1430b-f762-4bf9-9230-d13b286dfb4a.jpg?v=1739652675"},{"product_id":"v09-c06-deutsch-pdf","title":"V.9:6 (255-256): Trading The Deutschemark's Gaps by John Sweeney","description":"Trading The Deutschemark's Gaps\nby John Sweeney\u003cbr\u003e\u003cbr\u003eTalk about humiliation! Looking at a Deutschemark chart, I figured I'd trade with the direction of any\ngap for short small gains. The evidence showed I was 180 degrees wrong! I asked my computer to look at\nfour years of mark prices and trade long if the opening price were above the previous day's range and\nshort if it were below it. Ignoring my usual practice, I asked only what the best and worst move for each\nintraday trade would be.\u003cbr\u003e\u003cbr\u003eAs you can see from Figure 1, there is very little difference between favorable (MFE) and unfavorable\n(MAE) price movement when trading this way. In fact, even if you ask about the price movement after\nentry for one, two or even 12 days out, there is very little difference. I've never seen such an even\ndistribution, except for that 10th day's probably anomalous adverse excursion.\u003cbr\u003e\u003cbr\u003eOut of pure stubbornness, I asked the computer to do the same tallies when the gap was at least 10 points,\nthen 20 and so on up to 50 points. Slowly, something emerged.\u003cbr\u003e\u003cbr\u003eThe favorable excursion, as seen in Figure 2, never changed perceptibly from that seen when trading with\njust a one-point gap even as the minimum gap got bigger and bigger. The maximum favorable excursion\n(MFE) of at least 0.5 (50 trading points) is virtually identical to that when the size of the gap is just one\npoint.","brand":"store-traders-com","offers":[{"title":"Default Title","offer_id":52133794087281,"sku":"\\V09\\C06\\DEUTSCH.PDF","price":2.95,"currency_code":"USD","in_stock":true}],"thumbnail_url":"\/\/cdn.shopify.com\/s\/files\/1\/0900\/3843\/6209\/files\/unnamed_f4528389-d4c8-48c9-af07-667f2683439c.jpg?v=1739652678"},{"product_id":"v09-c08-sidebr-pdf","title":"V.9:8 (303-309): SIDEBAR: RULE PROCESS GENERATION by Technical Analysis, Inc.","description":"RULE PROCESS GENERATION by Technical Analysis, Inc.\u003cbr\u003e\u003cbr\u003eTo illustrate how this process of rule generation works, suppose that the exponential moving average,\ntaken together with the computed direction of the market and today's Standard \u0026amp; Poor's, represents a\npotent combination to produce a decision to buy or to sell under trending market conditions (the decision\nof which will depend, of course, on the absolute numerical values of those indicators today and yesterday,\nand their relative values compared with each other). Two rules, then (actually used in our system), may\nsemi-automatically be induced.","brand":"store-traders-com","offers":[{"title":"Default Title","offer_id":52133795332465,"sku":"\\V09\\C08\\SIDEBR.PDF","price":2.95,"currency_code":"USD","in_stock":true}],"thumbnail_url":"\/\/cdn.shopify.com\/s\/files\/1\/0900\/3843\/6209\/files\/unnamed_5319ddfc-01aa-407c-a8a5-374a42d66464.jpg?v=1739652713"},{"product_id":"v09-c06-howimpo-pdf","title":"V.9:6 (233-234): How Important Is A Turning Point? by Arthur A. Merrill, C.M.T.","description":"How Important Is A Turning Point?\nby Arthur A. Merrill, C.M.T.\u003cbr\u003e\u003cbr\u003eSo, naturalists observe a flea\u003cbr\u003e\u003cbr\u003eHath smaller fleas that on him prey\u003cbr\u003e\u003cbr\u003eAnd these have smaller still to bite 'em;\u003cbr\u003e\u003cbr\u003eAnd so proceed ad infinitum.\u003cbr\u003e\u003cbr\u003eJonathan Swift\u003cbr\u003e\u003cbr\u003eSo goes the market. Waves within waves within waves. Sometimes it's difficult to see the forest; we\nsee only the trees. The Dow theory is concerned with penetration of turning point levels. When does a\nturning point become important enough to set an important level?\u003cbr\u003e\u003cbr\u003eThe Elliott wave theory is concerned with waves of various magnitudes. When does a turning point\nbecome important enough to qualify for the next class of waves?\u003cbr\u003e\u003cbr\u003eThese questions can be addressed with the help of magnitude filters, a technique of filtering out market\nswings smaller than a specified magnitude.\u003cbr\u003e\u003cbr\u003ePoint and figure charts do this. On a one-point chart, all swings of less than one point are ignored, or\nfiltered out. On a three-point chart, all swings of less than three points are filtered out or ignored. The\nturning point on a three-point chart is more important than the turning point on a one-point chart.\u003cbr\u003e\u003cbr\u003eIn stock prices, however, points such as on a point and figure chart are a very poor measure. One point on\na $10 stock means a lot more than one point on a $100 stock. If we are going to measure importance, we\nhave to work with percentage changes, not point changes. Percentage is a much more reliable yardstick.","brand":"store-traders-com","offers":[{"title":"Default Title","offer_id":52133796839793,"sku":"\\V09\\C06\\HOWIMPO.PDF","price":2.95,"currency_code":"USD","in_stock":true}],"thumbnail_url":"\/\/cdn.shopify.com\/s\/files\/1\/0900\/3843\/6209\/files\/unnamed_9395effa-6633-410a-a05f-d81c5f4bdd95.jpg?v=1739652743"},{"product_id":"v09-c01-support-pdf","title":"V.9:1 (17-19): Support And Resistance Levels by John J. Kosar","description":"Support And Resistance Levels\nby John J. Kosar\u003cbr\u003e\u003cbr\u003eWith the advent of personal computers and charting software, support and resistance levels and their\nvalue as a technical tool have been overshadowed by sophisticated indicators. Nonetheless, support and\nresistance levels are one of the most basic and essential components of technical analysis.\u003cbr\u003e\u003cbr\u003eSupport and resistance are price areas where an abundance of trading has taken place and where\nconsiderable buying or selling pressure exists. Underlying support (that is, buying pressure) keeps a\nmarket in an uptrend, and overhead resistance (selling pressure) keeps a market trending lower. Once a\ntrader can accurately determine where these areas are, they can be used very effectively to manage risk.\nBy entering trades at price levels at which a significant move is likely, the probability of reward over risk\nis improved.\u003cbr\u003e\u003cbr\u003eThere are support and resistance levels that are applicable to every trader's time frame. Observing how\nthe market reacts when encountering these levels is a very good barometer to measure the strength of the\nunderlying trend. Traders with a very short time frame, including floor traders, arbitrageurs and\nindividual day traders, often rely heavily on intraday support and resistance levels to enter and exit the\nmarket. Position traders use longer-term support and resistance to either initiate or add to their positions,\nas well as for placement of protective stop-loss orders. Large quantities of stop-loss orders will usually\naccumulate at key support and resistance areas and will often contribute to a dramatic surge in the market\nin the direction of the breakout once these areas have been penetrated.","brand":"store-traders-com","offers":[{"title":"Default Title","offer_id":52133797888369,"sku":"\\V09\\C01\\SUPPORT.PDF","price":3.95,"currency_code":"USD","in_stock":true}],"thumbnail_url":"\/\/cdn.shopify.com\/s\/files\/1\/0900\/3843\/6209\/files\/unnamed_1ecaa87d-17d1-45e2-b670-646f17a9bb74.jpg?v=1739652777"},{"product_id":"v09-c10-sidebex-pdf","title":"V.9:10 (391-395): SIDEBAR: EXPONENTIAL MOVING AVERAGES","description":"EXPONENTIAL MOVING AVERAGES\u003cbr\u003e\u003cbr\u003eDefining exponentially smoothed moving averages which, for most traders, would be a series of\nclosing prices is simply another form of a moving average. An exponentially smoothed moving\naverage utilizes a smoothing constant (a) that approximates the number of days for a simple moving\naverage. This constant is multiplied times the difference between today's closing price and yesterday's\nmoving average value. This new value is then added to yesterday's moving average value (Figure 1):","brand":"store-traders-com","offers":[{"title":"Default Title","offer_id":52133798117745,"sku":"\\V09\\C10\\SIDEBEX.PDF","price":2.95,"currency_code":"USD","in_stock":true}],"thumbnail_url":"\/\/cdn.shopify.com\/s\/files\/1\/0900\/3843\/6209\/files\/unnamed_8d864862-6fc7-49c4-9ce7-ce27f3585aff.jpg?v=1739652779"},{"product_id":"v09-c11-sidebrsi-pdf","title":"V.9:11 (438-446): SIDEBAR: CALCULATING RSI","description":"CALCULATING RSI\u003cbr\u003e\u003cbr\u003eCalculate RSI by summing the up closes during the first 14 days and dividing by 14. This is the up\naverage (Column E). Then sum the down closes during the first 14 days and divide by 14. This is the\ndown average (Column F). All values are absolute values (positive integers). Then divide the up average\nby the down average to determine the RS value (Column G). Add 1 to the RS value (Column H). This\nresult is divided into 100 (Column I). The quotient is then subtracted from 100 to produce the RSI value\n(Column J).","brand":"store-traders-com","offers":[{"title":"Default Title","offer_id":52133800739185,"sku":"\\V09\\C11\\SIDEBRSI.PDF","price":2.95,"currency_code":"USD","in_stock":true}],"thumbnail_url":"\/\/cdn.shopify.com\/s\/files\/1\/0900\/3843\/6209\/files\/unnamed_9949b205-ec6e-4ae2-a78f-3bfd76b37949.jpg?v=1739652806"},{"product_id":"v09-c02-ralphbl-pdf","title":"V.9:2 (72-75): Ralph Bloch: 34-Year Trading Veteran by Thom Hartle","description":"Ralph Bloch: 34-Year Trading Veteran by Thom Hartle\u003cbr\u003e\u003cbr\u003eRalph Bloch, senior vice president and chief market analyst for Raymond James, has been active as a\ntechnical analyst on Wall Street since 1956 and has been writing weekly technical commentary for\nMansfield Chart Service for the past six years. STOCK \u0026amp; COMMODITIES Editor Thom Hartle interviewed\nhim via telephone on November 20,1990, to get his views on the markets, technical analysis and Wall\nStreet of the past 35 years.\u003cbr\u003e\u003cbr\u003eI have a very limited and narrow view and somehow I've survived (trading) 34 years. Ralph Bloch\u003cbr\u003e\u003cbr\u003eI'd like to start off with some of your personal history, your background. You've been in the business\n35 years...