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• Strength Figure by Alex Saitta

  ARTICLE SYNOPSIS ...Strength Figure by Alex Saitta Here's an indicator that captures the amount and the distance of price thrusts. Technicians measure the strength of a market trend by examining trading volume, open interest, or price momentum. Most who choose momentum graph the price above and a momentum line below. Figure 1 plots the Standard & Poor's 500 futures, and the difference between the most recent close and the close 15 days prior --the 15-day momentum line. In this case, the momentum was positive, so the price trend was up,but as the market rose, momentum fell. The divergence between the direction of...

AUTHOR: Alex SaittaDATE: OCT 2000SUBJECT: Indicators

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• Commodities And The Inflation Rate by Alex Saitta

  ARTICLE SYNOPSIS ...Commodities And The Inflation Rate by Alex Saitta Which individual commodities have the strongest coincidental relationship with the inflation rate? Successful traders need to keep an eye on commodity price changes to gain insight into the latest changes in the inflation rate and anticipate the next bond market move. You cannot rely on the monthly Consumer Price Index (CPI) report, since there is a considerable lag between the period when the data is collected and the date the report is released to the public. By the time you get it, it's too late. Here's a technique to identify the commodi...

AUTHOR: Alex SaittaDATE: JUL 2000

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• Of Gold And Bonds, Gold Is The Leader by Alex Saitta

  ARTICLE SYNOPSIS ...Of Gold And Bonds, Gold Is The Leader by Alex Saitta Does gold lead the bond market, or is it the other way around? Previously, we uncovered strong coincidental relationships between gold and the dollar, inflation, bonds and the CRB index. As bond traders, though, we are most interested in the relationship between gold and the bond market. Looking at the past 20 years of data (Figure 1), we noticed gold's reversals have led bond yield reversals. Looking beyond the peaks and valleys and considering all the data, does gold have a tendency to lead the bond market? To answer this question, we a...

AUTHOR: Alex SaittaDATE: MAY 1999

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• Treasury Bonds And Gold by Alex Saitta

  ARTICLE SYNOPSIS ...Treasury Bonds And Gold by Alex Saitta Intermarket analysis, the comparison of price relationships between two different markets, is a valuable tool for traders and investors. Regular news reports often account for one market's trend for the day as reacting to the change in another. Interest rates and gold have had such a relationship to keep an eye on over the years, but the gold market has been prices fall because bond participants fear signs of inflation. Using that logic, when gold falls significantly, it is a sign that inflation is lessening, so bonds rise at that time (Figures 1 and 2)...

AUTHOR: Alex SaittaDATE: FEB 1999SUBJECT: Intermarket Analysis

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As The Bond Turns by Alex Saitta

AUTHOR: Alex SaittaDATE: DEC 1999SUBJECT: Trading Techniques

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• Is Gold Still a Barometer by Alex Saitta

  ARTICLE SYNOPSIS ...Is the gold market still an indicator of other trends? Here's a look at the past relationships of gold to the dollar, the Consumer Price Index and the CRB. Analysts often cite intermarket relationships when touting a market's prospects. An analyst might point out that utility stocks have reached a new high, and since they lead interest rate instruments, the fixed-income market would follow. Or an analyst might observe that copper is down, and since copper is a key price component for inflation indices, lower copper prices is bullish for bonds. When you examine the historical data and compare...

AUTHOR: Alex SaittaDATE: OCT 1998SUBJECT: Intermarket Analysis

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• Reversal Formations: Predictive Power? by Alex Saitta

  ARTICLE SYNOPSIS ...Do classic chart formations such as the head-and-shoulders or the double-bottom/double-top hold up to close scrutiny? Here's a look. A few years ago, I read a Federal Reserve Bank report entitled "Head-and-shoulders: Not just a flaky pattern." The authors of the piece had rigorously tested the profitability of a trading strategy based on the head-and-shoulders pattern in the foreign exchange market. The results indicated the head-and-shoulders had some predictive power for the German mark and the yen. I was taken by the study's objective approach to what has always been looked upon as a subj...

AUTHOR: Alex SaittaDATE: NOV 1998SUBJECT: Basic Techniques

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• Break Faster Than Rally? by Alex Saitta

  ARTICLE SYNOPSIS ...Do markets decline in value at a faster pace than they rally? The question is put to the test using the Chicago Board of Trade Treasury bond futures contract. Nearly all market analysts agree that the bull market in bonds began in 1981, when the price of the Treasury bond futures contract bottomed at 55-05 (Figure 1). There is, however, an array of disagreement as to when or if the bull market ever ended. In my opinion, the bull market for bonds ended in October 1993, when the futures contract peaked at 122-06. The primary reason for my bearish view? Since the October 1993 peak, the Treasury ...

