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Article Archive For Thom Hartle
DownloadCueing Off Support And Resistance Levels by Thom Hartle
ARTICLE SYNOPSIS ...Cueing Off Support And Resistance Levels by Thom Hartle Tracking previous highs and lows and analyzing price action can provide clear indications of trend direction. Early in your trading career, you probably learned that you should buy at support and sell at resistance. Support is usually described as a previous point at which the market stopped going down, and resistance as the most recenthigh point at which the market stopped going up. A more definitive approach states that resistance is the previous week's high and support is the previous week's low. If you use trading signals for entry ...
Triangles And Trends by Thom Hartle
ARTICLE SYNOPSIS ...Triangles And T ends Building positions is an essential exploitation of a successful trade, and triangle formations can be key to doing so. The classic technical trader relies upon various chart formations for determining market tops, bottoms, and consolidations. Although the triangle chart formation can be a trend reversal or a consolidation, I want to show you how to use it as a continuation pattern,how to identify it as it develops,and how to trade it. What are triangles? They are simply sideways trading action, with the widest part of the correction occurring earliest in the development...
Gann Swings And Intraday Trading by Thom Hartle
ARTICLE SYNOPSIS ...Gann Swings And Intraday Trading Swing trading is one of the oldest technical methods in technical trading literature. Even though it's little used these days, this classic technique is hardly outmoded and can be useful in trading today's volatile stock market. To some, today's overheated stock market must seem like the land o' opportunity: just step right up and jump on board the train to make a profit. Unfortunately, some days the market looks more like a train wreck than a weekend trip to your favorite resort. In fact, the volatility in some stocks would make a seasoned soy-bean trader th...
Int.: How To Get Started In Electronic Day Trading: David Nassar by Thom Hartle
ARTICLE SYNOPSIS ...How To Get Started In Electronic Day Trading: David S. Nassar Each day, more and more traders are using computers for the direct buying and selling of stocks. Is there a difference among the myriad services available? We went to David Nassar, author of How To Get Started In Electronic Day Trading, to get the rundown on what is available for today's traders. STOCKS & COMMODITIES Editor Thom Hartle interviewed Nassar via phone on February 23, 1999, about the difference between online trading and electronic direct access trading, what to consider if you seriously want to daytrade, and more. Wit...
Interview: Tales From The Front: Robert Zellner by Thom Hartle
ARTICLE SYNOPSIS ...Tales From The Front: Robert Zellner Robert Zellner, whose career has ranged from academic to institutional trader to business manager before settling on full-time private trader, started off with his sights aimed on academia, despite a grandfather who was a speculator in the 1920s and 1930s. But it wasn't long before the family genes came into play and Zellner stepped into the trading arena. He has worked for Cook Industries; Drexel Burnham Lambert; and Citibank Futures, among other financial firms. STOCKS & COMMODITIES Editor Thom Hartle met Zellner when their careers overlapped at Drexel b...
Interview: Doug Fabian Of Fabian Investment Resources by Thom Hartle
ARTICLE SYNOPSIS ...Keeping Investing Simple Doug Fabian Of Fabian Investment ResourcesFor mutual fund investors, one of the bestknown newsletters is Fabian Investment Resources, previously known as Telephone Switch Newsletter. It was begun by financial planner Dick Fabian, whose 1976 book, How To Be Your Own Investment Counselor, triggered enough response for him to start the newsletter the following year. Since then, the newsletter has prospered, with Fabian's son, Doug, later picking up the reins and expanding its horizons. Editor Thom Hartle talked to Doug Fabian via telephone on March 24, 1999, asking him ab...
Interview: From The Pit To The PC: Lewis J. Borsellino by Thom Hartle
ARTICLE SYNOPSIS ...From The Pit To The PC Lewis J. Borsellino The current, never-before-seen bull market in stocks has led to tremendous growth in trading the Standard & Poor's 500 futures pits. One top S&P trader, Lewis Borsellino, has been a runner, a clerk, a broker, an independent trader, and now, a fund manager. Recently, Borsellino wrote about his life and time in the pits in The Day Trader: From The Pit To The PC. STOCKS & COMMODITIES Editor Thom Hartle interviewed Borsellino on April 21, 1999, asking him about, among other things, his strengths, his mistakes, the future of futures, and more. Did your t...
Interview: The Nature Of The Market Is Change: Bruce Kamich by Thom Hartle
ARTICLE SYNOPSIS ...The Nature Of The Market Is Change: Bruce Kamich Technicians follow numerous markets, and some specialize in specific areas, such as equities or fixed income. With the Treasury bond yields recently hitting lows that were unthinkable by most only a few years ago, we thought that talking to a specialist in this area would be apropos. Meet Bruce Kamich, who is senior vice president for research, development and management of the electronic financial information service MoneyWatch for McCarthy, Crisanti & Maffei, and currently, he's on the board for the Market Technicians Educational Foundation. ...
Interview: Trading Success As A Point Of Reference: Ari Kiev, M.D. by Thom Hartle
ARTICLE SYNOPSIS ...Trading Success As A Point Of Reference: Ari Kiev, M.D. Ari Kiev started out working with suicidal patients before going on to work with athletes and now as a trader's coach. He is a management consult-ant to several trading firms and is the author of numerous books, including the recent Trading To Win: The Psychology Of Mastering The Markets. STOCKS & COMMODITIES Editor Thom Hartle interviewed Kiev via telephone on November 24, 1998, asking him about working with traders, his new book and more. I argue that profitability isn't dependent on the market. Profitability is dependent on what the ...
Interview: Kevin Haggerty by Thom Hartle
ARTICLE SYNOPSIS ...A Guide To Conquering The Trading Markets - Kevin Haggerty Kevin Haggerty's career on Wall Street covers nearly 25 years and numerous responsibilities ranging from senior vice president and manager of equity trading at Fidelity Capital Markets to serving as a managing director of the Chicago Board Options Exchange. Now he's teamed up with Mark Boucher and Larry Connors, some other noted names in the business that STOCKS & COMMODITIES readers may recognize, to cofound a Website for traders called TRADEHARD.COM. S&C Editor Thom Hartle spoke to Haggerty on May 18, 1999, about topics ranging from...
Interview: The Holy Grail Of Trading Is Within Us All: Van K. Tharp by Thom Hartle
ARTICLE SYNOPSIS ...The Holy Grail Of Trading Is Within Us All: Van K. Tharp, Ph.D. Psychologist and trading coach Van K. Tharp is the president of the International Institute of Trading Mastery, Inc. He has spent the last 15 years working with more than 4,000 traders, and through this work, he has managed to identify themes and characteristics that are key among successful traders. He's developed a home study course on the trading process, but his recent work has to do with the psychology of system development. He has written a book titled Trade Your Way To Financial Freedom, in which he analyzes how great trad...
Jurik Indicators And Data Preprocessors
Henry Pruden of Golden State University by Thom Hartle
ARTICLE SYNOPSIS ...Henry Pruden, who heads up Golden Gate University's Institute of Technical Market Analysis, mixes the classic technical methods with the new and promising ones. S&C spoke with him to find out what he has to say about technical analysis making inroads on respectability in academia. How did you first become interested in technical analysis? In 1974, while I was teaching at the University of Texas at Austin, I invested in the stock market. Unfortunately, I lost more money in my portfolio that year than I was earning. So I looked into the study of securities and realized something: My colleague...
The Power of Knowledge: James O'Shaughessy by Thom Hartle
ARTICLE SYNOPSIS ...Money manager and author James O'Shaughnessy is best known for the astute research presented in his books. We spoke to him about what the individual investor should focus on. So how did you start out, anyway? I started out like everyone else, wanting to know why a stock went up or down. I would watch with surprise when the price of story stocks, where the prospects for the company was the best thing since sliced bread, would tumble, despite the glowing recommendations for it. At the same time, I would see stodgy, old-line industrial companies such as Goodyear Tire rallying several hundred pe...
Be Rich or Be Right? CTCR's Courtney Smith by Thom Hartle
ARTICLE SYNOPSIS ...Trader Courtney Smith has added publisher and editor of Commodity Traders Consumer Report to his long list of accomplishments. S&C spoke with him on why traders lose and how to change that. So when did you start in the business? I started trading in the early 1970s, around the time that the International Monetary Market started up on the Chicago Mercantile Exchange (CME). In fact, some of my early trades involved making a market in currency spreads. I was one of the few people looking at the carrying charges in the currencies, and I made a market from off the floor. It was a bit tough beca...
About Managed Futures And Commodity . . . Gary Spitz by Thom Hartle
ARTICLE SYNOPSIS ...About Managed Futures And Commodity Trading Advisors -- Interview with Gary Spitz by Thom Hartle Gary Spitz, principal of CTA Research Corp., recognized early on the value of professional money managers in the futures markets as an asset class for investors. Further research led him to develop an index to track the performance of Commodity Trading Advisors in ways that reveal those managers who are consistent performers. Stocks & Commodities Editor Thom Hartle interviewed Spitz via telephone on February 19, 1998, about his views on what investors should look for when considering this asset cl...
Trading And Control: Walter Bressert by Thom Hartle
ARTICLE SYNOPSIS ...Trading And Control: Walter Bressert by Thom Hartle For commodity and futures traders, the technique of using cycles as a trading strategy will undoubtedly bring to mind trader and analyst Walter Bressert. Bressert, who has been in the trading industry for nearly 30 years, was the publisher and editor of the well-regarded newsletter HAL Commodity Cycles for 12 years. In addition, he wrote The Power Of Oscillator/Cycle Combinations and is today the president of The Bressert Group. His work and techniques are now available in the Cycle Trader software. Stocks & Commodities Editor Thom Hartle sp...
Michael Sheimo On Dow Theory by Thom Hartle
ARTICLE SYNOPSIS ...Interview: Michael Sheimo On Dow Theory by Thom Hartle Take a look around: Technology is changing the face of trading and investing before your very eyes. Computers, information acquisition and trading are all getting faster and faster, sometimes at breath-taking speeds. The world of tomorrow is here today, in the form of technology. Is there still room for the classic approaches, such as Dow theory? To find out, Stocks & Commodities Editor Thom Hartle spoke with Michael Sheimo, author of Cashing In On The Dow, Stock Market Rules, and Dow Theory Redux, by phone on March 24, 1998. Here's what ...