\u003cbr\u003e\u003cbr\u003eApril will be 35 years. I went through started to break out very strongly on the in the olden days. Merrill\nLynch used to have a junior exec training program, of which I somehow slipped through the cracks, and\nthey accepted me. At that time there were probably only two or three guys on the Street practicing\nwitchcraft, which is how technical analysis used to be viewed. There was Tony Tabell's father, Ed Tabell,\nwho was at Walston, and then there was John Shultz, who is still around and who used to write for\nForbes. So technical analysis, when I got started, was really viewed as looney tunes. I got involved with\nit when I first realized and learned probably the most basic rule in stock market knowledge: that the\nmarket is here, and that the stock market's primary rule in life is to anticipate and discount the future. I\nwent through the program at Merrill Lynch from 1956-58; a recession started in 1957. The market peaked\nin August of '57 and then fell some 20% into October of '57. That proved to be the low point.\u003cbr\u003e\u003cbr\u003eFrom then on, the market went through the inevitable backing and filling in a relatively narrow range into\nearly spring of '58 as I recall, the go-go stocks the glamor stocks, as we used to refer to them the\nTexas Instruments, items like that started to break out very strongly on the upside, and by March or\nApril, the rest of the market started to follow suit. May of '58, as it turned out, was the low point of the\nrecession.","brand":"store-traders-com","offers":[{"title":"Default Title","offer_id":52133802213745,"sku":"\\V09\\C02\\RALPHBL.PDF","price":3.95,"currency_code":"USD","in_stock":true}],"thumbnail_url":"\/\/cdn.shopify.com\/s\/files\/1\/0900\/3843\/6209\/files\/unnamed_864534ac-280e-4bea-a966-2a787c6ef25e.jpg?v=1739652845"},{"product_id":"v09-c04-nurock-pdf","title":"V.9:4 (142-144): All By His Elf: Robert Nurock by Thom Hartle","description":"All By His Elf: Robert Nurock by Thom Hartle\u003cbr\u003e\u003cbr\u003eThe most money is made in the market by those who are able to identify trends early and stick with them\n not trade out of issues just because they've gone theoretically too far, too fast.\" Robert Nurock\u003cbr\u003e\u003cbr\u003eRobert Nurock is perhaps best known for his 19-year sojourn on the Wall Street Week TV program. He\ndecided, in October last year, to resign as panelist and \"Chief Elf \" on the respected financial show to\nconcentrate on his own research. Nurock spoke with STOCKS \u0026amp; COMMODITIES Editor Thom Hartle via\ntelephone on Tuesday, February 5, 1991.\u003cbr\u003e\u003cbr\u003eTo start off with the basics for our readers, let's talk about technical indicators, because that's\nprobably what you're best known for. What would you say are some of the things that indicators can\ndo for you in terms of your investment analysis?\u003cbr\u003e\u003cbr\u003eI think the most important thing that an investor or an analyst should look at when he or she analyzes\ntechnical indicators would be to try to find some sort of objective measurement of the factors that\ninfluence or measure supply and demand for the stock market. The indicators that are traditionally\nadopted by a market analyst look at investor sentiment or psychology in an effort to determine whether\ninvestors are overly bullish or overly bearish. Market analysts look at the market's momentum or rate of\nchange to see if the market has moved too far in one direction, not unlike a pendulum that would then\nswing back in the opposite direction.\u003cbr\u003e\u003cbr\u003eWhat about speculative confidence?\u003cbr\u003e\u003cbr\u003eWe would also look at indicators that reflect speculative confidence, or the willingness of investors to\ntake on risk. Essentially, when you're at the top of a market cycle, investors are no longer concerned with\nrisk; they're willing to take any bet whatsoever. On the other hand, when you're at the bottom of a market\ncycle, investors are only concerned with risk, they're not concerned with reward, they just want out of the\nmarket. So we look at measures that would signal the willingness of investors to take risk.","brand":"store-traders-com","offers":[{"title":"Default Title","offer_id":52133802246513,"sku":"\\V09\\C04\\NUROCK.PDF","price":3.95,"currency_code":"USD","in_stock":true}],"thumbnail_url":"\/\/cdn.shopify.com\/s\/files\/1\/0900\/3843\/6209\/files\/unnamed_4a16d1e1-53af-42d4-aab3-e6975bc925e5.jpg?v=1739652847"},{"product_id":"v09-c04-usingne-pdf","title":"V.9:4 (135-138): Using Neural Nets In Market Analysis by Mark B. Fishman, Dean S. Barr and Walter J. Loick","description":"Can neural networks aid traders? By Mark B. Fishman, Dean S. Barr and Walter J. Loick\u003cbr\u003e\u003cbr\u003eNeural networks are the newest form of artificial intelligence technology to make its way into market\nanalysis. Neural networks, also referred to as neural nets, mimic the human brain's most powerful ability,\nthat of pattern recognition. The neural net can make a decision or a prediction by drawing on an inventory\nof patterns previously learned, seeking the one most relevant to the current situation. What distinguishes\nneural nets, moreover, from \"classical\" AI paradigms such as that of rule-based systems is that, in a real\nsense, t they \"learn\" by example and modify themselves, rather than having to be programmed with\nspecific preconceived rules.\u003cbr\u003e\u003cbr\u003eNeural nets use layers of real or \"simulated\" electronic neurons with various numeric weights\n(dynamically modifiable in the \"training\" phase) representing the connection strengths between them to\n\"learn\" a predictive ability. A neural net, once trained, can be described as a matrix of neurons and\nconnection strengths that represent the \"solution\" to a problem. Commercially available neural net shells,\nas well as those still being researched, use a variety of algorithms to adjust the connection strengths\nbetween the neurons until convergence is achieved and the system is able to make correct predictions\nwith some, usually high, percentage of accuracy. Once the network successfully sets the weights of the\nconnections to produce the correct output, then the trained net is ready to use as a predictive or diagnostic\ntool.\u003cbr\u003e\u003cbr\u003eTHE FUTURE IS FANCIFUL\u003cbr\u003e\u003cbr\u003eWhile this technology may seem fancifully futuristic, some very good and effective neural network\nsoftware programs are in fact already available to the public at a reasonable cost. We use Brainmaker,\ncreated by California Scientific Software. A neural net software package such as Brainmaker should be\nthought of as a \"shell\" program, similar to an expert system shell, the effectiveness of which is largely\ndependent on the choice of algorithms by which it \"learns.\" What makes this software package a\npowerful tool for learning relationships is the proprietary back-propagation algorithm used by its\ndesigners.","brand":"store-traders-com","offers":[{"title":"Default Title","offer_id":52133803131249,"sku":"\\V09\\C04\\USINGNE.PDF","price":3.95,"currency_code":"USD","in_stock":true}],"thumbnail_url":"\/\/cdn.shopify.com\/s\/files\/1\/0900\/3843\/6209\/files\/unnamed_b3252459-4983-400d-a818-569840d5a974.jpg?v=1739652869"},{"product_id":"v09-c01-currenc-pdf","title":"V.9:1 (29-32): Currency Investment With Tactical Trading by John Beatty","description":"Currency Investment With Tactical Trading\nby John Beatty\u003cbr\u003e\u003cbr\u003eForeign currency deposit accounts for German Deutschemarks, British pounds and so forthare not\nroutinely available in the cities and towns of the United States. In fact, before January 1989, federal law\nprohibited such accounts. As a consequence, many believe that currency investments comprise only the\ntrading of futures and options. And unfortunately, for many investors, futures and options are definitely\ntoo risky.\u003cbr\u003e\u003cbr\u003eShould you want to move your funds across foreign currency deposit accounts in a bank, however, you do\nhave interesting investment alternatives. Currency exchange rates have numerical volatility for long-term\nand short-term trades just the way that stocks do. You can also engage in arbitrage, simultaneously\nbuying one currency while selling another. For two currencies, relative changes occur between the\nexchange rates and also between the interest rates paid on deposit accounts. Banks also offer, not futures,\nbut forward currency contracts. They also offer interbank currency options. And some banks will even\nlend up to eight times the holding.\u003cbr\u003e\u003cbr\u003eFigure 1, an output from the alpha-beta trend program detailed in an article by Anthony W. Warren,\ndepicts the moving exchange rate of the German mark, showing that particular currency's volatility and\npotential for trades.","brand":"store-traders-com","offers":[{"title":"Default Title","offer_id":52133804310897,"sku":"\\V09\\C01\\CURRENC.PDF","price":3.95,"currency_code":"USD","in_stock":true}],"thumbnail_url":"\/\/cdn.shopify.com\/s\/files\/1\/0900\/3843\/6209\/files\/unnamed_06909433-bfd8-4bd9-884b-c33e7eda6c47.jpg?v=1739652900"},{"product_id":"v09-c07-predict-pdf","title":"V.9:7 (276-278): Predicting The Market With Unreliable Sources by Van K. Tharp, Ph.D.","description":"Predicting The Market With Unreliable Sources\nby Van K. Tharp, Ph.D.\u003cbr\u003e\u003cbr\u003eJoe trades Standard \u0026amp; Poor's 500 contracts, and at the moment he is in a quandary. He looks at a chart\nof the market and wonders what he should do. The market looks as though it's in an uptrend. But perhaps\nit's gone as high as it's going to go, and it might be topping out. On the other hand, the pattern looks\nbullish. What will the market do? If it moves, will it be a strong enough move for Joe to make a major\nprofit?\u003cbr\u003e\u003cbr\u003eThe difference between luck and skill can be difficult to distinguish when it comes to market predictions,\nor, for that matter, any kind of prediction. Prediction is often based on one's theoretical understanding of\nthe relationship between world events and the role of \"luck.\" (Luck, in my opinion, is simply a word that\nexplains chance occurrences. I prefer to think of it as an acronym for Laboring Under Constant\nKnowledge.) Many economists believe that the market is random. Yet if we had access to the number of\nbuyers and sellers in the market at one given instant and information about the conviction and capital\nbehind their trades, we would probably find the market to be very predictable.","brand":"store-traders-com","offers":[{"title":"Default Title","offer_id":52133804376433,"sku":"\\V09\\C07\\PREDICT.PDF","price":2.95,"currency_code":"USD","in_stock":true}],"thumbnail_url":"\/\/cdn.shopify.com\/s\/files\/1\/0900\/3843\/6209\/files\/unnamed_9096b93a-80be-441c-9daa-458818831169.jpg?v=1739652903"},{"product_id":"v09-c08-pricedi-pdf","title":"V.9:8 (323-324): Price\/Dividends Ratio Revisited by Arthur A. Merrill, C.M.T.","description":"Price\/Dividends Ratio Revisited by Arthur A. Merrill, C.M.T.