ARTICLE SYNOPSIS ...2-bar NR and ORB by Toby Crabel Markets are in a constant state of flux; they are continuously shifting from movement to rest and back to movement again. This interchange is never ending -- from contraction to expansion to contraction -- with one phase directly responsible for the other's existence. A two-bar narrowing range (2-bar NR), a price pattern that is the narrowest two-day range relative to any two-day range within the previous 20 market days, reflects that market activity and quantifies the market concept of contraction. Thus, contraction is a relative condition that can occur even in...
BY: Toby Crabel
ARTICLE SYNOPSIS ...Insider insight Richard W Arms. Jr. For months the stock in question has done very little. It has moved sideways in a narrow trading range on moderate volume. Suddenly, volume doubles, the stock moves sharply higher, breaking out above the old congestion and signaling the beginning of a move which could be extremely profitable! It's a trader's dream, if he or she happens to notice the move and recognizes its importance. The dream can turn into a nightmare, however, if the move is quickly aborted and the stock drops back into the old range or, worse yet, if it abruptly turns around.. There are...
BY: Technical Analysis, Inc.
ARTICLE SYNOPSIS ...Letters to S&C This month's letters give definitions of short interest, short interest ratio and total short sales; and discuss point and figure software....
BY: Technical Analysis, Inc.
ARTICLE SYNOPSIS ...Martingales by James William Ferguson It was the first time I had ever been in Las Vegas, the first time I'd played a Martingale, and my eyes had been riveted to the flashing roulette wheel for more than three hours. Finally, hearing the whispers behind me, I turned and saw the crowd, six deep, straining to see the play. I was shocked. I had not realized the magnetism a betting system exerts on a gambling crowd. ""How're they doing?"" someone whispered. ""Great. They're 'way ahead."" I caught the quick smile of a young blond woman wearing a mink stole near me. In the desert. In July, at 12...
BY: James William Ferguson
ARTICLE SYNOPSIS ...Modeling the markets with Bezier curves by Mark Angel The Bezier curve, also known as a B-curve, is a mathematical construct for tracing a smooth path between a series of key support and resistance points. B-curves, which were created as an industrial engineering method, are also a powerful new tool for understanding and predicting commodity markets. A quick glance at a price chart reveals a tortuous winding path of bars pulled first in one direction and then another by unseen forces. The march of prices is rarely linear. Frequently, the market appears to steer a meandering course between fl...
BY: Mark Angel
ARTICLE SYNOPSIS ...SIDEBAR: Bezier equations The Bezier method is based on three equations which are provided in this sidebar....
BY: Technical Analysis, Inc.
ARTICLE SYNOPSIS ...SIDEBAR: Test parameters Parameters needed to use a Bezier program or to test curves by hand....
BY: Technical Analysis, Inc.
ARTICLE SYNOPSIS ...Staying with the markets by Eric L. Sharp Experience is a great teacher, but she charges such horrendous fees. Traders in both the cash and futures markets know that better than anyone. Anything that increases your insight into directions and targets for prices can replace some costly lessons. For years now, I've used a combined process of statistical and technical analysis for making investment and trading decisions. The results of the statistical analyses give me a framework for making projections and recognizing over- and under valuations. That adds to my confidence in applying technical a...
BY: Eric L. Sharp
ARTICLE SYNOPSIS ...Stock market timing with interest rates by Jay Kaeppel The level and trend of interest rates has a tremendous influence over what types of investments investors choose to put their money into. Generally, when interest rates are low and/or falling, investors will move into the stock market, pushing prices higher. Conversely, when interest rates are high and/or rising, investors will move out of stocks, thus pushing prices lower. By tracking interest rates, investors can often identify periods when the probability of higher stock prices is great. The key is knowing which interest rates to watc...
BY: Jay Kaeppel
ARTICLE SYNOPSIS ...Volatility skews by Andrew Sterge It is inevitable that relative mispricings occur among many different options on a single underlying instrument. It is possible to exploit these mispricings using the Black-Scholes theory of option valuation, despite risk and the inherent flaws in the model. This can be done by trading spreads in which theoretically underpriced options are bought and theoretically overpriced options are sold. Analysis of virtually any class of option prices reveals that the options do not all trade at the same implied volatility. This is counterintuitive, because implied vol...
BY: Andrew Sterge
ARTICLE SYNOPSIS ...Volume indicators by Arthur A. Merrill, C.M.T. The activity of the market, its volume, has long been of interest to investors and traders. I have a copy of the first book on stock market technique, ABC of Stock Speculation, written by S. A. Nelson in 1903. In it, he discusses the saying, ""A dull market precedes a decline"" and the differences in bull and bear markets. Volume on a rise has always been considered good news; volume on a decline is bad news. It's an indication of the direction of enthusiasm. Is the market enthusiastic on the rises or is it enthusiastic on the declines? To mea...
BY: Arthur A. Merrill, C.M.T.
ARTICLE SYNOPSIS ...WAD trades ABX by Joseph Barics Williams' on-balance volume, or ""WAD,"" takes each day's W, where W = [Close - Yesterday's Close/ High - low] Volume, and adds it to a cumulative total. (Note: when available, open replaces yesterday's close.) Therefore, WAD = SW...
BY: Joseph Barics