Truth In Futures: John Hill by Thom Hartle
ARTICLE SYNOPSIS ...Truth In Futures: John Hill John Hill started out in the business of trading commodities in a most remarkable way when he managed to run $1,000 up to $80,000 in a matter of three months - and then managed to lose all but $5,000 in a single day. Some traders would hang up their charts after that, but Hill was determined to understand what he'd done wrong. It took years of study, but he figured it out. STOCKS & COMMODITIES Editor Thom Hartle interviewed Hill via telephone on April 23, 1998, asking him about Futures Truth, the publication he has produced since the 1970s; why novices could benefi...
Channel Analysis by Thom Hartle
ARTICLE SYNOPSIS ...Channel Analysis by Thom Hartle A market does not move in a straight line; instead, its movement travels across the chart in peaks and valleys, forming a channel in the direction of the trend. Early identification of the channels can give you important information, including that the trend has changed direction, what the profit objectives are and risk points. As computers and technical analysis software become more and more sophisticated, there is an increasing reliance by traders on using indicators for trading signals. This focus on using technical indicators for developing trading systems...
On Synergy and Strategy: Tom Bierovic Of Synergy Futures by Thom Hartle
ARTICLE SYNOPSIS ...On Synergy and Strategy: Tom Bierovic Of Synergy Futures by Thom Hartle Thomas Bierovic is president of Synergy Futures, a research, trading, and education company. He also writes Synergy Fax, a daily advisory service for futures traders, and he wrote the well-regarded trading manual A Synergetic Approach to Profitable Trading. His specialty involves ""synergizing"" a variety of trend-following indicators, directional-movement indicators, momentum oscillators, Fibonacci retracements, and chart patterns to create low-risk/high-reward trading methods. Stocks & Commodities Editor Thom Hartle spo...
Charles White Of Tucson Asset Management by Thom Hartle
ARTICLE SYNOPSIS ...Charles White Of Tucson Asset Management by Thom Hartle Charles White's career has ranged broadly from fixed-income portfolio manager to Commodity Trading Advisor. Today, as one of the three principals of Tucson Asset Management, White is doing it all as he advises institutional fixed-income managers as well as maintaining three managed-futures programs, with approximately $50 million under management. Stocks & Commodities Editor Thom Hartle interviewed White via telephone on November 18, 1997, asking him about issues that are key to developing trading systems as well as what investors should...
The Global Trend: Mark Boucher by Thom Hartle
ARTICLE SYNOPSIS ...When S&C first spoke to hedge fund manager Mark Boucher in 1996, he shared some of his techniques for analyzing the economy, picking stocks, and money management. See what he says this time. Refresh our memories with a bit of your history. Sure. I started trading stocks and commodities when I was in high school. My father died when I was nine, and he left me a trust fund. The manager of my trust was looking after my college fund. Unfortunately, the stock market fell apart starting in 1973 and the bank managing my trust stayed 100% invested during the bear market. My account lost about 90% o...
On The Bull Market Of the Century: Louise Yamada by Thom Hartle
ARTICLE SYNOPSIS ...The bull market of the end of the 20th century has been going on for some time now. How did this happen, and how much longer is it going to last? To get some answers, we turned to Louise Yamada of Salomon Smith Barney, whose recent book, Market Magic: Riding The Greatest Bull Market Of The Century, shed some light on the situation. Yamada, who is senior technical analyst and director of research at Salomon Smith Barney, is responsible for sector analysis of the US and global markets. Stocks & Commodities Editor Thom Hartle talked to Yamada via phone on May 26, 1998, asking her what her long-te...
Asoka Selvarajah Of Rabobank International by Thom Hartle
ARTICLE SYNOPSIS ...Asoka Selvarajah Of Rabobank International by Thom Hartle According to Asoka Selvarajah, markets do make sense ultimately, but not in a way that most people imagine. To understand the markets, according to Selvarajah, requires a dash of Pythagorean theory, a smidgen of Newtonian physics, and even some chaos. Selvarajah, who works for Rabobank International, one of the largest banks in the world and one of the few European banks with a triple-A rating, was interviewed by Stocks & Commodities Editor Thom Hartle via E-mail over a period of several weeks in January 1998, discussing systematic tra...
Steve Shellans of MoniResearch Newsletter by Thom Hartle
ARTICLE SYNOPSIS ...Computers have managed to insinuate themselves into our lives these days, but not many of us remember the early days. MoniResearch Newsletter publisher Steve Shellans was a pioneer of sorts in the industry; he started to work with computers in earnest 40 years ago, before manned space flight had even been achieved. By the early 1970s, he was a pioneer of another sort when he moved out of New York City, the financial center of the nation, across the country, and there eventually building the beginnings of the market timer database that would be the underpinning of The MoniResearch Newsletter. S...
Analysis in Action: Tushar Chande by Thom Hartle
ARTICLE SYNOPSIS ...Tushar S. Chande is a familiar name to regular Stocks & Commodities readers, as he's contributed any number of solid, well-researched and thoughtful technical articles over the years and has been a Contributing Editor for the past few. His background, like so many others, wasn't financial when he started out; he started out as an engineer before being bit by the trading bug before eventually ending up as a Commodity Trading Advisor in Chicago. Having evolved into a money manager, Chande has keen insight into trading system development. To conduct this interview, S&C Editor Thom Hartle and Chan...
V.15:11 (510-515) Interview Bernie Schaeffer by Thom Hartle
ARTICLE SYNOPSIS ...Bernie Schaeffer, president of the Investment Research Institute, is best known as the senior editor of The Option Advisor, the largest-circulation options newsletter in the US. He is also senior editor of Fund Profit Alert and Schaeffer's Research Review newsletters. Schaeffer made the Dick Davis Hall of Fame for being bearish ahead of the stock market correction in 1987, and since then, he has been steadfastly and correctly bullish, in large part to his use of sentiment-based indicators that helped him recently to garner the Market Technicians Association's Best of the Best award in sentimen...
V.15:11 (477-482) Using Fibonacci Ratios and Momentum by Thom Hartle
ARTICLE SYNOPSIS ...Don't buy it here, but wait for a pullback. Are you familiar with that piece of sage advice? Or what about ""I would wait and sell on a bounce""? What does this really mean? Where and when do you act? Here's one technique for calculating retracement levels using that tried-and-true favorite Fibonacci ratios, as well as using momentum to define the trend. Markets trend in a zigzag manner: rallying, leveling off, and surging again, only to be hit by a wave of profit-taking before settling into a trading range, awaiting the next reason to advance or retreat. This activity carries on in the gen...
Searching for Clues with Jay Kaeppel by Thom Hartle
ARTICLE SYNOPSIS ...Searching for Clues with Jay Kaeppel by Thom Hartle Devising and implementing a strategy is the key to successful trading, according to Jay Kaeppel, director of market research for Essex Trading Co., Ltd. Stocks & Commodities Editor Thom Hartle spoke with Kaeppel via phone on February 18, 1997, to inquire about his favorite techniques for investing in the stock market, trading futures and options. Q: Let's start with a little history. A: Okay. My first job, after I finished college, was with an oil company as an accountant. At the same time, I actively followed the markets on the side. Q:...
Alex Saitta of Salomon Brothers by Thom Hartle
ARTICLE SYNOPSIS ...Alex Saitta of Salomon Brothers by Thom Hartle Seasoned equity traders know that interest rates are a key force behind the direction of the stock market. The term ""interest rates,"" of course, is really a catch-all phrase for a group of markets that professional traders refer to as fixed income, and the most common group of those is the Treasury bond market. So what are some features that any technically based trader or investor should know about the workings of the bond market? To find out, Stocks & Commodities Editor Thom Hartle spoke with Alex Saitta, technical analyst and vice president ...
On the Aerodynamic Trader: Constance Brown by Thom Hartle
ARTICLE SYNOPSIS ...On the Aerodynamic Trader: Constance Brown by Thom Hartle Aerodynamic may seem like a peculiar description for a trader, considering what the word brings to mind at first glance: smooth and sleek, streamlined to minimize resistance. And yet, think about it. Successful traders are mentally streamlined. Winning traders display minimal emotional resistance to a high-risk environment, only trusting their skills to trade. This focused mental state is comparable to those of top athletes who go into head-to-head competition concentrating on their goal, free of any excess mental baggage that could we...
Contextual Trader Larry Williams by Thom Hartle
ARTICLE SYNOPSIS ...In the arena of technical analysis, it's hard to imagine not ever having heard about Larry Williams, well known as trader, author, newletter editor and money manager. Think of it -- virtually every technical-based software has some of his technical indicators. Despite all that, surprisingly, Williams is not as fond of technical analysis as you might expect. Why? We found out the answer when STOCKS & COMMODITIES Editor Thom Hartle spoke to Williams via phone on April 23, 1997, discussing Williams's views on technical analysis, money management and other topics. When did you first start trading?...
Mark Douglas And The Disciplined Trader by Thom Hartle
ARTICLE SYNOPSIS ...Interview: Mark Douglas And The Disciplined Trader by Thom Hartle The best teacher is experience, and from his experiences as a trader and a broker, Mark Douglas, consultant with his own firm, Trading Behavior Dynamics, and author of The Disciplined Trader: Developing Winning Attitudes, has experienced the gamut of trading emotions. From observing his and other people's emotional states, Douglas has developed strategies to help traders do what most professionals will tell you is the hardest part of trading - using your head. Stocks & Commodities Editor Thom Hartle spoke with Douglas via telep...
Ralph Acampora of Prudential Securities by Thom Hartle
ARTICLE SYNOPSIS ...Interview: Ralph Acampora of Prudential Securities by Thom Hartle In the decades that technical analysis has been rising in prominence, few have been as outspoken as Ralph J. Acampora, CMT, first vice president with Prudential Securities. Acampora has his roots firmly in the discipline. He's been a technician for three decades, he's a regular panelist and technician on the popular television show Wall $treet Week with Louis Rukeyser and not only that, he's a cofounder of the Market Technicians Association. In 1996, he won a place on the second team in the Institutional Investor All-America Re...
On the Fundamentals of Technical Analysis Andrew Lo by Thom Hartle
ARTICLE SYNOPSIS ...Andrew Lo, Harris & Harris Group Professor of Finance at the Massachusetts Institute of Technology's (MIT) Sloan School of Management, director of MIT's Laboratory for Financial Engineering and founder of Sloan's Track in Financial Engineering, is a radical of sorts because of his frank and open interest in technical analysis. Further, he's an academic who's perfectly willing to admit that technicians are often more open-minded about the markets than the academics who are his peers. But he'll also tell you that technicians are getting too far away from the fundamentals of technical analysis, a...