\u003cbr\u003e\u003cbr\u003eIn 1988 Merrill showed that the price\/dividends ratio was useful in calling the 1987 crash. What's the outlook today?\u003cbr\u003e\u003cbr\u003eIn the October 1988 issue of STOCKS \u0026amp; COMMODITIES, I described the usefulness of the ratio of price to\ndividends in calling the 1987 crash. It shouted warnings. What is the situation today? To review, Figure 1\nis the long-term chart of the ratio, after filtering out all swings of the Dow Jones Industrial Average\n(DJIA) of less than 20%. Figure 2 brings the data up to date and includes a 10-year history. It's a quarterly\nchart.\u003cbr\u003e\u003cbr\u003eThe index is the number of dollars required to buy enough DJIA stocks to yield $1.00 of dividends. It's\nthe inverse of the yield. The ratio corrects for inflation. Both the numerator (price) and the denominator\n(volume) are expressed in dollars, so the dollar value cancels out.","brand":"store-traders-com","offers":[{"title":"Default Title","offer_id":52133808111985,"sku":"\\V09\\C08\\Pricedi.PDF","price":2.95,"currency_code":"USD","in_stock":true}],"thumbnail_url":"\/\/cdn.shopify.com\/s\/files\/1\/0900\/3843\/6209\/files\/unnamed_69a0a013-f36d-4721-bf40-2612d67074ac.jpg?v=1739652966"},{"product_id":"v09-c10-reason-pdf","title":"V.9:10 (422-425): The Trader's Reason vs. Emotion by Terry S. Brown","description":"The Trader's Reason vs. Emotion\nby Terry S. Brown\u003cbr\u003e\u003cbr\u003eIn the late 1970s and early 1980s, Victor Sperandeo had a brilliant track record day trading stocks,\ncommodities and especially the Standard \u0026amp; Poor's 500 and NYFE futures. He had an idea. \"I was trading\nwell and by a strict set of rules,\" says Victor, \"making a lot of money when I was right and losing only a\nlittle when I was wrong. I figured that if I could do it, then I could train others to do it. I wanted to\nfranchise my methods and had visions of becoming the McDonald's of the financial markets.\"\u003cbr\u003e\u003cbr\u003eIt didn't work. Of the 39 traders he trained, only five made money and went on to pursue independent\ncareers in trading. All were taught the same details of Sperandeo's methods. All were given free access to\nany information in his office, including direct or phone contact with Victor himself. Each of them could\nhave mirrored Victor's trades. But most of them blew out within six months, some lasted longer, some\nless. Sperandeo was perplexed. He wanted to know why so many had failed.\u003cbr\u003e\u003cbr\u003eHe quickly realized that knowledge and intelligence had little to do with success in the markets. \"One of\nthe five who made money barely knew the alphabet,\" he recalls. \"Seriously, he was about as literate as a\nfifth-grader, but he always closed a losing position, and he let his profits run. On the other hand, one of\nthe traders who failed could consistently and correctly answer 98% of the questions on Jeopardy.\nKnowledge alone is not enough to make money in the markets.\"","brand":"store-traders-com","offers":[{"title":"Default Title","offer_id":52133808275825,"sku":"\\V09\\C10\\REASON.PDF","price":3.95,"currency_code":"USD","in_stock":true}],"thumbnail_url":"\/\/cdn.shopify.com\/s\/files\/1\/0900\/3843\/6209\/files\/unnamed_7fbfc2de-478e-4fe0-8bcb-ce9e44e7c776.jpg?v=1739652969"},{"product_id":"v09-c11-pcbuyer-pdf","title":"V.9:11 (468-470): PC Buyers Guide","description":"PC Buyers Guide\nSpeed Versus Price\nby Jack K. Hutson\u003cbr\u003e\u003cbr\u003eSooner or later, most traders give in to the urge to purchase a personal computer to help them analyze\nthe markets as well as manage their money in and out of the markets. One of my tasks here at STOCKS \u0026amp;\nCOMMODITIES has been to evaluate equipment for our editorial and circulation staff as well as for software\ntesting platforms. About 18 months ago, I undertook the task of evaluating personal computer hardware\nwith the hopes of producing a meaningful ranking of these systems for market technicians.\u003cbr\u003e\u003cbr\u003eAs with all methodologies, I have chosen what I believe to be an appropriate set of criteria. Generally, the\ntests for each of these machines were designed so that 25% of the time the machine's time was devoted to\nnumber crunching, 20% to graphics, 20% to spreadsheet-type work, and the remaining 35% to word\nprocessing and report writing.\u003cbr\u003e\u003cbr\u003eThe machines shown in Figure 1 were all augmented with a maximum speed processor as well as\nnumerical co-processor. They usually included a large hard disk and the best high-resolution graphics\nmonitor. If the machine supplier knew that we were testing the machine, they were generally aware that\nwe were looking for the most performance for the least money. Generally, the relationship between\ndollars spent and value received should have shown up as more or less a one-to-one relationship. But as\nyou can see in Figure 1, this is not the case. Figure 1 depicts price on the y-axis, lower prices at the top of\nthe axis, higher prices at the bottom, while relative functionality is shown on the x-axis. The higher\nfunctionality is to the right, the lower functionality to the left. Thus, the machines that are represented in\nthe upper right-hand corner of this chart (listed toward the top of the table in Figure 2) provide the most\nbang for the buck.","brand":"store-traders-com","offers":[{"title":"Default Title","offer_id":52133810143601,"sku":"\\V09\\C11\\PCBUYER.PDF","price":3.95,"currency_code":"USD","in_stock":true}],"thumbnail_url":"\/\/cdn.shopify.com\/s\/files\/1\/0900\/3843\/6209\/files\/unnamed_562caf96-d52d-4ef4-8e90-90e0f61884df.jpg?v=1739653019"},{"product_id":"v09-c02-shape-pdf","title":"V.9:2 (91-92): Predicting The Shape Of A Cycle Bottom by Michael R. Burk","description":"Predicting The Shape Of A Cycle Bottom\nby Michael R. Burk\u003cbr\u003e\u003cbr\u003eI define a cycle as what happens between peaks in my New Low Indicator. Since the beginning of 1978\nthere have been 24 complete cycles averaging a little over 120 trading days, or 24 weeks.\u003cbr\u003e\u003cbr\u003eCycle bottoms play out in two distinctive patterns, which I call V and W. Each bottom traces out the\npattern of its letter description. A V bottom is one where the price index declines to a bottom and then\nheads up again (Figure 1). In the W bottom the price index reaches a low, retraces a portion of the decline\nand then falls back to retest the previous bottom; it can make several retests, at which point it creates a\nmultiple W pattern (Figure 2).","brand":"store-traders-com","offers":[{"title":"Default Title","offer_id":52133810504049,"sku":"\\V09\\C02\\Shape.PDF","price":3.95,"currency_code":"USD","in_stock":true}],"thumbnail_url":"\/\/cdn.shopify.com\/s\/files\/1\/0900\/3843\/6209\/files\/unnamed_9187334f-ccaf-4180-8511-ad668001aebf.jpg?v=1739653040"},{"product_id":"v09-c08-mktvane-pdf","title":"V.9:8 (334-335): Market Vane Transformations by Kenneth L. Kinkopf Jr.","description":"Market Vane Transformations by Kenneth L. Kinkopf Jr.\u003cbr\u003e\u003cbr\u003eThe sentiment readings of the Market Vane service is a poll taken daily from futures trading advisors indicating the percentage that are bullish at that moment. Ironically, market consensus is used as a contrarian indicator. Does it work? This author transforms the Market Vane index into a better indicator.\u003cbr\u003e\u003cbr\u003eMarket consensus is a dynamic indicator with which to evaluate market activity. Ironically, however,\nthis tool is used as a contrarian indicator. The sentiment readings of the Market Vane service is a poll\ntaken daily from futures trading advisors indicating the percentage that are bullish at that moment. As a\nrule, high readings are signs of market tops, while low readings are signs of market bottoms. Barron's\npublishes this poll weekly under \"Investor Sentiment Readings.\"","brand":"store-traders-com","offers":[{"title":"Default Title","offer_id":52133811224945,"sku":"\\V09\\C08\\MKTVANE.PDF","price":2.95,"currency_code":"USD","in_stock":true}],"thumbnail_url":"\/\/cdn.shopify.com\/s\/files\/1\/0900\/3843\/6209\/files\/unnamed_e31de448-fb8a-4784-a4e8-53eb3ea420af.jpg?v=1739653043"},{"product_id":"v09-c04-merrill-pdf","title":"V.9:4 (139-139): Merrill Directional Patterns by Arthur A. Merrill, C.M.T.","description":"Merrill Directional Patterns\nby Arthur A. Merrill, C.M.T.\u003cbr\u003e\u003cbr\u003eCan we get clues to price performance from the swings of prices in the last hours of the preceding day?\nIf we ignore volume and the amount of change, the direction of the swings of prices can be summarized\nby a simple plus or minus and analysis is simplified. I've modestly (!) labeled the classification \"Merrill\ndirectional patterns,\" in hopes of some immortality.\u003cbr\u003e\u003cbr\u003eIf we consider the direction of the swings in the last four hours, there are 16 possible patterns (Figure 1).\nIf we consider only the last three hours, there are eight possibilities (Figure 2).","brand":"store-traders-com","offers":[{"title":"Default Title","offer_id":52133811585393,"sku":"\\V09\\C04\\MERRILL.PDF","price":2.95,"currency_code":"USD","in_stock":true}],"thumbnail_url":"\/\/cdn.shopify.com\/s\/files\/1\/0900\/3843\/6209\/files\/unnamed_6e114e3b-050e-4a34-a21a-304e415f0f50.jpg?v=1739653060"},{"product_id":"v09-c05-histori-pdf","title":"V.9:5 (208-210): The Historical Dow by Carl Sundquist","description":"The Historical Dow\nby Carl Sundquist\u003cbr\u003e\u003cbr\u003eRecently, The Wall Street Journal completed 94 years of continuous publication of the Dow Jones\nIndustrial and Railroad (now Transportation) averages. Quite a record. Charles Dow, the first editor and\nfounder of The Wall Street Journal, is credited with the compilation of the original averages. He did not\nuse a weighted mean or make adjustments of any nature but simply added the closing price of the stocks\nin his averages and divided the total by the number of companies in his list.\u003cbr\u003e\u003cbr\u003eThe Dow Jones Industrial Average (DJIA) as we know it dates back to October 1928. The list was then\nexpanded from 20 stocks with several substitutions to compile the original average of 30 stocks (Figure\n1). The average at that time was made up of some issues that are vaguely familiar today or strikes a\nmemory somehow, while others on the list have been completely forgotten, absorbed into other\ncompanies, changed their own names or gone out of business entirely. Keeping with the original system\nof compilation, the current price of the listed stocks in 1928 was added together and divided by 16.67.