ARTICLE SYNOPSIS ...1991 Cycles by John F. Ehlers If you've always suspected that contracts have definite personalities, you would have your suspicions confirmed this way. Here's an overview of various cycles that appeared in some futures markets during 1991, the way only John Ehlers could explain it. In years past I have reported on the cyclic character of various commodity contracts, concluding that tradeable cycles were present from 15% to 30% of the time and that some contracts tend to have definite cyclic personalities.These conclusions were reached by making spectral estimates on a daily basis and then ga...
BY: John F. Ehlers
ARTICLE SYNOPSIS ...Blending Time Frames by Linda Satterfield The stock market has worlds within worlds, if you think about it -- time frames within time frames, all interlinked and interdependent. The problem is, if you look at too small a time frame, you could find yourself drowning in minutiae, and if you look at too large a time frame, you could find yourself missing signals of opportunity. There must be a way to equitably look at situations both large and small without getting bogged down. Linda Satterfield has a few suggestions. For many traders, monitoring intraday charts can be an exciting experience. It...
BY: Linda Satterfield
ARTICLE SYNOPSIS ...Closing Arms by Arthur A. Merrill, C.M.T. The Arms index has been verified, deified, and even modified, certainly within the pages of STOCKS & COMMODITIES. Now the index is examined again, this time by noted veteran technician Arthur Merrill, to find out whether the daily closing Arms index is helpful in pointing the probable direction of the market on the following day. The index originally known as TRIN, or the short-term trading index, is now properly labeled the Arms index. (I may have been the first to suggest this change.) The index's usefulness and versatility has been discussed in se...
BY: Arthur A. Merrill, C.M.T.
ARTICLE SYNOPSIS ...Developing Neural Network Forecasters For Trading by Jeffrey Owen Katz, Ph.D. Neural networks, for many, still exist only in the realm of theory, without having real, practical, everyday uses -- yet. But neural network applications need not be confined solely to theory and simulation for trading purposes. Ambitious traders can build neural nets for themselves. There are pitfalls along the way, but Jeffrey Owen Katz explains what they are and how to avoid them. For many traders, neural networks exist only as fantasy, surrounded by an aura of mystery, unknown and unexplainable. For some, the te...
BY: Jeffrey Owen Katz, Ph.D.
ARTICLE SYNOPSIS ...Measuring An Indicator's Forecasting Ability by George R. Arrington Indicators are used to forecast a market. Traders have their favorite indicators. How can a trader determine whether an indicator leads the market? How can we tell whether one indicator is superior to another? Arrington explains how to measure a technical indicator's ability to forecast prices. Many traders use a variety of technical indicators to forecast changes in the prices of stocks and commodities, including such diverse indicators as stochastics, relative strength, on-balance volume, sentiment index, weather patterns,...
BY: George R. Arrington, Ph.D.
ARTICLE SYNOPSIS ...Money Management Using Simulation And Chaos by Bob Pelletier Here's how to determine your trading system's minimum capital requirements and discover how market exposure should be modified to maximize profits without increasing risk. Bob Pelletier explains. Any successful trading system must offer good timing signals, but timing alone does not guarantee profitable results. While good timing is essential, the addition of key money management techniques fashioned through mathematical manipulation can mean the difference between moderate success and the accumulation of true wealth. To succeed in...
BY: Robert Pelletier
ARTICLE SYNOPSIS ...On Composite Sentiment by James P. Martin Despite all the powerful technical tools available, even the savviest technicians are susceptible to emotion and on occasion succumb to psychological influences that prevent them from taking appropriate action, thus losing out on opportunity. Nevertheless, James Martin writes, how the market reacts is a fascinating subject. He continues his quest for more quantifiable measures for sentiment indicators. In my first article in the June 1990 STOCKS & COMMODITIES, I showed a refinement of traditional call/put ratios that greatly enhanced their reliabilit...
BY: James P. Martin
ARTICLE SYNOPSIS ...Reversing Your Losses by John Sweeney Last month, Settlement closed with some incomplete work: the profit and loss charts for trades added onto the underlying system that was developed in the months prior. To finish the subject of evaluating add-on trades, I've completed those charts by trading the add-on system for the remaining years of data -- 1991, 1990 and 1988. To recap, the underlying bond trading system trades solely off the 35-day simple moving average of closing bond prices in the December contract. The trend is determined by the 17-day average of the day-to-day difference in the mov...
BY: John Sweeney
ARTICLE SYNOPSIS ...BREAKOUT RELIABILITY The reliability of a breakout from a trading range as a signal for an impending trend is significantly improved if prices are still beyond the range after a number of days (e.g., 5) . ... --Jack D. Schwager...
BY: Technical Analysis, Inc.
ARTICLE SYNOPSIS ...EXPLAINING r Correlation analysis to measure the degree of relationship between two variables. Gives a spreadsheet example and formulas....
BY: Technical Analysis, Inc.
ARTICLE SYNOPSIS ...USING OPTION RATIOS To many traders and investors, the limited-risk aspect of the purchase of both call and put ratios is appealing. Many market followers believe that when the major activity is concentrated in either calls (bullish expectations) or puts (bearish expectations), extremes in crowd psychology will appear. An overabundance of optimism usually accompanies a market top, while market bottoms are typified by a preponderance of pessimism....
BY: Technical Analysis, Inc.
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 ...
BY: Thom HartleSUBJECT: Interview
ARTICLE SYNOPSIS ...Trading Planetary Eclipses by Hans Hannula, Ph.D., C.T.A. Stock market lore has long been filled with claims that planetary motion affects stock and commodity prices. As most market students who pursue this topic find out, however, many rules and explanations of what causes tops and bottoms in markets contradict each other about which planets are important and what could cause these effects. There are relationships, but they differ from what one might find in the literature of financial astrology. Hans Hannula explains. In financial astrology, the angles formed between two planets as viewed ...
BY: Hans Hannula, Ph.D., RSA, CTA