The Systematic Trader: Richard Saidenberg by Thom Hartle
ARTICLE SYNOPSIS ...The Systematic Trader - Richard Saidenberg How many times have you heard that developing your own rules and following them is the way to trade? By now, probably plenty. It's not just idle speculation, either; Richard Saidenberg, a Commodities Trading Advisor and independent futures trader, discovered that the steps to successful trading were based on developing a systematic approach to trading. STOCKS & COMMODITIES Editor Thom Hartle interviewed Saidenberg via phone on May 20, 1997, and talked to him about system design, the pitfalls to avoid while developing a system as well as other topics....
John Bollinger and Group Analysis by Thom Hartle
ARTICLE SYNOPSIS ...Interview: John Bollinger and Group Analysis by Thom Hartle John Bollinger, who is best known for his work on trading bands, also has other accomplishments to his credit as money manager, publisher and market analyst. Of late he's been looking at some new concepts: group analysis, which isn't a new concept at all, and fuzzy logic as applied to the markets, which is. To find out more, Stocks & Commodities Editor Thom Hartle decided to speak with Bollinger on January 23, 1997, via telephone, on topics ranging from group sector analysis to using fuzzy logic in market analysis. Q: John, you're a...
Interview Howard Abell of Innergame Partners by Thom Hartle
ARTICLE SYNOPSIS ...Interview Howard Abell of Innergame Partners by Thom Hartle With nearly 30 years' experience as a trader and broker in the commodities pits, money manager and author Howard Abell has the bead on what it takes to trade. Abell, co-author with Bob Kopell of The Innergame of Trading and The Outer Game of Trading, and whose own Day Trader's Advantage has just been published, uses technical analysis with the weather eye of experience. He also writes the IMPR Market Letter, published for professional and institutional traders. Stocks & Commodities interviewed Abell on topics such as how Abell picks ...
Modeling the Markets with Nelson Freeburg by Thom Hartle
ARTICLE SYNOPSIS ...INTERVIEW - Modeling the Markets with Nelson Freeburg by Thom Hartle I never could claim that I was a very good technical trader using conventional chart patterns. This absence of positive results in my own trading, combined with my academic background in quantitative modeling, led me, finally, in the direction of system development.? Nelson Freeburg Nelson Freeburg, editor and publisher of market research newsletter Formula Research, has focused his energies on the development of systematic approaches to participating in the stock, bond and futures markets. What are the key issues and steps...
On the Principle of Parsimony: James O'Shaughnessy by Thom Hartle
ARTICLE SYNOPSIS ...On the Principle of Parsimony James O'Shaughnessy by Thom Hartle I wanted to understand why certain stocks went up and why others went down. I went looking for literature that would explain what I could see happening in the marketplace. I found that a lot of the available material was anecdotal. Where was the scientific methodology to support the claims? I was surprised that there wasn't much of that type of research available. ? James O'Shaughnessy Money manager and author James O'Shaughnessy, founder and president of O'Shaughnessy Capital Management, has been called a ""statistical guru"" ...
Living the Dream: Trader Gary Smith by Thom Hartle
ARTICLE SYNOPSIS ...Living The Dream: Trader Gary Smith I always dreamed of trading for a living and I finally have achieved that, but never in the way I had imagined. I always envisioned myself as one of these Jesse Livermore-tape reader types, but it's been very different. - Gary Smith In this day and age of computers and high technology, trader Gary Smith is certainly an anomaly, as he uses no computer, disapproves of mechanical systems and simply uses the data off CNBC with which to trade. How does he do it? How has he done it? His recently published book, Live the Dream By Profitably Day Trading Stock Futu...
Top Down Investing with S&P's Sam Stovall by Thom Hartle
ARTICLE SYNOPSIS ...INTERVIEW Top Down Investing with S&P's Sam Stovall Some wander onto Wall Street by mistake, while others seem destined to find their way there. Sam Stovall is a member of Standard & Poor's Investment Policy Committee, editor of S&P's Industry Reports and author of Standard & Poor's Guide to Sector Investing. Stovall spoke with STOCKS & COMMODITIES Editor Thom Hartle on December 20, 1995, via telephone interview about market cycles, sector investing and relative strength, among other topics. I had all this data on industry indices, and anybody can find out when economic constractions and ex...
V.14:6(271-278: Jim Bianco Of Arbor Trading by Thom Hartle
ARTICLE SYNOPSIS ...There is no shortage of market analysts in this world, but as Jim Bianco, the director of research for Arbor Trading, can tell you, if you want to make a difference you have to look at things with a different vantage point. Bianco's career in the markets began in equity research, but eventually, he changed his focus to the fixed-income arena. Stocks & Commodities talked with Bianco on why his interest shifted from stocks to bonds, why bonds are out of fashion at the moment, and how he tracks the players that he thinks make the real difference on where interest rates are headed. By Thom Hartle ...
Interview Richard Mogey by Thom Hartle
ARTICLE SYNOPSIS ...Markets ebb and flow, rise and fall, come and go in short, they appear to be cyclical. To learn more about using cycles, there is probably no better source than Richard Mogey, the executive director of the Foundation for the Study of Cycles. Stocks & Commodities spoke with Mogey about the Foundation's research into the influence of cycles on the stock market, commodities and bond markets. By Thom Hartle Markets ebb and flow, rise and fall, come and go - in short, they appear to be cyclical. To learn more about using cycles, there is probably no better source than Richard Mogey, the executive ...
Robert R. Prechter Jr. on the Elliott Wave Principle by Thom Hartle
ARTICLE SYNOPSIS ...V14:1 (37-42): Interview: Robert R. Prechter Jr. on the Elliott Wave Principle by Thom Hartle It's inevitable: Anyone who enters into the realm of technical analysis runs into a reference to the Elliott Wave Principle sooner or later. Whether you're an adherent or a skeptic, the Elliott wave is certainly one of the best-known methods by which to analyze the markets. Robert Prechter, who is considered to be the world's leading authority on the Elliott Wave Principle, is president of market forecasting and publishing firm Elliott Wave International and is also the author of a number of books on...
Sidebar: The Elliott Wave by Thom Hartle
ARTICLE SYNOPSIS ...V.14:1 (43): Sidebar: The Elliott Wave by Thom Hartle The Elliott wave principle is a method for classifying and forecasting market movement. The basic tenet is that markets move in a five-wave pattern in the direction of the trend. Once the five waves have been completed, the market will move counter to the trend in a three-wave pattern. For example, in Figure 1 the trend is up and there are five waves labeled waves 1, 2, 3, 4 and 5. Waves 1, 3 and 5 are called impulse waves. Waves 2 and 4 are corrective waves, moving counter to the preceding waves. Once a five-wave movement is complete, the...
Options Strategist Lawrence G. McMillan by Thom Hartle
ARTICLE SYNOPSIS ...INTERVIEW: Options As A Strategic Investment I pretty much determined that it was hard to predict stock prices, and of course, back in 1973 and 1974, it was a bear market. Options were a good vehicle for me to work with because of their advantages, like shorting a stock, and that fit in well with the way I thought about things.-Lawrence McMillan Options are a part of general financial strategy that at once draws and repels market participants. It's also a strategy that ironically you've basically got to lose money at in order to understand. So how do you learn more about it? It helps if you'...
Author and Analyst John Murphy by Thom Hartle
ARTICLE SYNOPSIS ...Author and Analyst John Murpy by Thom Hartle John Murphy, a veteran of nearly 30 years in the equities and futures markets, is the technical analyst for CNBC television, publisher of the ""Futures Trends and Intermarket Analysis"" newsletter and author of such classics in the field as Technical Analysis of the Futures Market and Intermarket Technical Analysis, and his newest work, The Visual Investor, promises to be comparably memorable. Most recently, he's also cofounder of MurphyMorris Inc., a joint venture to develop multimedia software for investors interested in technical analysis. With ...
On the Intuitive Trader: Robert Koppel by Thom Hartle
ARTICLE SYNOPSIS ...Phenomenology and existentialism and trading? Oh, my! Nothing in Robert Koppel's background as a philosophy academic could have given the slightest clue that he would end up as a floor trader for 17 years before giving that up for yet another career using the insights of his previous two. Stocks & Commodities interviewed Koppel, who is now a proprietary trader with Innergame Partners, on topics such as how traders see their own versions of reality and the importance of developing a trading plan that is consistent with your personality. By Thom Hartle When did you first start trading? I began...
The Market Facilitation Index by Thom Hartle
ARTICLE SYNOPSIS ...Volume, one of the key elements in technical analysis, is used to analyze the power behind a trend. Heavy volume days may indicate a strong trend, while light volume days could indicate the lack of a trend. Here's a method to connect volume and price movement to quantify price activity. By Thom Hartle In Trading Chaos, Bill Williams describes a unique way to combine price action and volume. The technique offers a perspective of the current state of the market based on this relationship between price movement and volume. For example, heavy volume may be signaling a trend, but not always, as in...
Learning Through Trial and Error: Mark Boucher by Thom Hartle
ARTICLE SYNOPSIS ...Learning Through Trial And Error - Mark Boucher I started off totally technically based, opposite from what investors normally start off with. When I started, there was a lot more material on technical analysis than I could find on fundamental analysis. Most of it wasn't very good, but I liked technical analysis because you could test it. - Mark Boucher Hedge fund manager Mark Boucher would be the first person to tell you that you have to have control of your own investments. And of course, once you do have control of your own investments, how much more you have to learn about them. STOCKS &...
New Market Wizard Robert Krausz by Thom Hartle
ARTICLE SYNOPSIS ...INTERVIEW Trading with the Conscious and Subconscious Minds: New Market Wizard Robert Krausz by Thom Hartle Robert Krausz, who was featured in Jack Schwager's The New Market Wizards, is many things: He is a trader, a student of the market, and a practicing hypnotherapist as well as a special investment advisor to the European Bank for Reconstruction and Development. With that background in mind, STOCKS & COMMODITIES Editor Thom Hartle spoke with Krausz on June 20, 1995, via a telephone interview about the steps to successful trading, the role of the subconscious for traders, and other topics...