\u003cbr\u003e\u003cbr\u003eSubsequent changes were made in the average through the years. Various stocks were taken off the list,\nwhile others were added, with adjustments made for stock splits. The current DJIA's list has stocks in\ncommon with the original, but differs quite a bit otherwise (Figure 2). Curiously, International Business\nMachines Co. (IBM) has been the prodigal son of the Dow Jones Industrial Average, at times banished\nfrom the list yet allowed to return later. IBM was first placed on the list on May 26, 1932, replacing\nNational Cash Register, only to be replaced a few years later on March 14, 1939, by American Telephone\n\u0026amp; Telegraph (AT\u0026amp;T). Only after an absence of 40 years was IBM brought back into the fold on June 29,\n1979, replacing Chrysler Motors; it has remained on the list ever since. We are never told by whose\nmysterious hand at Dow Jones \u0026amp; Co., the keeper of the average, these changes are made. In fact, we are\nseldom told why the substitutions are made; we can only guess, watching the changes and using them as\nreflections of the era.","brand":"store-traders-com","offers":[{"title":"Default Title","offer_id":52133811618161,"sku":"\\V09\\C05\\HISTORI.PDF","price":3.95,"currency_code":"USD","in_stock":true}],"thumbnail_url":"\/\/cdn.shopify.com\/s\/files\/1\/0900\/3843\/6209\/files\/unnamed_4689b753-7b52-4425-a679-0ce6861f34e2.jpg?v=1739653062"},{"product_id":"v09-c11-merrill-pdf","title":"V.9:11 (453-454): Merrill MW Waves by Arthur A. Merrill, C.M.T.","description":"Merrill MW Waves\nby Arthur A. Merrill, C.M.T.\u003cbr\u003e\u003cbr\u003eSuppose prices have been moving in a certain way. What are the probabilities for future prices? You\nmust look to the past for similar situations.\u003cbr\u003e\u003cbr\u003eHow similar must the past situation be? If you ask your computer to search a historical database for an\nexact copy of a current price swing, it will have a difficult time. Suppose it succeeds in finding a\nduplicate situation, and you see that the market rose after the past price swing. Does this mean that now\nwe can count on a sure rise, with 100% probability? Of course not. The evidence is insufficient; it's called\nanecdotal evidence. If a coin turns up heads one time, it isn't a sure probability for another heads next\ntime.\u003cbr\u003e\u003cbr\u003eTo assess the true probability of possible outcomes for the current price pattern, you can't ask the\ncomputer for an exact duplication of the pattern. The situation must be similar, but not exact. Your\ncomputer must be able to find enough occasions to indicate a bias in the situation, and it needs enough\noccasions to formulate a probability for the future. For example, if prices rose 40 times and declined five\ntimes after a similar price pattern in the past, the probabilities for the current price swing would be 40\/45,\nor 89%.\u003cbr\u003e\u003cbr\u003eOf course, the past moves may have been the result of simple chance. To check this, you can use a\nstatistical test called chi square. You'll find it described in any statistical textbook.","brand":"store-traders-com","offers":[{"title":"Default Title","offer_id":52133812044145,"sku":"\\V09\\C11\\MERRILL.PDF","price":3.95,"currency_code":"USD","in_stock":true}],"thumbnail_url":"\/\/cdn.shopify.com\/s\/files\/1\/0900\/3843\/6209\/files\/unnamed_83a81b62-25a8-4441-ab0d-d36f57dd331f.jpg?v=1739653065"},{"product_id":"v09-c01-trendex-pdf","title":"V.9:1 (9-11): Trend Exhaustion Index by Clifford L. Creel, Ph.D.","description":"When a price trend changes direction, it is sometimes difficult to predict whether that change is just a\nsmall correction or the start of a major trend change. I use a simple indicator, which I call the trend\nexhaustion index (TEI), to help interpret such trend changes.\u003cbr\u003e\u003cbr\u003eTEI gives an indication of change in market direction. It is not infallible, but after using it for the past\nyear, I have learned to appreciate it as part of my technical toolbox. It is especially useful in giving exit\nsignals prior to major market declines.\u003cbr\u003e\u003cbr\u003eThe index is constructed by dividing the New York Stock Exchange (NYSE) new highs by the NYSE\nadvances each day and plotting a 10 day exponential moving average of this value. The formula is thus:\u003cbr\u003e\u003cbr\u003e...","brand":"store-traders-com","offers":[{"title":"Default Title","offer_id":52133813256561,"sku":"\\V09\\C01\\TRENDEX.PDF","price":2.95,"currency_code":"USD","in_stock":true}],"thumbnail_url":"\/\/cdn.shopify.com\/s\/files\/1\/0900\/3843\/6209\/files\/unnamed_2d2491e5-9c66-4a6c-b0c1-6a1bc63bc5a0.jpg?v=1739653092"},{"product_id":"v09-c09-pattern-pdf","title":"V.9:9 (378-382): Pattern Recognition And Candlesticks by Gary S. Wagner and Bradley L. Matheny","description":"Pattern Recognition And Candlesticks by Gary S. Wagner and Bradley L. Matheny\u003cbr\u003e\u003cbr\u003eHere's a look at the new order of artificial intelligence linked with the old order of candlestick charting\u003cbr\u003e\u003cbr\u003eBy now, who hasn't heard of the Japanese form of charting called candlesticks? Until Steve Nison\nintroduced candlestick charting to the West a few years ago, charting services or software programs that\noffered graphically displayed data in candlestick format were few and far between. Finding a guidebook\nor manual on interpretations of candlesticks and their patterns was almost unattainable unless one could\nread Japanese.\u003cbr\u003e\u003cbr\u003eSince then, there has been a stampede for chart services to offer traders the ability to chart data in\ncandlestick format. There has also been a groundswell of interest to learn about this form of technical\nanalysis. But the question is obvious. Why has there been so much curiosity about candlesticks? Why are\nmany Western technicians and professional traders incorporating candlesticks into their trading systems?\nHow useful are candlesticks?","brand":"store-traders-com","offers":[{"title":"Default Title","offer_id":52133813322097,"sku":"\\V09\\C09\\PATTERN.PDF","price":5.95,"currency_code":"USD","in_stock":true}],"thumbnail_url":"\/\/cdn.shopify.com\/s\/files\/1\/0900\/3843\/6209\/files\/unnamed_c4309162-8cf4-4e19-9ebf-a39292a6fcdc.jpg?v=1739653095"},{"product_id":"v09-c09-shobin-pdf","title":"V.9:9 (354-360): Steve Shobin Of Merrill Lynch by Thom Hartle","description":"Steve Shobin Of Merrill Lynch by Thom Hartle\u003cbr\u003e\u003cbr\u003eI'd first like to start off with some information about your background and how you first became\ninterested in technical analysis.\u003cbr\u003e\u003cbr\u003eI graduated from the University of Pittsburgh in 1966 as an English literature major; became a cab driver\nand a social worker and thought that there had to be a better way of making a living. So I joined Merrill\nLynch in 1967.\nI had always had an avocational interest in the stock market but never thought of using technical analysis.\nThen a gentleman named Mr. Berer from Pittsburgh introduced me to Chart Craft's three-point reversal\ntechnique, and I have been a technical person since.\u003cbr\u003e\u003cbr\u003eDid you move from straight point and figure to a number of different techniques?\u003cbr\u003e\u003cbr\u003eYou were almost forced to as a member of Bob Farrell's department. You really have to learn a vast\nspectrum of techniques; granted, there weren't as many back in 1967-68 as there are now, but to be a\ncomplete technician, you had to learn more than just point and figure. So once we were on the job we\nwere introduced to indicators, bar charting and other techniques as well.","brand":"store-traders-com","offers":[{"title":"Default Title","offer_id":52133813977457,"sku":"\\V09\\C09\\SHOBIN.PDF","price":5.95,"currency_code":"USD","in_stock":true}],"thumbnail_url":"\/\/cdn.shopify.com\/s\/files\/1\/0900\/3843\/6209\/files\/unnamed_cb1f69c2-390e-4aff-9257-9652e0f2f299.jpg?v=1739653117"},{"product_id":"v09-c12-mrkfuel-pdf","title":"V.9:12 (488-491): Market Fuel And Technical Analysis by D. Earl Essig","description":"Market Fuel And Technical Analysis\nby D. Earl Essig\u003cbr\u003e\u003cbr\u003eWhen traders hunt for the Holy Grail of commodity trading in futures and options, obvious clues to\nmarket direction are often overlooked. One such oversight generally occurs in analyzing price patterns as\nrelated to volume and open interest. Definitions may also differ from trader to trader, causing further\nconfusion. Here, both definition and situation can be clarified and summarized to make the task of\ndetecting market direction easier.\u003cbr\u003e\u003cbr\u003eSOME BASIC DEFINITIONS\u003cbr\u003e\u003cbr\u003eTotal volume: The amount of contracts traded on any given day of all listed months combined.\u003cbr\u003e\u003cbr\u003eTotal open interest: The total amount of contract positions not offset both long (buying) and short\n(selling) in all months combined.","brand":"store-traders-com","offers":[{"title":"Default Title","offer_id":52133814010225,"sku":"\\V09\\C12\\MRKFUEL.PDF","price":3.95,"currency_code":"USD","in_stock":true}],"thumbnail_url":"\/\/cdn.shopify.com\/s\/files\/1\/0900\/3843\/6209\/files\/unnamed_776640d5-faaf-4839-9ba4-3eec127e1f51.jpg?v=1739653119"},{"product_id":"v09-c06-sidebb-pdf","title":"V.9:6 (219-223): SIDEBAR: BUILDING THE VARIABLE-LENGTH MOVING AVERAGE","description":"BUILDING THE VARIABLE-LENGTH\nMOVING AVERAGE\u003cbr\u003e\u003cbr\u003eSeven steps to constructing a variable-length moving average, page 223.","brand":"store-traders-com","offers":[{"title":"Default Title","offer_id":52133814927729,"sku":"\\V09\\C06\\SIDEBB.PDF","price":2.95,"currency_code":"USD","in_stock":true}],"thumbnail_url":"\/\/cdn.shopify.com\/s\/files\/1\/0900\/3843\/6209\/files\/unnamed_d4cd1ff4-311e-4473-902a-39fe76891c9b.jpg?v=1739653142"},{"product_id":"v09-c03-sidebq-pdf","title":"V.9:3 (116-120): SIDEBAR: QUESTIONS CONCERNING THE SPECIALIST","description":"QUESTIONS CONCERNING THE\nSPECIALIST\u003cbr\u003e\u003cbr\u003eComputer parameters of the pseudo stock specialist used in the main article, page 120.","brand":"store-traders-com","offers":[{"title":"Default Title","offer_id":52133815845233,"sku":"\\V09\\C03\\SIDEBQ.PDF","price":2.95,"currency_code":"USD","in_stock":true}],"thumbnail_url":"\/\/cdn.shopify.com\/s\/files\/1\/0900\/3843\/6209\/files\/unnamed_9db68138-f409-4570-8678-2bb651cd4a0c.jpg?v=1739653176"},{"product_id":"v09-c10-pricech-pdf","title":"V.9:10 (415-418): Price Changes During Non-Trading Hours by George R. Arrington and Howard E. Arrington","description":"Price Changes During Non-Trading Hours\nby George R. Arrington and Howard E. Arrington\u003cbr\u003e\u003cbr\u003eOne frustrating aspect of trading commodities is the price changes that occur during non-trading hours.