AUTHOR: Alex SaittaDATE: SEP 1997SUBJECT: New Techniques

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• Correction or Reversal? by Alex Saitta

  ARTICLE SYNOPSIS ...Markets trend. And within those trends are corrective phases, which in turn are followed by the trend resuming. At some point, the major market trend reverses. So what might be a clue to whether the current price action is a correction or a trend reversal? Here's one method to consider. After a market advance and the price drops below its moving average, technicians are faced with a question: Is the decline just a correction, or is it the beginning of a trend reversal? If, after the moving average cross, the technician decides it is indeed a correction (Figure 1), he'll prepare to buy support...

AUTHOR: Alex SaittaDATE: OCT 1997SUBJECT: New Techniques

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• Bonds, Price Momentum and Trends by Alex Saitta

  ARTICLE SYNOPSIS ...Bonds, Price Momentum and Trends by Alex Saitta A market trends, and then consolidates, before either resuming the trend or reversing. Is there any way that a technical trader can get a hint about which outcome, the reversal or the continuation, is more likely? This market analyst offers his method for finding out. One of the first guidelines technical traders learn is The trend is your friend. Then you begin to realize the trend is your friend -- until it reverses. At that point, it becomes someone else's friend and your enemy. So, soon thereafter you find yourself asking, Are there signs t...

AUTHOR: Alex SaittaDATE: APR 1997SUBJECT: Indicators

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• A Price- and Volume-Based System by Alex Saitta

  ARTICLE SYNOPSIS ...TRADING TECHNIQUES A Price- And Volume-Based System Traders often use moving averages of just price to signal trends. Here's a moving average system that uses price and volume for trading signals. by Alex Saitta N ot a month goes by that a trading magazine or technical analysis journal doesn't publish an article introducing a new and more sophisticated technical idea or tool. As a result, there's a widespread assumption that old ideas and simple tools are no longer applicable to today's markets - an erroneous assumption. The drive for ever-more sophisticated concepts and indicators notwit...

AUTHOR: Alex SaittaDATE: MAR 1996

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• V.14:6 (262-264) Employment As A Bond Market Forecast by Alex Saitta

  ARTICLE SYNOPSIS ...How good a barometer is the monthly US employment report for the bond market? One analyst decided to find out. By Alex Saitta The US employment report that the federal government releases on a monthly basis contains an assortment of data on many different sectors of the economy, so it is known as an excellent barometer of the prior month's economic activity. Market volatility supports the significance of this report. The day the report is released, the Treasury bond futures' trading range is larger than it is on the release dates of other economic reports. In the last eight years, the size of...

AUTHOR: Alex SaittaDATE: JUN 1996

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• Quantifying Percentage Retracements by Alex Saitta

  ARTICLE SYNOPSIS ...V. 14:2 (76-78): Quantifying Percentage Retracements by Alex Saitta Traders often look for retracements of a market trend to establish new positions with that trend. But how often and how far does a market retrace the prior move before continuing? For the answer, this market analyst examines the Treasury bond futures market to determine typical retracement behavior. When the market is in a trend, it often retraces a portion of the prior move before the trend resumes. When a correction begins and the market retraces a portion of the prior advance, traders who missed the previous advance ente...

AUTHOR: Alex SaittaDATE: FEB 1996SUBJECT: Trading Techniques

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• Comparing Technical and Fundamental Analysis by Alex Saitta

  ARTICLE SYNOPSIS ...NOVICE TRADER Comparing Technical And Fundamental Analyses by Alex Saitta Philosophically, technicians and fundamentalists appear to be at odds: One group studies underlying factors driving the market, while the other focuses on the market itself. Technical approaches count on the existence of price trends to make profitable strategies, but fundamentalists count on trends, too. Here, one market analyst reviews the differences and similarities between the two. If nothing else, fundamental and technical analysts agree on one thing: The trends of fundamental forces are the sole reason for ev...

AUTHOR: Alex SaittaDATE: SEP 1995

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• Trending on a Historical Basis by Alex Saitta

  ARTICLE SYNOPSIS ...V.13:08 (345-347): Trending on a Historical Basis by Alex Saitta The question is as old as technical analysis itself: Does the market trend? Here's a method to determine the degree to which markets trend historically. In addition, there's a comparison of various markets based on the observable degree of trend. In the pursuit of profit, most traders spend hours each day trying to forecast whether the market is about to trend upward or downward. However, some traders pursue their quest for profit in a different way. These traders are not concerned with the direction the market will move; rat...

AUTHOR: Alex SaittaDATE: AUG 1995

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• Range Breakout Trading in Treasury Bonds by Alex Saitta

  ARTICLE SYNOPSIS ...Range Breakout Trading in Treasury Bonds by Alex Saitta Markets are either trending or in a trading range marking time until the next trend. It follows, then, that a potential trading concept is to identify the trading range and wait for the new trend to start. Here's one method for identifying a trading range and the results of trading the breakout. As technicians, we've all been told numerous times to go with the breakout. But how many of us ever really think about the logic behind range breakouts and why breakouts are usually followed by prolonged trends? Familiarity with this logic is c...

AUTHOR: Alex SaittaDATE: APR 1995