Andrew Addison of the Addison Report by Thom Hartle
ARTICLE SYNOPSIS ...INTERVIEW Simplicity for Simplicity's Sake: Andrew Addison Of The Addison Report by Thom Hartle In this increasingly complicated world, it's a comfort to hear that indicators don't have to be complicated to work well, as Andrew Addison of The Addison Report will tell you. Addison, who edits and publishes the newsletter, which is aimed at individual investors and stockbrokers, uses his law-school training to boil down what's important and eliminate the peripherals - a handy thing for those who subscribe to the Report, as well as The Institutional View, his publication for professional fund man...
Interview: Money Manager Laurence A. Connors by Thom Hartle
ARTICLE SYNOPSIS ...Interview: Money Manager Laurence Connors by Thom Hartle What makes a trader a winner? It's hard to say. Professional trader Laurence A. Connors, who is the co-author of ""Investment Secrets of a Hedge Fund Manager"" and the president of money managers Connors, Bassett & Associates, thinks it's all a matter of finding a personal method that works for each individual. STOCKS & COMMODITIES Editor Thom Hartle conducted the interview with Connors on August 18, 1995, via telephone, and asked him, among other topics, about trading news reversals, why he likes to use average directional movement (AD...
Exploring the Science of Technical Analysis: Thomas R. DeMark by Thom Hartle
ARTICLE SYNOPSIS ...Interview: Thomas R. DeMark by Thom Hartle Thomas R. DeMark has been called ""the ultimate indicator and systems guy"" with the publication of his well-received book, The New Science of Technical Analysis. Who is he and what has he done that deserves such accolades? Stocks & Commodities interviewed DeMark about his trading philosophies and how he explored the frontiers of technical analysis using basic techniques. Q: When did you first get interested in the markets? A: I first got interested when I was a junior in college and a professor I admired introduced me to the markets. Then, after ...
Interview: John Sosnowy of SIMCO by Thom Hartle
ARTICLE SYNOPSIS ...Interview: John Sosnowy of SIMCO by Thom Hartle There seems to be a connection between engineering and investing. Like Jack Hutson, the publisher of Stocks & Commodities, John Sosnowy of the Sosnowy Investment Management Co. (SIMCO), Cameron, TX, was an engineer before he turned to the world of finance. He changed careers in 1969, leaving the engineering field to work as a stockbroker for a major brokerage firm before starting up his own investment advisory concern in 1984. We interviewed John Sosnowy, covering the concept of tactical asset allocation, how to design a market model and what in...
Perry Kaufman On Market Analysis by Thom Hartle
ARTICLE SYNOPSIS ...V13:06: (260-268): Perry Kaufman On Market Analysis by Thom Hartle Perry Kaufman began his career in the field of trading and market research in 1971. Since then, he has been a money manager, consultant and author of six books, including the popular Commodity Trading Systems and Methods. His most recent book, Smarter Trading, presents his perspective of the key issues in trading and designing systems. Today, he writes and edits the quarterly report ""Kaufman on Market Analysis,"" which he publishes from his farm in Vermont. STOCKS & COMMODITIES Editor Thom Hartle interviewed Perry Kaufman via...
SIDEBAR: Cups and caps by Thom Hartle
ARTICLE SYNOPSIS ...V.13:07 (311): SIDEBAR: Cups and caps by Thom Hartle Cup and cap patterns are technical formations used to signal short-term trades. The cup pattern is the basis for a sell signal when the instrument being traded is in an uptrend, while if the instrument is trading in a downtrend, then the cap pattern is the setup for a buy signal. First, the direction of the trend is identified, and then the cup and cap patterns are used for the trading signals. The trend is determined by using a pattern called the three-bar net line. Before discussing the cup and cap formations, let's look at how the three...
Teacher, Trader Still Teaching: Joseph Stowell by Thom Hartle
ARTICLE SYNOPSIS ...V.13:07 (304-310): Teacher, Trader Still Teaching: Joseph Stowell by Thom Hartle Many STOCKS & COMMODITIES readers dream of trading for a living; they fantasize about giving up their humdrum day-to-day job and focusing on the opportunities in leveraged markets such as futures. But as everyone knows, dreams and realities are usually far apart. Can it be done? Can you be an overnight success? Meet Joseph Stowell, a former schoolteacher who patiently worked at trading for more than 20 years before realizing his dream of trading for a living. Stowell spoke to S&C Editor Thom Hartle on April 14, 1...
Quantifying Your Markets by Thom Hartle
ARTICLE SYNOPSIS ...Quantifying Your Markets by Thom Hartle After you've gained some experience with trading, you'll begin to notice that the market you trade has some typical characteristics. Have you ever considered quantifying them? Here are some ideas on the subject. Buy low. Sell high. Limit your losses. These are all tried-and-true trading axioms, all often stated but rarely quantified. So what does ""low"" or ""high"" mean ? What about that old chestnut, ""limiting your losses""? Are there really ways to intelligently limit your losses? Think about this: Experts recommend that you place stop-loss orders...
Avoiding Risk: Jerry Wagner, Fund Timer by Thom Hartle
ARTICLE SYNOPSIS ...Avoiding Risk: Jerry Wagner, Fund Timer by Thom Hartle Jerry Wagner, president of Flexible Plan Investments, Ltd., of Bloomfield Hills, MI, currently has approximately $200 million under management. His firm was the top-ranked market timer for the last seven years in the MoniResearch newsletter's 1993 annual survey of market timer performance. He is a founding member of the Society of Asset Allocators and Fund Timers (SAAFTI), a nonprofit trade association of registered investment advisory firms that manage client assets with market timing. Stocks & Commodities Editor Thom Hartle interviewed ...
Relative Dividend Yield And Technical Analysis by Thom Hartle
ARTICLE SYNOPSIS ...Relative Dividend Yield And Technical Analysis by Thom Hartle To trade the stock market effectively, you need a plan to pick out the stock that could outperform others. Here's an example of a plan for trading that uses a stock's relative yield to the broad market and technical analysis. Trading stocks for short-term or long-term investing is similar to playing a very competitive game. To be successful, you have to have a game plan, and the first step in the game plan is to have a decision screen for selecting stocks. The universe of stocks from which you have to choose is very large and you ...
Mary Pugh of Pugh Capital Management by Thom Hartle
ARTICLE SYNOPSIS ...Mary Pugh of Pugh Capital Management by Thom Hartle The year 1994 will be known for the debacle in the derivatives markets. But what are these instruments that seem to have left a number of money managers holding the proverbial bag? To answer this question and others, we spoke to Mary Pugh, former senior vice president of Washington Mutual Savings Bank and now a fixed-income money manager in Seattle, WA. We spoke to Pugh about the mortgage-backed securities market, how it works, what the instruments derived from mortgages are all about and more. Q: Mary, let's start with your background. A...
Four Decades with Joe Ross by Thom Hartle
ARTICLE SYNOPSIS ...Interview: Four Decades With Joe Ross by Thom Hartle Planning ahead, being mentally tough, being physically fit and knowing why you're doing what you do is very important. Don't just throw yourself at the market. You go in when it's the right time to go in. You look for an opportunity and even if you're wrong in your timing by a little, you don't give up. You go back and try it again. -- Joe Ross There's nothing like a little perspective to give insight - especially when that perspective comes in the form of trading for nearly four decades. Trader Joe Ross is one of a rare breed of trader, o...
The Nature of Risk: Justin Mamis and the Meaning of Life by Thom Hartle
ARTICLE SYNOPSIS ...V.13:08 (359-365): The Nature of Risk: Justin Mamis and the Meaning of Life by Thom Hartle Looking back on decades of market activity can give anyone a certain perspective, and Justin Mamis, who writes the Mamis Letter, a newsletter for Hancock Institutional Equity Services that is a joint venture of Tucker Anthony and Sutro & Co., certainly has the experience to speak about. He became interested in the stock market in the post-Korean War period, and in the ensuing four decades has seen tops and bottoms, been an executive at the New York Stock Exchange (NYSE), worked in a specialist firm, tr...
Using Value and Technical Analysis by Thom Hartle
ARTICLE SYNOPSIS ...V.13:08 (332-336): Using Value and Technical Analysis by Thom Hartle There are various ways to select what stocks to trade. Here's a method that combines fundamental value and technical analysis as a way to select a stock, and a real-world trading situation on which it was applied. Every trader has a limited amount of capital to put to work in a sea of stocks. The trader, much like a fisherman, casts a net over the water, culling for the keepers and discarding the little ones. In trading, the technique is referred to as screening , creating a list of stocks that qualify for further study a...
Charles D. Kirkpatrick II of Kirkpatrick & Co. by Thom Hartle
ARTICLE SYNOPSIS ...Interview: Charles D. Kirkpatrick II of Kirkpatrick & Co. by Thom Hartle Charles Kirkpatrick II is not only a market researcher and money manager, but he also holds the distinction of being the first recipient of the Charles H. Dow Award for technical analysts. This award, which is cosponsored by Barron's, the Market Technicians Association (MTA) and Dow Jones Telerate, is based on the best article submitted to the MTA. Stocks & Commodities spoke with Kirkpatrick about the research that led him to his award-winning theories, how he selects stocks, his thoughts on risk management and more. Q...
Measuring Linkage by Thom Hartle
ARTICLE SYNOPSIS ...Measuring Linkage by Thom Hartle Seasoned traders know that relationships exist between markets. In theory, if fundamentals move one market in one direction, then another market may also move in the same direction or show a propensity to move in the opposite direction. These intermarket relationships are often referred to as linked markets. Can traders use this information? Indeed they can. Here are some ways. Think about it. How many times have you glanced at the financial news headlines and read that the price action in one market was due to the movement in another? Probably fairly often....
Stephen Leeb Of Personal Finance And The Big Picture by Thom Hartle
ARTICLE SYNOPSIS ...Interview: Stephen Leeb Of Personal Finance And The Big Picture by Thom Hartle If a diverse educational background ever lent itself to analyzing the markets, surely that of Personal Finance and The Big Picture newsletters editor Stephen Leeb would do so, with degrees in economics, mathematics and psychology. With that in mind, how does he see the markets? We decided to find out. Leeb spoke to Stocks & Commodities about what his work shows are the important driving forces for the market, his longer-term view of inflation and the indicators he uses. Q: Stephen, how did you begin your career a...