\nIt is difficult enough to make a profit when markets are open and buy and sell orders can be executed\nwithin a relatively short time. When markets are closed, however, the trader is faced with even more\nobstacles. Positions cannot be changed until the markets reopen, and in the interim traders are exposed to\nthe risks of changes in circumstances and prices.\u003cbr\u003e\u003cbr\u003eMost commodities futures markets are open seven to eight hours a day, while a few are open for only\nfour. Yet new information affecting the supply and demand for commodities arrives 24 hours a day.\nInformation that may affect commodities includes such things as trade embargoes, severe weather, war,\nlabor strikes, currency devaluation, government contracts, crop estimates and political assassinations. As\na result of the new information overnight and the ensuing changes in expectations, opening prices often\ndiffer and sometimes dramatically from the closing prices of the previous day.\u003cbr\u003e\u003cbr\u003eTo assess the extent of price changes during non-trading hours, we examined daily price data for 34\ncommodities futures contracts. The data generally covered the period from June l990 to July l99l. We\nignored price data when the open interest was less than 500 to avoid distortions that might occur in\ninactive markets. Distortions might occur, for example, when the September l990 contract expires and\nthe September l99l contract begins trading. We calculated standard t-statistics to evaluate whether the\naverage price changes we observed were statistically significant (that is, non-zero).","brand":"store-traders-com","offers":[{"title":"Default Title","offer_id":52133815910769,"sku":"\\V09\\C10\\PRICECH.PDF","price":3.95,"currency_code":"USD","in_stock":true}],"thumbnail_url":"\/\/cdn.shopify.com\/s\/files\/1\/0900\/3843\/6209\/files\/unnamed_b259de48-ff42-4bb2-a682-758aed1a2405.jpg?v=1739653178"},{"product_id":"v09-c05-sidebt-pdf","title":"V.9:5 (202-205): SIDEBAR: TWO VERSIONS OF THE RSI FORMULA","description":"TWO VERSIONS OF THE RSI FORMULA\u003cbr\u003e\u003cbr\u003eDerivation of the RSI formula containing an exponential moving average, from the basic RSI formula, page 205.","brand":"store-traders-com","offers":[{"title":"Default Title","offer_id":52133816533361,"sku":"\\V09\\C05\\SIDEBT.PDF","price":2.95,"currency_code":"USD","in_stock":true}],"thumbnail_url":"\/\/cdn.shopify.com\/s\/files\/1\/0900\/3843\/6209\/files\/unnamed_a7e8db35-56ef-4863-8990-8afb9e13f359.jpg?v=1739653209"},{"product_id":"v09-c02-oftrend-pdf","title":"V.9:2 (49-52): Of Trends And Random Walks by E. Michael Poulos","description":"Of Trends And Random Walks\nby E. Michael Poulos\u003cbr\u003e\u003cbr\u003eM y distrust of the current crop of technical indicators that use fixed-length lookback intervals, with\nno attempt to use a price-time model, motivated me to do some research into the subject. For example,\none sees chart services publishing a nine-day stochastic and\/or relative strength indicator. A variety of\nother indicators using moving averages or the difference between moving averages also use fixed lengths.\nBut there simply is no justification for using nine (or any other fixed number of days) as some sort of\nsacred number.\u003cbr\u003e\u003cbr\u003eThe first six days of Figure 1, part a, have exactly the same moving average value as the first six days of\nFigure 1, part b. The close of the seventh day, X, is exactly the same value in both cases. Thus, this kind\nof indicator would yield exactly the same number for two very different market conditions. The problem\nis not only the fixed-length lookback; the smoothing effect of the moving average destroys all\ninformation about the shape of the market movement. An exponential moving average would do a little\nbetter here, but it too would lose far too much shape information.\u003cbr\u003e\u003cbr\u003eThe five-day moving average (MA) of Figure 1, part c, is equal to the five-day moving average of Figure\n1, part d. The eight-day moving averages of the two are also equal. They would therefore show exactly\nthe same differences of MAs for two very different price movements. The possibility of an uptrend\nindication in one case and downtrend in the other during the last five days is completely lost. The major\nproblem at this point is loss of shape information.\u003cbr\u003e\u003cbr\u003eIn Figure 1, parts e and f, the sum of the upclose changes are equal and the sum of the downclose changes\nare equal. The RSI calculation would show the same neutral indication in both cases. Not only do the two\ncases differ dramatically, their last five days might be indicative of a strong trend, one down and the other\nup.","brand":"store-traders-com","offers":[{"title":"Default Title","offer_id":52133817024881,"sku":"\\V09\\C02\\OFTREND.PDF","price":3.95,"currency_code":"USD","in_stock":true}],"thumbnail_url":"\/\/cdn.shopify.com\/s\/files\/1\/0900\/3843\/6209\/files\/unnamed_c1ada8ff-636d-4111-88b3-34a8fc894cbf.jpg?v=1739653226"},{"product_id":"v09-c03-another-pdf","title":"V.9:3 (129-130): Another Chance With Breakaway Gaps by John Crane","description":"Another Chance With Breakaway Gaps\nby John Crane\u003cbr\u003e\u003cbr\u003eSuppose you've been monitoring the market for weeks, faithfully updating your daily charts and\nstudying your favorite indicators. The criteria for your trade are met and, at long last, a buy signal is\ngenerated. You know that once resistance is broken, the ensuing move will be substantial.\u003cbr\u003e\u003cbr\u003eThe next morning you place a call to your broker, only to hear that the market gapped higher on the open,\nsoaring to levels somewhere in a neighboring galaxy. This was definitely not a part of your\nwell-developed trading plan. You then decide to wait for the market to pull back during the day to enter\nat a more attractive price. But the market doesn't pull back. Disheartened, you cancel your order and\nbegin to search for another market with similar profit potential.\u003cbr\u003e\u003cbr\u003eDoes this scenario sound familiar? It happens to even the best and most experienced futures traders.\nWhen a market gaps to higher (or lower) levels, many traders will hesitate to enter at even higher (or\nlower) levels than originally planned and often miss an explosive move in the market. But occasionally,\nyou do get a second chance to enter the trade before the explosive move by the judicious use of\nbreakaway gaps.","brand":"store-traders-com","offers":[{"title":"Default Title","offer_id":52133817975153,"sku":"\\V09\\C03\\ANOTHER.PDF","price":2.95,"currency_code":"USD","in_stock":true}],"thumbnail_url":"\/\/cdn.shopify.com\/s\/files\/1\/0900\/3843\/6209\/files\/unnamed_b5dc4b76-fad1-4a0c-bd70-5e006f6e7b7f.jpg?v=1739653271"},{"product_id":"v09-c03-spread-pdf","title":"V.9:3 (127-128): Spread Prices As A Leading Indicator by Curtis McKallip Jr.","description":"Spread Prices As A Leading Indicator\nby Curtis McKallip Jr.\u003cbr\u003e\u003cbr\u003eCommodities that are deliverable today trade at a different price than the very same commodity to be\ndelivered in the future. This price differential is called a spread.\u003cbr\u003e\u003cbr\u003eSpreads exist because of two factors: charges (usually interest and storage charges) and relative demand\nfor a product. Assuming these two factors stay relatively constant, the spread is controlled by the demand\nanticipated in the short run versus that for longer periods. A recent extreme example of a commodity\nspread is crude oil during the 1990 Iraqi\/Kuwait crisis, when near-month contracts were bid up higher\nthan far-month contracts because of the threat of a short-term supply disruption.\u003cbr\u003e\u003cbr\u003eFinancial and gold contracts trade mostly on real and anticipated interest rate differentials. For this\nreason, their spreads are much more complex to analyze.\u003cbr\u003e\u003cbr\u003eMonth-to-month spreads often can be used to pick tops and bottoms in agricultural commodities. The\nfollowing examples show how spreads often diverge from price action at critical points. While the\nmethod doesn't always work, it can be a very helpful tool.","brand":"store-traders-com","offers":[{"title":"Default Title","offer_id":52133819122033,"sku":"\\V09\\C03\\SPREAD.PDF","price":2.95,"currency_code":"USD","in_stock":true}],"thumbnail_url":"\/\/cdn.shopify.com\/s\/files\/1\/0900\/3843\/6209\/files\/unnamed_52d294f6-da05-42b1-9611-103eac08b8f4.jpg?v=1739653302"},{"product_id":"v09-c04-armsind-pdf","title":"V.9:4 (145-147): Using The Arms Index In Intraday Applications by Richard W. Arms Jr.","description":"Using The Arms Index In Intraday Applications\nby Richard W. Arms Jr.\u003cbr\u003e\u003cbr\u003eA few weeks ago, I received a call from an analyst who had read a number of my recent articles in\nSTOCKS \u0026amp; COMMODITIES and had an interesting question. \"I've developed a new index to measure the\nmarket and want to know how I can have it named after me,\" he said. My somewhat facetious advice\nwas, \"All you need to do is wait about a quarter century, have a lot of luck and have some very good\nfriends!\"\u003cbr\u003e\u003cbr\u003eI wish I could have been more helpful to the gentleman, but there really was no better answer. He was\nreferring, of course, to the fact that the index that I invented in 1967 is now known as the Arms Index.