Interview: Speaking of Seasonals with Steve Moore of Moore Research Center by Thom Hartle
ARTICLE SYNOPSIS ...Interview: Speaking of Seasonals with Steve Moore of Moore Research Center by Thom Hartle The concept of seasonality is certainly not new. ""To every thing there is a season,"" Ecclesiastes and, more recently, the 1960s rock group The Birds said. And of course, for commodity traders the commodity markets have always offered seasonal trading opportunities. This month, Stocks & Commodities interviews Steve Moore, a trader and market research analyst who focuses on seasonal and statistical studies of the futures markets. Topics covered include seasonal trades, correlation in markets, options tra...
Gilbert Raff: From Medicine To Money Management by Thom Hartle
ARTICLE SYNOPSIS ...Gilbert Raff: From Medicine To Money Management by Thom Hartle Stocks & Commodities readers have suggested that we interview someone who did not start his or her career in the financial community but was successful enough in the markets to change careers midstream to trading. Gilbert Raff is one such individual. Raff, who was a cardiologist with a background in physics who has also written for Stocks & Commodities, left his medical career to manage money. S&C Editor Thom Hartle spoke with Gilbert Raff about why he changed careers, the similarities between assisting people in managing their he...
SIDEBAR: CALCULATING AN 11-PERIOD CCI by Thom Hartle, Editor
ARTICLE SYNOPSIS ...CALCULATING AN 11-PERIOD CCI by Thom Hartle, Editor The commodity channel index (CCI) can be calculated using any lookback period chosen by the trader. The Excel spreadsheet shown in sidebar Figure 1 is an 1 l-period CCI for the Dow Jones Industrial Average. The first step is to calculate the daily typical price. This is the high, low and close added together and divided by three. This step is performed in column E....
SIDEBAR: Commitment of Traders by Thom Hartle, Editor
ARTICLE SYNOPSIS ...An explanation of Figure 2 from the article ""Analysis of a Winning Trade.""...
Gerald Appel, With Systems and Forecasts by Thom Hartle
ARTICLE SYNOPSIS ...Gerald Appel, With Systems and Forecasts by Thom Hartle Gerald Appel, a well-known name in the annals of technical analysis, not only publishes the Systems and Forecasts newsletter, he is also a money manager with $200 million under management. But he may be best known for something he considers relatively secondary in his accomplishments, for he is also the originator of the popular and enduring moving average convergence/divergence (MACD) indicator. Ironically, however, he doesn't understand what all the fuss is about with the MACD. So what does he feel is worth the fuss? Stocks & Commoditi...
It's All In The Family: Sherman, Marian And Tom McClellan by Thom Hartle
ARTICLE SYNOPSIS ...Interview: It's All In The Family: Sherman,Marian And Tom McClellan by Thom Hartle The McClellan oscillator and the summation index are two popular technical indicators that have been around for more than 25 years, and in fact, the daily values are broadcast daily on CNBC. These tools, which can be found in most software packages, are used for identifying turning points in the stock market, but it's not often that you'll find an in-depth explanation included. So we decided to go to the source and ask the McClellans themselves Sherman and Marian, who first devised the indicators, and son Tom. ...
Trading A Stock Using Technical Analysis by Thom Hartle
ARTICLE SYNOPSIS ...Trading A Stock Using Technical Analysis by Thom Hartle The search goes on for key indicators to help traders find profitable opportunities in the market. Here, Stocks & Commodities Editor Thom Hartle provides an example of a recent trade in a stock based on the foundations of technical analysis, price and volume. Technical analysis has two purposes. The first is to develop an idea about where a market is heading, answering the question of what is happening. For example, if Treasury bond and Treasury bill yields are rising, indicated by a series of higher highs and higher lows, then you sho...
James B. Stack, Big Sky Investor by Thom Hartle
ARTICLE SYNOPSIS ...Interview: James B. Stack, Big Sky Investor by Thom Hartle Thomas Wolfe was wrong: You can go home again. Frank Russell did it when he returned to Tacoma, WA, after he established his well-regarded investment firm in New York, and James Stack did it when he returned to Montana to begin his well-regarded investing newsletters. James B. Stack, president of InvesTech Research, publishes InvesTech Market Analyst and InvesTech Mutual Fund Advisory newsletters. Here, Stack describes how he combines economic, monetary and technical analysis and also shares his evaluation of the current market. Q: ...
Chatting With Marc Chaikin by Thom Hartle
ARTICLE SYNOPSIS ...Chatting With Marc Chaikin - by Thom Hartle Veteran technician Marc Chaikin, senior vice president of Instinet Corp., got started in the financial industry with most fortuitous timing: He was issued his stockbroker's license the very day that the bear market of 1966 ended. Over the years, Chaikin gravitated to trading, turning to technical research when fundamental research faltered and disappointed, and along the way devised the indicator that bears his name, today included in many software technical analysis packages. STOCKS & COMMODITIES Editor Thom Hartle interviewed Marc Chaikin on Octob...
Neuro-Linguistic Programmer Charles Faulkner by Thom Hartle
ARTICLE SYNOPSIS ...Neuro-Linguistic Programmer Charles Faulkner by Thom Hartle Whether you interpret the acronym NLP as Neuro-Linguistic Programming or natural learning process, the cognitive process of trading is what Charles Faulkner, of Chicago-based Mental Edge Trading Associates and a certified Neuro-Linguistic Programming trainer, studies. One aspect of Neuro-Linguistic Programming is a technique for overcoming mental impediments to success. A trader himself, Faulkner has studied successful traders extensively. By modeling the mindsets of successful traders, Faulkner seeks to help other traders follow tho...
Peter Mauthe Of Core Asset Management by Thom Hartle
ARTICLE SYNOPSIS ...The Value Of Valuation Peter Mauthe Of Core Asset Management Money management is simply a process of identifying what to own and when. While there are a number of ways to do so, one unique way is the work of Core Asset Management's Peter Mauthe. STOCKS & COMMODITIE S Editor Thom Hartle interviewed Mauthe via telephone interview on September 22, 1994, asking him, among other questions, about how he views the markets and what his management techniques a re based on. By using mutual funds, we can make very quick, very cost-effective moves in our portfolio. We can move from large-cap stocks to ...
Finding Value Statistically: Geraldine Weiss of Investment Quality Trends by Thom Hartle
ARTICLE SYNOPSIS ...Interview: Geraldine Weiss of Investment Quality Trends by Thom Hartle Have you ever wondered about how to find real value in the markets? Well, this may be the solution to your problem. Geraldine Weiss started the Investment Quality Trends newsletter in 1966. Recently, IQ Trends was included in the seven-member honor roll for performance in up and down markets by the Forbes/Hulbert survey of investment letters. Stocks & Commodities interviewed Weiss about how she started out, the methods she uses for selecting stocks and her thoughts about the market. Q: Geraldine, how did you get started ...
Martin Zweig Of The Zweig Forecast by Thom Hartle
ARTICLE SYNOPSIS ...Martin Zweig Of The Zweig Forecast by Thom Hartle Martin Zweig may be a familiar name to you, and that would not be surprising, considering how many different hats he wears: one as editor of The Zweig Forecast newsletter, one as chairman of the Zweig Fund and one as the head of the Zweig Total Return Fund not to mention one as panelist on the popular TV show Wall $treet Week, on which he has appeared since 1974. Zweig, who has $9 billion under management currently, has spent the past 32 years developing his market indicators and models. Stocks & Commodities spoke with Zweig on a variety of to...
Preprocessing Data And Fast Fourier Transform by Thom Hartle
ARTICLE SYNOPSIS ...Preprocessing Data And Fast Fourier Transform by Thom Hartle Preprocessing data is a popular buzzterm today, but what is it and why do we do it? Well, here's an explanation of data preprocessing and a tutorial on using fast Fourier transforms (Fft). Ffts are used to measure the power and frequency of the cycles within data. As Stocks & Commodities Editor Thom Hartle explains, knowing the cyclical nature of your data can be very helpful for selecting parameters for your favorite indicators. Every day, technicians process price data. If you use a moving average of the price, then you are smoot...
SIDEBAR: Calculating an 11-period CCI by Thom Hartle
ARTICLE SYNOPSIS ...Calculating an 11-period CCI by Thom Hartle Combining two classic indicators, the commodity channel index (CCI) and Bollinger bands, can be a potent timing tool for options trading. This author was inspired by John Bollinger's article ""Bollinger Bands"" from the 1993 S&C Bonus Issue to develop a way of using the CCI to confirm Bollinger bands' trading opportunities. His technique uses a new variation of the CCI, the dual CCI. Here's how to put the technique to work. By D.W. Davies...
The Discerning Trader: Linda Bradford Raschke by Thom Hartle
ARTICLE SYNOPSIS ...The Discerning Trader: Linda Bradford Raschke by Thom Hartle Contrary to popular opinion, dreams can come true. For every trader who's wished that he or she could just stay home and trade, there's one trader who succeeded in doing so. Linda Bradford Raschke began her trading career in 1980 on the floor of the Pacific Coast Stock Exchange before moving to the Philadelphia Stock Exchange. After six years of trading on the floor there, Raschke left to trade her own account from home. Eventually, her focus evolved into developing reliable technical patterns for generating trades and then followin...
Dean Barr On Artificial Intelligence by Thom Hartle
ARTICLE SYNOPSIS ...Dean Barr On Artificial Intelligence by Thom Hartle Barr explains the differences between expert systems and neural networks and some of the keys to successfully applying neural network technology to trading. He also looks at the future of neural network technology. How did you get started managing money? I started on Wall Street in 1983 in a Merrill Lynch training program. Prior to that, I was fortunate enough to spend a few summers on a trading desk. When I joined Merrill Lynch in 1983, I was shipped off to Europe for about a year, where I learned a great deal about the international mar...
The Parabolic Trading System by Thom Hartle
ARTICLE SYNOPSIS ...The Parabolic Trading System by Thom Hartle Traders are always searching for methods with which to manage risk through the use of stop-loss orders. One method that has been proposed for determining stops is by using a mechanical formula based on the parabolic indicator, also known as the stop and reverse (SAR). How does it work? The parabolic time/price system was introduced by J. Welles Wilder in New Concepts in Technical Trading Systems. The trading concept itself is an automatic reversal system, in which the system always has a position that is either long the market or short the market....
SIDEBAR: RANDOM WALK INDEX SPREADSHEET by Thom Hartle, Editor
ARTICLE SYNOPSIS ...SIDEBAR: RANDOM WALK INDEX SPREADSHEET by Thom Hartle, Editor Sidebar Figure 1 is a bar chart with 10 days of simulated data; today's current high and low are plotted as if the market is still trading. The random walk index of the lows can measure if today's low price indicates that the market is trending or just in a random trading range. Sidebar Figure 2 is an example of setting up an Excel spreadsheet for creating the random walk index for lows. This spreadsheet is set up with the most current day's data in the bottom row. Remember that the denominator for the index uses the average range ...
The Traders' Psyche: Tom Basso by Thom Hartle
ARTICLE SYNOPSIS ...The Traders' Psyche: Tom Basso by Thom Hartle Why do traders trade? Is it for the potential profit? Is for the love of the hunt? Or is it simply for the challenge? Jack Schwager, who interviewed Tom Basso, president of Trendstat, for his book The New Market Wizards, dubbed the trader ""Mr. Serenity"" for his approach to trading, managing to be profitable while maintaining peace of mind. Basso, who has $65 million under management, has a trading philosophy that more individuals should embrace: simply, enjoy what you do. Stocks & Commodities interviewed Basso on topics ranging from risk managem...
Paul Rabbitt: The Statistical Scholar Of OpCo by Thom Hartle
ARTICLE SYNOPSIS ...Paul Rabbitt: The Statistical Scholar Of OpCo by Thom Hartle Oppenheimer & Co. senior vice president and chief quantitative portfolio strategist Paul Rabbitt has a number of credits after his name, among which are contributing forecaster for Standard & Poor's Consensus Forecasts and regular contributing analyst for CNBC. But Rabbitt is unusual in that he chose to put a successful and profitable career on hold to return to graduate school, writing his thesis on technical analysis and doing along the way detailed statistical research on more than a hundred indicators. STOCKS & COMMODITIES Edito...
Steven C. Leuthold: Fundamentally Technical by Thom Hartle
ARTICLE SYNOPSIS ...Steven C. Leuthold: Fundamentally Technical Institutional investment strategist and researcher Steve Leuthold brings almost 30 years of investment experience to his positions as chairman of the Leuthold Group, an investment research organization, and chairman of Leuthold & Anderson, an investment management firm. The Leuthold Group, which has more than 300 professional clients, publishes several monthly newsletters and produces Quantitative Themes, a value and growth stock screening product Leuthold, who is the author of The Myths of Inflation and Investing, is also general partner in Leuthold...
Through the Years: Jim Yates Of Dyr Associates by Thom Hartle
ARTICLE SYNOPSIS ...Through the Years: Jim Yates Of Dyr Associates by Thom Hartle As an options market analyst with a quarter century in the securities business, Jim Yates takes us back to when the listed options markets first began. Yates is president of DYR Associates, an investment research firm that publishes daily and weekly reports analyzing the option market and its stock market implications. The reports are read by more than 10,000 brokers at more than 30 firms. Not only that, DYR's market and sector analysis is presented on CNBC every week. Yates, author of The Option Strategy Spectrum, helped develop a...
SIDEBAR: Calculating an 11-period CCI by Thom Hartle
ARTICLE SYNOPSIS ...Calculating an 11-period CCI by Thom Hartle The commodity channel index (CCI) can be calculated using any lookback period chosen by the trader. The Excel spreadsheet shown in sidebar Figure 1 is an 1 l-period CCI for the Dow Jones Industrial Average. The first step is to calculate the daily typical price. This is the high, low and close added together and divided by three....
John Bollinger Of Bollinger Capital Management by Thom Hartle
ARTICLE SYNOPSIS ...John Bollinger Of Bollinger Capital Management by Thom Hartle John Bollinger, C.F.A., C.M.T., former market analyst for CNBC/FNN, president and founder of Bollinger Capital Management, author of the ""Capital Growth Letter"" a market letter for the average investor employing a technically driven asset allocation approach began as a cameraman for the movies before he switched to the quickly expanding world of computerized investing. From there, he went on to form investment techniques for which he gained renown, including the Bollinger Bands, in which moving standard deviations are used to plo...
Philip Roth of Dean Witter by Thom Hartle
ARTICLE SYNOPSIS ...Philip Roth of Dean Witter by Thom Hartle A 27-year veteran of Wall Street, Dean Witter chief technical market analyst Philip Roth has also been a survivor of the merger and acquisitions merry-go-round. After working for Merrill Lynch, Roth worked first for Loeb Rhoades and then E.F. Hutton, both of which were acquired by Shearson over the years, gaining from his experiences a unique perspective of an institutional emphasis compared with a retail emphasis. STOCKS & COMMODITIES Editor Thom Hartle spoke with Phil Roth on October 21, 1992, via telephone, discussing among other topics analyzing t...
The Critical Eye Of Laszlo Birinyi by Thom Hartle
ARTICLE SYNOPSIS ...The Critical Eye Of Laszlo Birinyi by Thom Hartle Laszlo Birinyi of Birinyi Associates is a most unusual technician, one who is critical of most technical methods. Birinyi, a former director of Salomon Brothers, is currently head of his own market research consulting firm and one of Wall $treet Week's 10 technical elves. STOCKS & COMMODITIES Editor Thom Hartle spoke with Birinyi via telephone on November 25, 1992, discussing his work on researching indicators, the importance of historical analysis and his work on money flow analysis. At one point, perhaps by examining the market and living w...
Talking With "Trader Vic'' Sperandeo by Thom Hartle
ARTICLE SYNOPSIS ...Talking With ""Trader Vic"" Sperandeo Victor Sperandeo, money manager, economist and co-author of the popular Trader Vic: Secrets of a Wall Street Master and author of a second book due out this winter, is more than just a successful trader. A trading and investing success who by his own admission never went beyond high school, Sperandeo worked and studied at the school of hard knocks (otherwise known as Wall Street) for his string of successes. How did he do it? What's the secret? As usual, it comes out to hard work -- and study, lots and lots of studying. To find out the details, STOCKS & COM...
The Market Wizard of Interviews: Jack Schwager by Thom Hartle
ARTICLE SYNOPSIS ...The Market Wizard of Interviews: Jack Schwager by Thom Hartle Jack Schwager, director of futures research for Prudential Securities, coprincipal of Wizard Trading and author of Market Wizards, The New Market Wizards and A Complete Guide to the Futures Markets, needs little introduction to the readers of Stocks & Commodities. It was he who, with the original Market Wizards, brought to the limelight some of the most successful traders in the field and persuaded them to explain the secrets to their success. Schwager, who has been in the futures field since 1971, began as a fundamentalist, only ...
SIDEBAR: Spreadsheet Calculations by Thom Hartle
ARTICLE SYNOPSIS ...SPREADSHEET CALCULATIONS This set of oscillators is easily calculated in a spreadsheet (sidebar Figure 1). The first four column are the date, high, low and closing price of Boeing (BA). Column E is the calculation of the 24-period moving average, the basis for the price excess oscillator. The formula for cell E25 is: ......
Leo Fasciocco: Investor's Business Daily by Thom Hartle
ARTICLE SYNOPSIS ...Leo Fasciocco: Investor's Business, Daily by Thom Hartle Investor' s Business Daily columnist Leo Fasciocco came by his expertise in the market the way STOCK & COMMODITIES has always emphasized -- research, research, research. As a financial journalist first for the Philadelphia Evening Bulletin and then U.K. wire service Reuters in New York, Chicago and in Los Angeles, Fasciocco joined Investor's Daily (as it was called then) at the very beginning, where he has been writing the regular stock market column since. Fasciocco has also written a series of articles designed to educate ,the average ...
The ADX by Thom Hartle
ARTICLE SYNOPSIS ...THE ADX The calculation of the average directional movement (ADX) indicator is built on the intuitive notion that a trend is a series of price ranges extending in a consistent direction. In sidebar Figure 1, example A, the second day's trading range is higher than the first day's trading range, indicating positive directional movement. ......
Real Life: Shearson's Jeffrey Weiss by Thom Hartle
ARTICLE SYNOPSIS ...Real Life: Shearson's Jeffrey Weiss by Thom Hartle Some people get a start on their careers early, but Jeffrey Weiss, a Chartered Market Technician and a first vice president with Shearson Lehman, began earlier than most, at age 13. The technical analysis risk management approach (Tarma) he pioneered was developed from his own trading experiences, including the disastrous 1973-74 bear market. His opinions have been widely solicited outside Shearson and he has been a guest on such well-known financial and investment shows as ""Wall $treet Week,"" CNBC's ""Inside Opinion"" and ""Business View""...
First Citizen Of Technical Analysis: Arthur Merrill by Thom Hartle
ARTICLE SYNOPSIS ...First Citizen Of Technical Analysis: Arthur Merrill by Thom Hartle Arthur A. Merrill, currently of Merrill Analysis and Analysis Press and previously of Technical Trends, drew his first bar chart in 1930. His first, earliest calculations were made on slide rule, long before the pocket calculator or indeed the personal computer became a matter of course. Who else has had a chance to watch the markets evolve quite the way that Art Merrill has? Who else has experience quite like his to learn from? Stocks & Commodities interviewed Art Merrill on July 27, 1992, inquiring about today's markets comp...
Frank Gretz of Shields & Company by Thom Hartle
ARTICLE SYNOPSIS ...Frank Gretz of Shields & Company by Thom Hartle Frank Gretz wears many hats for Shields & Company - technician, broker, money manager and market letter writer (not to mention appearing on CNBC in his capacity as a technical analyst) - but he also undertakes the challenge of managing his firm's trading account. Over time, he has developed a trading philosophy designed to keep his trading on an even keel and profitable. How does he do it? Stocks & Commodities interviews Gretz on his trading methods and trading philosophy. Frank, how did you get started in the business? I got interested in the...
The Technical Song of Bernadette Murphy by Thom Hartle
ARTICLE SYNOPSIS ...The Technical Song of Bernadette Murphy by Thom Hartle ""The investor is in conflit, right now, because we've had the tremendous advance of consumer stocks throughout the 1980s. What we have is this battle: Should you be following capital goods? Or should you stay with growth stocks?"" -- Brernadette Murphy Bernadette Murphy, C.M.T., of M. Kimelman & Co., who, like so many others, came to Wall Street out of curiosity but never intended to stay, is a longtime veteran of the markets. She has seen fads take the Street by storm and then promptly fade, and she's witnessed market peaks and crashes ...