\nBut it wasn't always that way. It was first called TRIN, short for Trader's Index, because that was the\nsymbol for it on one of the quotation services. Only after many years and a good deal of effort has the\nindex's name changed. This was done primarily through the efforts of a great number of highly respected\ntechnicians who thought that credit should be given to the developer of a technique. The change was\ngradual, until it is now carried on most electronic systems, both national TV news networks, most\nadvisory letters and many business publications as \"ARMS\"\u003cbr\u003e\u003cbr\u003eDEFINING AN INDEX\nWhat is this index, and why hasn't it fallen by the wayside as another indicator that became too popular\nand thereby destroyed itself? It is just a very simple calculation that tells us whether the up stocks or the\ndown stocks are getting more than their share of the volume. The index is based on the assumption that\nvolume tends to swing in the direction of market sentiment. If we are in a bullish atmosphere, volume\nwill tend to be proportionately higher in the stocks that are going up. If the bears are in control, the\nvolume will tend to be proportionately heavier in those stocks that are declining. ...","brand":"store-traders-com","offers":[{"title":"Default Title","offer_id":52133819187569,"sku":"\\V09\\C04\\ARMSIND.PDF","price":3.95,"currency_code":"USD","in_stock":true}],"thumbnail_url":"\/\/cdn.shopify.com\/s\/files\/1\/0900\/3843\/6209\/files\/unnamed_c6427e40-216b-4e26-9c70-6241afd8d6bb.jpg?v=1739653305"},{"product_id":"v09-c06-takealo-pdf","title":"V.9:6 (242-243): Take A Look At The Dow by Daniel E. Downing","description":"Take A Look At The Dow\nby Daniel E. Downing\u003cbr\u003e\u003cbr\u003eIn the past, one of the first requirements of being a technical analyst was a promise of sorts to ignore the\nprice action of the Dow Jones Industrial Average. A technician had to focus on the action of more\nbroadly based stock averages such as the New York Composite Index, the Standard \u0026amp; Poor's 500, or the\nValue Line Index to get an understanding of what the market was doing. The thinking behind this was\nthat the price action of these more broadly based indices gave a truer picture of what was going on in the\nstock market and better represented the best predictive mechanism for price forecasting. Strength in the\nS\u0026amp;P 500 meant that the entire equity market was strong, regardless of the action of the Dow Jones\nIndustrials (DJI).\u003cbr\u003e\u003cbr\u003eThat thinking must change. Now, the real world is best represented by the Dow Jones Industrials, and this\nis why the time has come to focus on the action of the DJI more than any other stock index or average.\u003cbr\u003e\u003cbr\u003eINSTITUTIONAL VS. INDIVIDUAL\u003cbr\u003e\u003cbr\u003eOver the past 20 years, the institutional investor has become the dominant player in the stock market and\nthe individual investor has become the less dominant player. With the dominance of the institutional\ninvestor has come (in the last five years) a priority of mirroring and not beating the stock averages\nthrough the advent of indexing and index funds. A survey shows that 27% of all institutional equity funds\nare indexed. The net result? A small number of large-capitalization stocks are concentrated in the hands\nof institutional owners. Of the 30 stocks in the DJI, 28 most likely fall into this category","brand":"store-traders-com","offers":[{"title":"Default Title","offer_id":52133823185265,"sku":"\\V09\\C06\\TAKEALO.PDF","price":2.95,"currency_code":"USD","in_stock":true}],"thumbnail_url":"\/\/cdn.shopify.com\/s\/files\/1\/0900\/3843\/6209\/files\/unnamed_5d01505c-3eb8-432d-b0ad-f7b2361e3dc8.jpg?v=1739653337"},{"product_id":"v09-c11-develop-pdf","title":"V.9:11 (473-476): Developing A System by John Sweeney","description":"Developing A System\nby John Sweeney\u003cbr\u003e\u003cbr\u003eThe great thing about many of the new trading support systems is that they facilitate the respectable\npractice of \"dinking around\": that process of tweaking every crazy idea that strikes one until something\nproductive and, hopefully, profitable pops out. I've found this is best done on quiet Sunday afternoons.\u003cbr\u003e\u003cbr\u003eNow, this article is not for everyone. I'm going to take you through the grind-it-out process of developing\na trading system. As you'll see, even with nifty software and fast computers, there's mostly sweat and dirt\nbefore you get to the goldif you get any at all. Perhaps this is really for those new to the process, with\nstars in their eyes.\u003cbr\u003e\u003cbr\u003eWhy show all the laborious detail? It's a reality check. Many people buy computers and software\nexpecting their lives to get easier. However, my jaded experience is that the problems just change, old\nabilities fade and the new abilities take a while to become productive. An old boss of mine said: \"A new\nsystem never makes money. It just replaces lots of clerks with expensive systems analysts.\" Even though\nI'm an advocate and a user of computer trading systems, I don't want anyone to get the idea that systems\nare a bed of roses. The initial gain is the elimination of wishful thinking that goes with visual\ninspection\/analysis. Later, with practice, productivity is improved. Hence this cautionary note on the real\nworld of trading systems development.","brand":"store-traders-com","offers":[{"title":"Default Title","offer_id":52133823250801,"sku":"\\V09\\C11\\DEVELOP.PDF","price":3.95,"currency_code":"USD","in_stock":true}],"thumbnail_url":"\/\/cdn.shopify.com\/s\/files\/1\/0900\/3843\/6209\/files\/unnamed_5ff58ffc-0a67-4ce0-9df9-c5770bd9cc89.jpg?v=1739653340"},{"product_id":"v09-c09-timeser-pdf","title":"V.9:9 (347-352): Time Series Forecasting: ARMAX by Thomas H. Lincoln","description":"Time Series Forecasting: ARMAX by Thomas H. Lincoln\u003cbr\u003e\u003cbr\u003eAs an avid reader of stock market books and newspapers, I have observed the overwhelming number\nof graphic illustrations of economic and market indicators. Oftentimes some indicators are contradicted\nby others and leave the future direction of the market probable, but not always quantitatively definite.\nDetermined to make a useful forecast from the many graphs and indicators, I have combined a multiple\nregression model of several economic indicators and related market indicators with the autoregressive\nmoving average (ARMA) models of Box-Jenkins to forecast the Standard \u0026amp; Poor's 500 cash index six\nmonths ahead. The final model, often called ARMAX (autoregressive moving average exogenous variables\nmodel), provides a fundamental and technical time series approach to market forecasting.\u003cbr\u003e\u003cbr\u003eThere are clear and definite steps involved in building an ARMAX forecasting model, which we will\ndiscuss here, and I can also provide a sample model with good regression statistics and good forecasting\nstatistics. The economic and stock data were retrieved from the two public domain Federal Reserve\nbulletin boards. The indicators I used are noted in Figure 1.","brand":"store-traders-com","offers":[{"title":"Default Title","offer_id":52133824495985,"sku":"\\V09\\C09\\TIMESER.PDF","price":4.95,"currency_code":"USD","in_stock":true}],"thumbnail_url":"\/\/cdn.shopify.com\/s\/files\/1\/0900\/3843\/6209\/files\/unnamed_a21ea231-138b-42c8-94ac-b2aafc884f0f.jpg?v=1739653362"},{"product_id":"v09-c08-selecti-pdf","title":"V.9:8 (328-333): Selecting And Interpreting Leading Indicators by Roger Pilloton","description":"Selecting And Interpreting Leading Indicators by Roger Pilloton\u003cbr\u003e\u003cbr\u003eAdjusting for the weaknesses of leading indicators so that you are able to select, interpret, and check their reliability.\u003cbr\u003e\u003cbr\u003eLeading indicators play a major role in economic and stock market forecasts. For example, the index of\nleading indicators calculated by the U.S. Department of Commerce is widely published every month. It is\nclosely studied by economic professionals. It influences, directly or indirectly, the actions of millions in\nmany fields, including politics, business and finance. It is closely watched because the peaks and valleys\nof its curve often precede those of the U.S. economy by several months. The index, theoretically,\nforecasts the starts and ends of recessions.","brand":"store-traders-com","offers":[{"title":"Default Title","offer_id":52133825347953,"sku":"\\V09\\C08\\SELECTI.PDF","price":5.95,"currency_code":"USD","in_stock":true}],"thumbnail_url":"\/\/cdn.shopify.com\/s\/files\/1\/0900\/3843\/6209\/files\/unnamed_812404cb-c668-496d-942f-03953cd78b8b.jpg?v=1739653398"},{"product_id":"v09-c12-sidebex-pdf","title":"V.9:12 (482-485) SIDEBAR: Explaining r by Jim Bianco, C.M.T.","description":"EXPLAINING r\u003cbr\u003e\u003cbr\u003eCorrelation analysis measures the degree of relationship between two variables. The correlation coefficient r is one popular\nstatistical index for this purpose. The values for r range between +1 to -1; a +1 reading indicates that the two variables are\nperfectly correlated, while a -1 reading indicates a perfect inverse relationship. An r of 0 indicates that the two variables have\nno correlation. The correlation coefficient r measures the relationship between two variables that are believed to be linear.\nFor instance, a straight line is used to describe the relationship if the two variables were plotted on a graph using an X and Y\naxis. Sometimes, two variables will have a relationship that is described by a line that curves. The use of the formula for r is\nrestricted to relationships that are linear.\u003cbr\u003e\u003cbr\u003eThe correlation coefficient measures only the degree of association between two variables. It is important to remember that\nr is not a measure of cause and effect. A large positive r does not mean that if one variable is large, this causes the other variable\nto be large.\u003cbr\u003e\u003cbr\u003eThe formula for r is :","brand":"store-traders-com","offers":[{"title":"Default Title","offer_id":52133825380721,"sku":"\\V09\\C12\\SIDEBEX.PDF","price":2.95,"currency_code":"USD","in_stock":true}],"thumbnail_url":"\/\/cdn.shopify.com\/s\/files\/1\/0900\/3843\/6209\/files\/unnamed_a112a6f9-8788-4eb6-9d49-42645d88275e.jpg?v=1739653401"},{"product_id":"v09-c02-sidebde-pdf","title":"V.9:2 (80-81): SIDEBAR: DERIVATION OF THE RULE OF 72","description":"DERIVATION OF THE RULE OF 72\u003cbr\u003e\u003cbr\u003eThe mathematics behind the rule of 72, stating that if an amount is invested at a compound interest rate until it doubles in value, then the product of the number of years (or periods) and the interest rate is approximately equal to 72; page 81.","brand":"store-traders-com","offers":[{"title":"Default Title","offer_id":52133826560369,"sku":"\\V09\\C02\\SIDEBDE.PDF","price":2.95,"currency_code":"USD","in_stock":true}],"thumbnail_url":"\/\/cdn.shopify.com\/s\/files\/1\/0900\/3843\/6209\/files\/unnamed_f569fa52-7c7c-4f92-9317-63a17083ad31.jpg?v=1739653434"},{"product_id":"v09-c01-emotion-pdf","title":"V.9:1 (27-28): Managing Emotions And Money by Robert J. Hamilton","description":"Managing Emotions And Money\nby Robert J. Hamilton\u003cbr\u003e\u003cbr\u003eThe pitfalls of trading are well known to investors as well as traders. As perils go, the star performers\nby far and away are hope, fear and greed. The mavens of trading theory agree that avoiding these pitfalls\nwill lead to successful and profitable trading. The problem is, the mavens never tell you how to avoid\nthose pitfalls successfully. They don't even tell you how to get a good commission discount.