Gail Dudack Of S.G. Warburg by Thom Hartle
ARTICLE SYNOPSIS ...Gail Dudack Of S.G. Warburg by Thom Hartle S.G. Warburg senior vice president, head of market strategy and technical analyst Gail Dudack, C.M.T., is no newcomer to technical analysis or the world of Wall Street; she began her career at Pershing & Co. (now a division of Donaldson, Lufkin & Jenrette) in the early 1970s, eventually writing a weekly market strategy letter for Pershing before she joined international brokerage firm Warburg in 1987, where she writes both weekly and monthly strategy letters. In the meantime, she has served, among other capacities, on the Market Technicians Associati...
Identifying Trading Opportunities by Thom Hartle
ARTICLE SYNOPSIS ...Identifying Trading Opportunities by Thom Hartle One of the most important aspects of any trade is timing the entry. Perhaps surprisingly, daily and weekly analysis can be instrumental in planning an entry for long-term trades. Here's an overview on how to use daily and weekly technical analysis to identify trading opportunities that may only come up once a year. S&C Editor Thom Hartle outlines a complete approach to trading, incorporating basic charting and trendline plotting, the stochastics oscillator and momentum studies. Over the years, my trading style has evolved out of necessity. Wha...
Global Analyst Mitzi Wilson Carletti by Thom Hartle
ARTICLE SYNOPSIS ...Global Analyst Mitzi Wilson Carletti by Thom Hartle Senior research analyst Mitzi Wilson Carletti joined Frank Russell Company as a research analyst in 1988 from Merrill Lynch. Carletti researches, monitors and evaluates international money managers as well as assisting client executives and other research staff to develop client strategy recommendations. In addition, she oversees and is responsible for non-U.S. derivative and global tactical asset allocation research. STOCKS & COMMODITIES Editor Thom Hartle spoke with Carletti on March 27, 1992, via telephone interview, on topics ranging fro...
Elizabeth Marbach of Rodman & Renshaw by Thom Hartle
ARTICLE SYNOPSIS ...Elizabeth Marbach of Rodman & Renshaw by Thom Hartle Elizabeth Marbach, first vice president and broker/analyst in the financial futures group for Rodman & Renshaw, started out in the early 1980s down in the Treasury bill trading pit on the Chicago Mercantile Exchange floor before eventually moving off the exchange floor. S TOCKS & COMMODITIES Editor Thom Hartle interviewed Marbach on April 20, 1992, on topics ranging from the Eurodollar market to the dangers of pyramiding. So how did you get started in the business? Well, I started out in the government bond department at Continental Illin...
"Technician's Technician" Martin Pring by Thom Hartle
ARTICLE SYNOPSIS ...""Technician's Technician"" Martin Pring by Thom Hartle Technician-writer-money manager: Martin Pring was described as the ""technician's technician"" by Barron's, and his diverse background can certainly confirm that. Pring received his initial training with a Canadian investment dealer. His interest in technical analysis led him to join Storey, Boeckh in 1975, publisher of The Bank Credit Analyst. ""The Pring Market Review"" was introduced in 1984 as an extension of his interest in technical analysis. Along the way, he has lectured on and published a number of works on investing and technic...
Talking With "Turtle" Russell Sands by Thom Hartle
ARTICLE SYNOPSIS ...Talking With ""Turtle"" Russell Sands by Thom Hartle We talked with ""turtle"" Russell Sands about the importance of risk management, following the trend and understanding crowd behavior. How did you end up becoming one of the turtles? Believe it or not, I was reading the help-wanted section in The New York Times and I saw this ad. I don't think it was very specific at all. It just said ""prominent Chicago trading firm looking for people that they can train in their methods"" and went on to say that they were willing to train and bankroll you. So I sent in a resume and they sent back this q...
Ed Seykota Of Technical Tools by Thom Hartle
ARTICLE SYNOPSIS ...Ed Seykota Of Technical Tools by Thom Hartle Ed Seykota, whose thoughts and insights were chronicled in Jack Schwager's book Market Wizards, has been involved with trading commodities since the late 1960s. According to Market Wizards, Seykota's ""model account"" -- an actual customer account -- started with $5,000 in 1972 and to date has earned more than a 250,000% gain. Recently, in a new challenge, he purchased data and software vendor Technical Tools. S TOCKS & COMMODITIES Editor Thom Hartle interviewed Seykota in a series of written correspondence that took place over several months ending ...
Tony Tabell: Technical Torch by Thom Hartle
ARTICLE SYNOPSIS ...Tony Tabell: Technical Torch by Thom Hartle Tony Tabell has carried the family tradition of technical analysis through the years, given to him from his father, technician Edmund Tabell, and his great uncle, Richard D. Wyckoff, long before most professional investors even recognized it as a legitimate technique. STOCKS & COMMODITIES Editor Thom Hartle interviewed Tabell in a telephone interview on January 24,1992, asking him to recount some of his experiences as a second-generation technician Practicing technical analysis since 1954, Tabell speaks about his impressions of the historical stock ...
Steve Shobin Of Merrill Lynch by Thom Hartle
ARTICLE SYNOPSIS ...Steve Shobin Of Merrill Lynch by Thom Hartle I'd first like to start off with some information about your background and how you first became interested in technical analysis. I graduated from the University of Pittsburgh in 1966 as an English literature major; became a cab driver and a social worker and thought that there had to be a better way of making a living. So I joined Merrill Lynch in 1967. I had always had an avocational interest in the stock market but never thought of using technical analysis. Then a gentleman named Mr. Berer from Pittsburgh introduced me to Chart Craft's three-p...
Paul Merriman On Mutual Fund Timing by Thom Hartle
ARTICLE SYNOPSIS ...Paul Merriman On Mutual Fund Timing by Thom Hartle Paul Merriman, founder and president of The Merriman Investment Management Company, manages the portfolio of the Merriman Mutual Funds. He also publishes a newsletter and hotline service called ""Fund Exchange,"" specializing in market timing no-load mutual funds. He wrote Market Timing with No-Load Mutual Funds, which was published 1987, and has a new book due out in January 1992, Investing for a Lifetime. Merriman's philosophy is that the main purpose of timing is not to maximize profits in a bull market but to limit losses in a bear marke...
William Byers Of Bear Stearns by Thom Hartle
ARTICLE SYNOPSIS ...William Byers Of Bear Stearns by Thom Hartle William Byers, director of commodities futures research and a managing director of Bear, Stearns & Co., has been in the investment business since 1972. In addition to his administrative functions relating to Bear Stearns' commodity futures business, he is responsible for all of the firm's futures market research and serves as broker for a number of large speculative and institutional accounts. Byers is also a past director of the Market Technicians Association and the Futures Industry Association Research Division. STOCKS & COMMODITIES Editor Thom ...
John McGinley of Technical Trends by Thom Hartle
ARTICLE SYNOPSIS ...John McGinley of Technical Trends by Thom Hartle The Technical Trends newsletter, originally published by technician Arthur Merrill, presents statistical analysis of the stocks and futures market in graphic form. STOCKS & COMMODITIES Editor Thom Hartle and Technical Editor John Sweeney spoke with John McGinley, Technical Trends' editor, via a telephone interview on February 21,1991. (See also in this issue Arthur Merrill's article, ""Testing indicators."") JS: So what do you like to trade, anyway? Oh, if I trade anything it's the NYFE contract. That's the only thing I've ever dabbled in. T...
Steve Nison On Candlestick Charting by Thom Hartle
ARTICLE SYNOPSIS ...Steve Nison On Candlestick Charting by Thom Hartle Thanks to Steve Nison of Merrill Lynch, the Japanese candlestick formation method has become international. Nison's first article on the candlestick formation in December 1989 triggered a flood of interest about the ancient method. Since then, he has spoken on candlestick charting widely and has appeared on FNN and CNBC on the subject as well. Nison, a New Yorker and a Merrill Lynch vice president specializing in futures technical analysis/options strategies, provides investment and timing strategies and trade recommendations and market views...
Moving Average Convergence/Divergence (MACD) by Thom Hartle
ARTICLE SYNOPSIS ...Moving Average Convergence/Divergence (MACD) by Thom Hartle The moving average convergence/divergence (MACD) method was developed by Gerald Appel as a technique to signal trend changes and indicate trend direction. The procedure uses the difference between two exponentially smoothed price data, called the MACD line, and an exponentially smoothed series of this difference, which is called the signal line. An exponential smoothing of price data has the advantage of responding quickly to price changes while smoothing data in a consistent manner. The calculation of a exponentially smoothed movin...
Stochastics by Thom Hartle
ARTICLE SYNOPSIS ...Stochastics by Thom Hartle During the late 1950s, George C. Lane was actively involved with researching different types of oscillators to use as trading indicators. The name of each indicator was simply a letter from the alphabet, such as %A. The research took him through the alphabet twice before he decided to use two in particular, called the %K and %D. The stochastics oscillator was the result of this research. The term ""stochastics"" is actually a misnomer, as stochastics is a synonym for ""random.""...
The Average Directional Movement Index (ADX) by Thom Hartle
ARTICLE SYNOPSIS ...The Average Directional Movement Index (ADX) by Thom Hartle Directional movement, according to technician J. Welles Wilder, is one of the most interesting aspects of market analysis. Markets clearly move from trending periods to trading ranges, but determining when this change occurs presented a challenge. To meet this challenge Wilder developed the Average Directional Movement Index (ADX). The Average Directional Movement Index is an indicator that is designed to rate the directional movement of stocks or commodities. The index uses a scale of zero to one hundred to rate the trend intensity...
John Murphy: Intermarket Analyst by Thom Hartle
ARTICLE SYNOPSIS ...John Murphy: Intermarket Analyst by Thom Hartle When you think of classic textbooks on technical analysis, John J. Murphy's Technical Analysis of the Futures Markets comes to mind. Murphy, who is also the resident technical analyst for cable television's CNBC, has lately published Intermarket Technical Analysis, which takes the analysis of markets into the global arena, demonstrating how to monitor the effects that today's interrelated and interdependent markets have on each other. STOCKS & COMMODITIES Editor Thom Hartle interviewed Murphy via telephone on March 20,1991. ""A stock market tec...