\u003cbr\u003e\u003cbr\u003eSuccessful option and commodity traders usually won't admit the \"h\" wordhopeto their trading\nvocabulary. They know that whenever you get into the hope mode, your position is usually terminal and it\nmay very well end up a loser. When you have a position that is in trouble, the hope of not wanting to take\na loss or wanting to at least break even will many times cause you to neglect sound capital management\nof limiting risk. More often than not, that hope will betray you and you will only take a bigger loss later.\nMost successful traders have had to deal with this affliction at one time or another. If you persist in this\nhope syndrome, ultimately, it will devastate you.","brand":"store-traders-com","offers":[{"title":"Default Title","offer_id":52133827248497,"sku":"\\V09\\C01\\EMOTION.PDF","price":2.95,"currency_code":"USD","in_stock":true}],"thumbnail_url":"\/\/cdn.shopify.com\/s\/files\/1\/0900\/3843\/6209\/files\/unnamed_2a98fca3-0ea3-43a2-b819-1827493f7b02.jpg?v=1739653461"},{"product_id":"v09-c07-dowtheo-pdf","title":"V.9:7 (288-292): Dow Theory Confirmation And Divergence by Richard L. Evans","description":"Dow Theory Confirmation And Divergence\nby Richard L. Evans\u003cbr\u003e\u003cbr\u003eAccording to one of the most important tenets of the Dow theory, the Dow Jones Industrial and\nTransportation Averages must confirm each other to be able to derive forecasting significance from them.\nIn The Dow Theory, originally published in 1932, Dow theorist Robert Rhea states: \"The movements of\nboth the railroad and industrial stock averages should always be considered together. The movement of\none price average must be confirmed by the other before reliable inferences may be drawn. Conclusions\nbased upon the movement of one average, unconfirmed by the other, are almost certain to prove\nmisleading.\"\u003cbr\u003e\u003cbr\u003eIntuitively, confirmation and divergence are acceptable as the bases of not only the Dow theory but of\nmuch of modern technical theory. However, there are questions to be answered regarding confirmation\nand other fundamentals of the Dow theory, as well as the critical question of interpretation.","brand":"store-traders-com","offers":[{"title":"Default Title","offer_id":52133827281265,"sku":"\\V09\\C07\\DOWTHEO.PDF","price":4.95,"currency_code":"USD","in_stock":true}],"thumbnail_url":"\/\/cdn.shopify.com\/s\/files\/1\/0900\/3843\/6209\/files\/unnamed_efb0bd54-6b51-405b-a1ce-cb7e63389340.jpg?v=1739653464"},{"product_id":"v09-c10-issuevo-pdf","title":"V.9:10 (419-421): An Issue\/Volume Weighted Long-Term Arms Index by Jack Rusin","description":"An Issue\/Volume Weighted Long-Term Arms\nIndex\nby Jack Rusin\u003cbr\u003e\u003cbr\u003eConsider, if you will, two vastly simplified trading days on the New York Stock Exchange (NYSE).\nOn the first day, 10 issues advance and 10 decline with 100 shares of up volume and 200 shares of down\nvolume. On the second day, the same 10 issues advance and the same 10 decline, but this time there are\n200 shares of up volume and only 100 shares of down volume.\u003cbr\u003e\u003cbr\u003eUsing the Arms index, or TRIN (for trading index), for the first day would result in [10\/10]\/[100\/200] or\n2. The TRIN for the second day would be [10\/10]\/[200\/100], or 0.50.\u003cbr\u003e\u003cbr\u003eSo far, so good. But what if we want to develop a long-term Arms index? To keep matters simple, let's\ncall two days \"long term,\" since the same principles apply regardless of the time period chosen. In the\nMay 1991 STOCKS \u0026amp; COMMODITIES article by Richard Arms, the inventor of the index wrote in reference\nto the 21 - and 55-day crossover: \"It is merely the 21-day moving average of the Arms index\nsuperimposed upon the 55-day moving average of the Arms index. It is a simple arithmetic moving\naverage in both cases.\"\u003cbr\u003e\u003cbr\u003eNow apply this formula to our example, using 2DAI for the two-day Arms index: 2DAI = [2.00 + 0.50]\/2\n= 2.5\/2 = 1.25. According to the index theory, a reading of 1.00 is neutral both daily and long term. A\nreading below one indicates that, on average, more volume is going into each advancing issue, while a\nreading above one indicates that more volume is going into each declining issue.","brand":"store-traders-com","offers":[{"title":"Default Title","offer_id":52133827314033,"sku":"\\V09\\C10\\ISSUEVO.PDF","price":2.95,"currency_code":"USD","in_stock":true}],"thumbnail_url":"\/\/cdn.shopify.com\/s\/files\/1\/0900\/3843\/6209\/files\/unnamed_ef5a5f8d-4b65-4416-a222-6802b81e91da.jpg?v=1739653466"},{"product_id":"v09-c10-perelia-pdf","title":"V.9:10 (426-429): P\/E Ratio Reliability by High Stokely and Ken Stewart","description":"P\/E Ratio Reliability\nby Hugh Stokely and Ken Stewart\u003cbr\u003e\u003cbr\u003eAlert traders can do well in financial instruments, but short-term trading usually averages out close to\na zero-sum game that is, a dollar won tends to come directly out of the pocket of a less alert trader or\ninvestor.\u003cbr\u003e\u003cbr\u003eFinding positive-sum gamesthose in which everyone wins can improve the odds. Historically,\ngrowth stocks have provided a \"positive sum\" a growing investment pie that rewards the winner of a\ntrade extremely well but also allows the loser to build investment value over time.\u003cbr\u003e\u003cbr\u003eEven in quick-response trading, a case exists for fishing in a pond of seasoned growth stocks that have\nstrong underlying company and market characteristics. A low-capitalization, less seasoned stock is\nparticularly vulnerable to random shocks that override fundamental and technical logic. Often, a seasoned\nstock is a better bet to reflect the factor that attracted the trader's attention to begin with. Because\nvolatility is inherent in equities and derivatives, there are significant opportunities for trading and\ncombination strategies in seasoned growth stocks.\u003cbr\u003e\u003cbr\u003eGrowth stocks increase in value by exploiting longer-term fundamental trends. Over time, effective\nmanagers incorporate improvements in technology into the company infrastructure, thus creating\nmarketing advantages that build profit margins and earnings. For companies categorized as growth\nstocks, superior earnings performance can be amplified by expanding price\/earnings multiples.","brand":"store-traders-com","offers":[{"title":"Default Title","offer_id":52133828133233,"sku":"\\V09\\C10\\PERELIA.PDF","price":3.95,"currency_code":"USD","in_stock":true}],"thumbnail_url":"\/\/cdn.shopify.com\/s\/files\/1\/0900\/3843\/6209\/files\/unnamed_3c08cb62-b04d-452e-adce-636270cbf17d.jpg?v=1739653469"},{"product_id":"v09-c01-sidebh-pdf","title":"V.9:1 (14-16): SIDEBAR: HLC INDEX","description":"HLC INDEX\u003cbr\u003e\u003cbr\u003eA version of the double smoothed stochastic index factoring in the e high, low and close.","brand":"store-traders-com","offers":[{"title":"Default Title","offer_id":52133829837169,"sku":"\\V09\\C01\\SIDEBH.PDF","price":2.95,"currency_code":"USD","in_stock":true}],"thumbnail_url":"\/\/cdn.shopify.com\/s\/files\/1\/0900\/3843\/6209\/files\/unnamed_67cc2a24-36b8-4e38-b2f7-e0513f983467.jpg?v=1739653510"},{"product_id":"v09-c02-trendli-pdf","title":"V.9:2 (77-80): Trendlines by Melanie F. Bowman and Thom Hartle","description":"Trendlines\nby Melanie F. Bowman and Thom Hartle\u003cbr\u003e\u003cbr\u003eTrendlines are those lines drawn on charts to assist the technician in analyzing a market. A trendline\ndrawn below rising prices is known as a demand, or oversold, line, while a trendline drawn above\ndeclining prices is known as a supply, or overbought, line. The direction of the trend is indicated by the\nascending trendline or the declining trendline. A penetration of the trendline by price is clear evidence of\na change in the trend. In addition, trendlines also give an analyst the added benefits of gauging whether a\ntrend is accelerating or on the verge of dying out, setting price objectives for trend reversals and choosing\ntarget prices at which to increase the size of a short or long position.\u003cbr\u003e\u003cbr\u003eIn the classic uptrend, highs and lows both get higher. The trendline is drawn through at least two, and\npreferably three, ascending lows. The first step is to identify the low prices on a bar chart that are\nsignificant in regard to the establishment of the up trendline. Since an up trendline is another name for a\ndemand line, then looking for any evidence of demand is the first step in determining the placement of\nthe trendline. Typically, demand patterns will encompass two to five trading days. The simplest pattern ..\nis basically a three-day head-and-shoulders bottom, as shown in Figure 1. The low for Day 1 is surpassed\non Day 2, while on Day 3 the low for that day is at the approximate price level established on Day 1. Day\n1 is the left shoulder, while Day 2 represents the head and Day 3 is the right shoulder. The low on Day 3\n at the same level as Day 1 indicates that buyers are increasing their level of commitment or\nwillingness to buy aggressively. This is a positive sign of demand.\u003cbr\u003e\u003cbr\u003eAnother demand pattern is a two-day double bottom (Figure 2). Here, the buyers have established long\npositions two days consecutively. During an uptrend, a demand line should be drawn connecting these\npatterns (Figure 3, points a and b). Projecting this line forward will establish price levels that the technical analyst will be able to use to anticipate demand or support for the market. Similarly, in a\ndowntrend, the lows continually move lower, as do the highs. The down trendline represents a supply line.","brand":"store-traders-com","offers":[{"title":"Default Title","offer_id":52133830230385,"sku":"\\V09\\C02\\TRENDLI.PDF","price":4.95,"currency_code":"USD","in_stock":true}],"thumbnail_url":"\/\/cdn.shopify.com\/s\/files\/1\/0900\/3843\/6209\/files\/unnamed_4aadd8b5-5dc5-48f4-b735-a75ea8f6e5b2.jpg?v=1739653525"},{"product_id":"v09-c03-adx-pdf","title":"V.9:3 (101-102): The Average Directional Movement Index (ADX) by Thom Hartle","description":"The Average Directional Movement Index (ADX)\nby Thom Hartle\u003cbr\u003e\u003cbr\u003eDirectional movement, according to technician J. Welles Wilder, is one of the most interesting aspects\nof market analysis. Markets clearly move from trending periods to trading ranges, but determining when\nthis change occurs presented a challenge. To meet this challenge Wilder developed the Average\nDirectional Movement Index (ADX).