Comparing Indicators: Stochastics %K versus Williams' %R by Thom Hartle
ARTICLE SYNOPSIS ...Comparing Indicators: Stochastics %K versus Williams' %R by Thom Hartle Ironically, technicians today suffer from overabundance. Compared with the dearth of only a few years ago, technical analysis packages today offer so many indicators that a trader can be overwhelmed. As a consequence, building a trading system based on an array of technical indicators requires painstaking investigation to assure that each indicator is appropriate for the task in question. A typical trading system, for instance, could have long, intermediate- and short-term indicators intended to produce trading signals wi...
Arms On Arms by Thom Hartle
ARTICLE SYNOPSIS ...Arms On Arms by Thom Hartle STOCKS & COMMODITIES readers may already be familiar with the work of Richard Arms, inventor of the Arms index and Equivolume charting, author of many books, a 30-year veteran of the stock market and contributor to STOCKS & COMMODITIES. Editor Thom Hartle interviewed Arms via telephone on April 22,1991, about the importance of volume in analyzing the market, volume cyclicality and his methods of individual stock selection. ""If the market wore a wristwatch, it would be divided into shares, not hours."" -- Richard Arms...
Analyzing Volume For Consolidations And Reversals by Thom Hartle
ARTICLE SYNOPSIS ...Analyzing Volume For Consolidations And Reversals by Thom Hartle Markets move from one price level to another as trends. Once a trend has been established, technicians tend to continually analyze the market searching for clues about the current status of the trend. Is the trend beginning to weaken? Will the trend be reversed? Or will the market consolidate and then resume the trend? A market that has had a sustained advance will typically enter into a trading range. How can you ascertain whether the trading range is a consolidation or a reversal? Analysis of the volume and the price action is...
A Session With Alex Elder by Thom Hartle
ARTICLE SYNOPSIS ...A Session With Alex Elder by Thom Hartle Alexander Elder, director of the Financial Trading Seminars, is no newcomer to technical analysis nor to trading. Technical Editor John Sweeney and Editor Thom Hartle interviewed Elder on July 18 of last year in the STOCKS & COMMODITIES offices. How are you learning to become a better trader? The best way I know to become better at anything is to teach. Being confronted with a whole group of people who expect information and who ask very tough questions is the best way to organize my thinking and to become better at whatever it is that I'm doing. I f...
Classic Reversal: A Double Bottom by Thom Hartle
ARTICLE SYNOPSIS ...Classic Reversal: A Double Bottom by Thom Hartle The major commercial interests are involved in markets as a business. Large amounts of money are committed to managing the risk that is faced by these companies. Companies on the cash side of markets will use futures to enhance positions with leverage or to protect themselves from adverse price movement. Decisions are based on extensive fundamental and technical research. The size of the positions assumed by these players will be revealed by trading volume seen on each day's activity. One facet of technical analysis is that the large professio...
Ralph Bloch: 34-Year Trading Veteran by Thom Hartle
ARTICLE SYNOPSIS ...Ralph Bloch: 34-Year Trading Veteran by Thom Hartle Ralph Bloch, senior vice president and chief market analyst for Raymond James, has been active as a technical analyst on Wall Street since 1956 and has been writing weekly technical commentary for Mansfield Chart Service for the past six years. STOCK & COMMODITIES Editor Thom Hartle interviewed him via telephone on November 20,1990, to get his views on the markets, technical analysis and Wall Street of the past 35 years. I have a very limited and narrow view and somehow I've survived (trading) 34 years. --Ralph Bloch I'd like to start off w...
Keeping A Trading Journal by Thom Hartle
ARTICLE SYNOPSIS ...Keeping A Trading Journal by Thom Hartle Success in trading the markets does not come overnight. It is probable that the novice who profits early and easily in his trading career will view the gains as the easiest money he or she ever made. It is also very likely, however, that the trading newcomer stumbled into a powerful bull market, in his innocence buying the market, either placing stops very far away or not using stops at all and watching mistimed entries become profitable only because of the continued strength of a bull market. Emboldened by his success, the new trader will increase his...
Fidelity's Philip Erlanger by Thom Hartle
ARTICLE SYNOPSIS ...Fidelity's Philip Erlanger by Thom Hartle Fidelity Management and Research Co.'s senior technical analyst Philip Erlanger is a major force behind one of the most successful managed-fund companies in the country. He arrived at technical analysis in a roundabout way starting as a stock broker for Reynolds Securities in the 1970s, getting interested in computers along the way even before the I BM PC revolutionized the industry and working as an analyst for Advest before coming to Fidelity, where he analyzes industry groups stocks and the market looking at junk bonds and currencies. STOCKS & COMM...
Tim Hayes: Running With The Trend by Thom Hartle
ARTICLE SYNOPSIS ...Tim Hayes: Running With The Trend by Thom Hartle Ned Davis Research strategist Tim Hayes spoke with S&C about the firm's approach and emphasis on models and trend-sensitive indicators. Ned Davis Research uses a three-part market model, among others. STOCKS & COMMODITIES Editor Thom Hartle interviewed Hayes via telephone on May 23, 1991, and spoke with him about Ned Davis Research's risk-averse approach as well as the firm's emphasis on models, trend-sensitive indicators and a monetary approach....
All By His Elf: Robert Nurock by Thom Hartle
ARTICLE SYNOPSIS ...All By His Elf: Robert Nurock by Thom Hartle The most money is made in the market by those who are able to identify trends early and stick with them -- not trade out of issues just because they've gone theoretically too far, too fast."" -- Robert Nurock Robert Nurock is perhaps best known for his 19-year sojourn on the Wall Street Week TV program. He decided, in October last year, to resign as panelist and ""Chief Elf "" on the respected financial show to concentrate on his own research. Nurock spoke with STOCKS & COMMODITIES Editor Thom Hartle via telephone on Tuesday, February 5, 1991. To s...
The Broadening Formation And The Bond Market by Thom Hartle
ARTICLE SYNOPSIS ...The Broadening Formation And The Bond Market by Thom Hartle Trading the bond futures market offers opportunity to the skilled chartist because a diversity of price patterns occurs over time. In reality, chart patterns are accumulation, distribution, consolidation or trending periods. If you are able to accurately recognize an accumulation period -- that is, demand, support or a price bottom -- and are positioned (long) for the markup in prices (an uptrend), then the accuracy of your work can be quite profitable. The same can be said for correctly appraising a distribution period (otherwise kno...
One Approach To Trading Bonds by Thom Hartle
ARTICLE SYNOPSIS ...One Approach To Trading Bonds by Thom Hartle During the course of trading, the technician strives to enhance profitability by developing a consistent approach. Success in trading, as in any profession or practicing any skill, comes from the school of hard knocks, trial and error: experience, and developing good judgment. Trading is perhaps one of the most difficult skills to acquire because experience can be so expensive. There is no four- or six-year university that will give the prospective trader a curriculum, tests, field trips and homework in the art and science of trading. There are, h...
Stage Analysis by Thom Hartle
ARTICLE SYNOPSIS ...Stage Analysis by Thom Hartle Funds are invested in markets for various reasons. A high return on investment capital, of course, is the ultimate goal. Investment decisions, however, often are made with only limited amounts of careful thinking behind the decision to place capital at risk. The competitive nature of any market dictates that success over the long run will be directly correlated with the amount of effort advanced. The process of carefully thought-out investment begins with a thorough understanding of the market in question and a range of information sources. The typical first ste...
Stochastics and long-term trends by Thom Hartle
ARTICLE SYNOPSIS ...Stochastics and long-term trends by Thom Hartle The price of the bond futures market reacts to changing fundamentals that are global in nature and very complicated--Foreign Central banks' policy on the exchange rate for the dollar, the rate of money supply growth in the United States, the employment situation, our fiscal policy, growth in the import and export sector, the Japanese stock market, the price of oil, international political tensions, just to name a few of the fundamentals ! Day in and day out the marketplace analyzes, discusses, researches and acts on these fundamentals and more. ...
Elementary Bond Trends by Thom Hartle
ARTICLE SYNOPSIS ...Elementary Bond Trends by Thom Hartle The bond market provides the technician with an assortment of approaches to trading. Complex and esoteric styles occupy one end of the spectrum, while the other extreme is represented by techniques that are simple and straightforward. For my money, the elementary style is the most appealing. Using an approach built upon the basics of trading provides me with the best forecasts of the bond market's direction. Experience has taught me that the bond market marks time in periods that are bottoms, consolidations and tops. If the bond market is not marking tim...
Trading T-bonds with Equivolume by Thom Hartle
ARTICLE SYNOPSIS ...Trading T-bonds with Equivolume by Thom Hartle A technician attempts to identify areas of price where supply or demand will affect the value of an item. If your method correctly responds to or forecasts the demand or supply entering the market, you may profit by the price adjustment of that item. A technique that helps me understand the subtle shifts in supply or demand (and consequently the change in price) is Equivolume Charting developed by Richard W. Arms, Jr. Equivolume Charting lets me visually interpret the relationship of volume to price movement in a way that traditional bar charts w...
Overbought and oversold indicator by Thom Hartle
ARTICLE SYNOPSIS ...Overbought and oversold indicator by Thom Hartle Traders often refer to markets as being in various states or conditions with a jargon that covers the spectrum of market action. Starting with ""It's a bull market. . .the market is overbought. . .the market is consolidating"" and moving to ""The market is forming a top. . .the market is oversold. . .it's a bear market. . .the market has bottomed. ""The point of this article is to explain a simple tool that I use to help me identify overbought and oversold conditions in the T-bond futures market. Overbought implies that a market has only a min...
An advance/decline line for commodities by Thom Hartle
ARTICLE SYNOPSIS ...An advance/decline line for commodities by Thom Hartle One of the first technical lessons in stock market investing is understanding the relationship between the movements of the Dow Jones Industrial Average (DJIA) and the advance/decline (A/D) line for the New York Stock Exchange. The A/D line is the cumulative difference between the number of issues trading up on the day and the number of issues trading down on the day. If 235 issues are up and 356 issues are down then the A/D value for the day will be -121. You may begin a cumulative total with any number. If you start with 1,000 and add ...
Listen to the market by Thom Hartle
ARTICLE SYNOPSIS ...Listen to the market by Thom Hartle Technical analysis encompasses a myriad of approaches and, in the face of the trend toward high-tech, I admit to being less of a computer system trader and more of a traditional chartist. I actually prefer to state that I analyze the bond futures market as an interaction of supply meeting demand and determining price. That may sound decidedly low-tech, but behind the most exotic computer program ever developed for trading it is still the forces of supply and demand that present the trading openings. If demand appears to be stronger than supply then bonds s...
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