\u003cbr\u003e\u003cbr\u003eThe Average Directional Movement Index is an indicator that is designed to rate the directional\nmovement of stocks or commodities. The index uses a scale of zero to one hundred to rate the trend\nintensity of a tradable. Various markets can be followed and evaluated for trend intensity. After rating\neach market, you use trend-following systems on the tradeables with a high rating. The tradeables with a\nlow rating on the ADX scale should be followed using a trading range system.\u003cbr\u003e\u003cbr\u003eDetermining the ADX value is a five-step process and begins with an evaluation of the basic directional\nmovement of the market. There will be only one directional movement value for each day. First, today's\nhigh is compared with yesterday's high (Figure 1, points A and C). This difference is defined as the plus\ndirectional movement (+DM). Comparing today's low with yesterday's low (Figure 2, points B and D)\ndefines the minus directional movement (-DM). Minus DM is for the purpose of labeling the value only;\nthe value of the -DM is always a positive number. Whichever reading is larger, +DM or -DM, will be\nused for each day.","brand":"store-traders-com","offers":[{"title":"Default Title","offer_id":52133830263153,"sku":"\\V09\\C03\\ADX.PDF","price":3.95,"currency_code":"USD","in_stock":true}],"thumbnail_url":"\/\/cdn.shopify.com\/s\/files\/1\/0900\/3843\/6209\/files\/unnamed_b7ec2374-4bc4-4068-8638-5dd48755955d.jpg?v=1739653528"},{"product_id":"v09-c03-onbalan-pdf","title":"V.9:3 (121-123): On-Balance Volume And The Dow Jones Utility Index by Daniel E. Downing","description":"On-Balance Volume And The Dow Jones Utility\nIndex\nby Daniel E. Downing\u003cbr\u003e\u003cbr\u003eBetween Thursday, October 19, 1990, and Monday, October 22, 1990, the Dow Jones Industrial\nAverage (DJIA) gained more than 127 points. More important than the points gained in the DJIA,\nhowever, is the volume on which the gain occurred, as well as the small point gain (3.4 points) that\noccurred in the Dow Jones Utility Index. The on-balance volume (OBV) line for the New York\nComposite Index (an index of every stock listed on the New York Stock Exchange) and the price chart\nfor Dow Jones Utility Index both broke out above long-term downtrend lines. When breakouts such as\nthese have occurred in the past, it has led to higher stock prices, generally over a six-month period.\u003cbr\u003e\u003cbr\u003eON-BALANCE VOLUME\u003cbr\u003e\u003cbr\u003eAn OBV line is an internal that is, not based on price technical indicator for the stock market. The\nOBV line is a running sum of each day's volume. If the market closes up for the day, then today's volume\nis added. If the market closes down for the day, then today's volume is subtracted.\u003cbr\u003e\u003cbr\u003eGenerally, technicians look for the OBV line to show positive or negative divergence from the price line\nof a particular market that is, we look for a change in direction or a breakout in the line before a\nchange in direction or breakout occurs in the index. We base our OBV line on the action of the New York\nComposite Index. The composite index rose between October 19 and October 22, 1990, so the OBV line\nbroke out to the upside. You can see this in the last column of Xs on the far right side of the point and\nfigure chart in Figure 1.","brand":"store-traders-com","offers":[{"title":"Default Title","offer_id":52133830426993,"sku":"\\V09\\C03\\ONBALAN.PDF","price":2.95,"currency_code":"USD","in_stock":true}],"thumbnail_url":"\/\/cdn.shopify.com\/s\/files\/1\/0900\/3843\/6209\/files\/unnamed_d04bff6e-6cfb-42c5-9427-33a1a23e5f3e.jpg?v=1739653530"},{"product_id":"v09-c06-topsbot-pdf","title":"V.9:6 (228-229): Picking Tops And Bottoms With The Tick Index by Tim Ord","description":"Picking Tops And Bottoms With The Tick Index\nby Tim Ord\u003cbr\u003e\u003cbr\u003eAs a young trader, I first used moving averages, point and figure charts and some Gann methods and\nthen moved on to the Elliott wave fad. But none of these methods or techniques really gave me a strong\nsignal for a top or bottom in the market. What I did learn in my early years as a trader was that running\nwith the masses is a guaranteed subscription to failure. It is said that 80% of the people who trade the\nmarkets lose; from my experience, I'd say this is true. The losing majority fund the marketwise minority.\u003cbr\u003e\u003cbr\u003eI wanted a trading method that kept me on the opposite side of the losing public and gave me a more\nabsolute signal in picking tops and bottoms in the market. I also wanted an undiscovered method that the\ntrading masses hadn't overused. That eliminated moving averages, which got me short at bottoms and\nlong at tops, and Gann and Elliott methods, which pointed to a top or bottom after it occurred.\u003cbr\u003e\u003cbr\u003eWhat I found was the tick index, carried by most live intraday quote services, and I have found it to\naccurately forecast market tops and bottoms and indicate buy and sell levels. This method uses intraday\nuptick and downtick readings of the New York Stock Exchange (NYSE) to forecast tops and bottoms in\nthe Dow Jones Industrial Average (DJIA) and to generate buy and sell signals that span one to 10 days.\u003cbr\u003e\u003cbr\u003eUPTICKS AND DOWNTICKS\u003cbr\u003e\u003cbr\u003eThe tick index is the difference between the number of issues trading with the last trade higher (an\nuptick) from the previous price and issues trading with the last trade lower (a downtick) from the\nprevious price. For example, if exchange X has 500 issues trading on an uptick and 250 issues trading on\na downtick, the tick index would be +500 - 250 = +250.","brand":"store-traders-com","offers":[{"title":"Default Title","offer_id":52133830459761,"sku":"\\V09\\C06\\TOPSBOT.PDF","price":2.95,"currency_code":"USD","in_stock":true}],"thumbnail_url":"\/\/cdn.shopify.com\/s\/files\/1\/0900\/3843\/6209\/files\/unnamed_e1b9115b-7497-44e4-9581-3370e4fa8be0.jpg?v=1739653533"},{"product_id":"v09-c08-babybul-pdf","title":"V.9:8 (344-345): The Baby Bulge Begins by John Sweeney","description":"The Baby Bulge Begins by John Sweeney\u003cbr\u003e\u003cbr\u003eOur Technical Editor opines about the demographic effect the baby boomer generation is having on the stock market.\u003cbr\u003e\u003cbr\u003eIs 38% of the value in the market unaccountable? What could explain such a discrepancy? Goldman,\nSachs \u0026amp; Co. limited partner Barrie Wigmore (The Wall Street Journal , June 5, 1991) picked apart the\nmarket's advances in the 1980s but found that interest rates, higher earnings and \"overly optimistic\nearnings estimates\" couldn't account for more than 62% of the gains in that decade. Wigmore and\neconomic luminary Robert Shiller (of Yale University) both professed that they were puzzled:\n\"Something else was driving the market. It's something intangible.\"\u003cbr\u003e\u003cbr\u003eActually, it's the opening bars of the demographic effect. The baby boom is entering the investment age,\nwith all the qualities necessary to drive the markets higher: money, inexperience and hubris. The recently\nheralded \"return of the small investor\"? It's chickens to the plucking. (This time, they rationalize, they're\ngoing to be smart, use mutual funds and be protected by professional advice. Dream on.)","brand":"store-traders-com","offers":[{"title":"Default Title","offer_id":52133830820209,"sku":"\\V09\\C08\\BABYBUL.PDF","price":2.95,"currency_code":"USD","in_stock":true}],"thumbnail_url":"\/\/cdn.shopify.com\/s\/files\/1\/0900\/3843\/6209\/files\/unnamed_98a58c32-1b10-4379-bc5a-09bd09c54d3b.jpg?v=1739653549"},{"product_id":"v09-c12-sidebb-pdf","title":"V.9:12 (499-504): SIDEBAR: BUYS AND SELLS","description":"BUYS AND SELLS\u003cbr\u003e\u003cbr\u003eIn Figure 3a, the greatest buying opportunity occurs when price action becomes strong at a time that\nmany are doubters. Depicted are indicators of both price strength and investor sentiment. Relative and\nabsolute strength are indicators of price. When Merrill's relative strength line is rising, its stock price is\noutperforming the market. When Merrill's absolute strength line is rising, then Merrill's stock is behaving\nbetter than it typically does, given Merrill's beta and the current market action. (Beta measures a stock's\nsensitivity to the direction of the market.) Points P1 to P2 show price advancing to a peak in mid-1989.\nWhile relative strength was flat, absolute strength was declining, suggesting that the stock was\nresponding to the market's advance in a weaker-than-normal way. After the peak in price, profitable short\nselling occurred whenever the shorts make money, the technical underpinnings for a stock are\nconsidered weak. Toward the end of 1990, as price and relative strength sank to new lows at points P3 to\nP4 and R3 to R4, absolute strength turned up (points A3 to A4). The shaded area begins at a time where\nclearly price is strong, as both relative and absolute strength are trending upward. Doubters added fuel for\nthe advance, as the short interest ratio was relatively high. All the ingredients for a buying opportunity\nwere in place.","brand":"store-traders-com","offers":[{"title":"Default Title","offer_id":52133831541105,"sku":"\\V09\\C12\\SIDEBB.PDF","price":2.95,"currency_code":"USD","in_stock":true}],"thumbnail_url":"\/\/cdn.shopify.com\/s\/files\/1\/0900\/3843\/6209\/files\/unnamed_7d5e4396-17d7-49e9-9860-0627ba47d6bb.jpg?v=1739653573"},{"product_id":"v09-c02-sidebm-pdf","title":"V.9:2 (87-90): SIDEBAR: MUGEN: COMPUTATION OF MEMBERSHIP FUNCTION","description":"MUGEN: COMPUTATION OF MEMBERSHIP\nFUNCTION\u003cbr\u003e\u003cbr\u003eMembership functions can probably be computed with any plausible mathematical function suitable to\nthe occasion. In practice, however, many situations are well served by simple first- or second-order\nfunctions.","brand":"store-traders-com","offers":[{"title":"Default Title","offer_id":52133832229233,"sku":"\\V09\\C02\\SIDEBM.PDF","price":2.95,"currency_code":"USD","in_stock":true}],"thumbnail_url":"\/\/cdn.shopify.com\/s\/files\/1\/0900\/3843\/6209\/files\/unnamed_c8d90736-65c8-40c3-a25c-5e736590a70c.jpg?v=1739653592"}],"thumbnail_url":"\/\/cdn.shopify.com\/s\/files\/1\/0900\/3843\/6209\/collections\/volume-9-1991-18.gif?v=1739676805","url":"https:\/\/shop.traders.com\/collections\/articles-volume-9.oembed","provider":"Stocks \u0026 Commodities","version":"1.0","type":"link"}