ARTICLE SYNOPSIS ...Asset Allocation: Stocks, Bonds, Futures by K.D. Angle Investment survival depends on an investor's ability to adapt to the market. Is it possible to develop a strategy that performs under all conditions, whether inflation or deflation, recession or prosperity? K.D. Angle, futures portfolio manager and publisher of ""The Timing Device"" newsletter, says yes in this, his first STOCKS & COMMODITIES appearance. Take a look. Is it possible to develop an investment strategy that would perform under all economic conditions? After all, I reasoned, there are times when major investment vehicles wo...
BY: K.D. Angle
ARTICLE SYNOPSIS ...You can trade markets by combining congestion phase analysis with candlestick charting patterns. This technique, a form of pattern recognition, can be used to profit from stocks, commodities and futures. Holliston Hill Hurd explains. Three steps are necessary in using candlestick charts for trading congestion areas. First--and it is indeed a very important first--the trader must understand congestion areas. Second, the trader must understand reversal patterns within the congestion areas using candlestick charts. Third, the trader must define when and how to enter the market. For beginning trade...
BY: Holliston Hill Hurd
ARTICLE SYNOPSIS ...Cycle Analysis And Intraday Trading by John F. Ehlers Veteran S TOCKS & COMMODITIES contributor John Ehlers explains how to make use of cycles analysis in intraday trading, heretofore a rarity. Take a look. Intraday traders have long had most of the technical analysis tools available to end of day traders--with one major exception: cycle analysis. Previously, cycle analysis has been difficult to incorporate into intraday trading because manipulating data files distracted from the business of trading. Now that situation has changed, and finally, cycle analysis can effectively be incorporated in...
BY: John F. Ehlers
ARTICLE SYNOPSIS ...Guidelines For Risk Management by George R. Arrington Risk control is an essential part of trading successfully. Effective risk management requires not only the careful monitoring of risk exposure, but a strategy to minimize losses as well . Understanding how to control risk exposure allows the trader, beginner or veteran, to continue trading even when the inevitable losses occur. S TOCKS & COMMODITIES contributor George R. Arrington offers guidelines for risk control. While every trade involves a degree of risk, some general principles of risk management, if applied, reduce the potential fo...
BY: George R. Arrington, Ph.D.
ARTICLE SYNOPSIS ...Point & Figure Relative Strength by Michael J. Moody and Harold B. Parker STOCKS & COMMODITIES contributors Michael J. Moody and Harold B. Parker suggest using point and figure and relative strength as a way to identify strong and weak stocks. It has often been asserted that long-term relative strength of individual stocks is an important component of trading success. This makes intuitive sense: one ought to be able to construct a portfolio that outperforms the market by selecting stocks that are stronger than the market on a relative basis. There are numerous formulations for relative stre...
BY: Michael J. Moody and Harold B. Parker
ARTICLE SYNOPSIS ...Relative Momentum Index: Modifying RSI by Roger Altman Overbought/oversold indicators are popular among traders for identifying market turns. The relative strength index (RSI) is one such popular indicator. Here, Roger Altman presents his work on modifying the index to smooth the indicator's sensitivity to momentum and the benefits that result. When a technical indicator such as a moving average or stochastics fails to give a timely signal, it is almost always due to the indicator's lookback period being out of phase with price movement. For most indicators to work properly, they need to use...
BY: Roger Altman, Ph.D.
ARTICLE SYNOPSIS ...MONEY FLOW INDICATOR The money flow indicator is based on the concept that the large-volume single trades are much more important than smaller-share trades. For example, if a stock trades down one tick on 200 shares and then the next trade is an uptick on 12,000 shares, then the large buyers are aggressively purchasing the stock. The opposite holds true for a negative indication. A stock that trades up a tick on 100 shares and the next trade is down a tick with 11,000 shares is being sold by large traders. The volume of shares traded on upticks is summed and the volume of shares traded on dow...
BY: Technical Analysis, Inc.
ARTICLE SYNOPSIS ...REGRESSION CHANNEL ANALYSIS To construct a regression channel (Article Figure 16) from the last key high or low on a weekly chart, we built a least-squarest best-fit regression line Z to the next key low or the last trading day, whichever is lower. To derive this line, it is most convenient to use one of the many excellent computer charting programs; calculating by hand simply takes too long....
BY: Technical Analysis, Inc.
ARTICLE SYNOPSIS ...THE CANDLESTICK METHOD The candlestick chart can be used to interpret the movement of markets from intraday out to a monthly chart format. The basic candlestick chart depicts the market open, high, low and close....
BY: Technical Analysis, Inc.
ARTICLE SYNOPSIS ...THE RSI AND THE RMI The formula for the relative strength index (RSI) is: RSI = 100((RS/(1+RS)) where: RS = AU/AD during the last X days AU = Yesterday's AU - (AU/X) + today's up close or zero AD = Yesterday's AD - (AD/X) + the absolute value of today's down close or zero ......
BY: Technical Analysis, Inc.
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...
BY: Thom HartleSUBJECT: Interview
ARTICLE SYNOPSIS ...The SOQ And The S&P 500 Settlement by Thomas Cronin R J. O'Brien research director and market letter writer Thomas Cronin marks his first appearance in STOCKS & COMMODITIES with some trade possibilities in options based on the difference between the closing price of the last trading day for the S&P futures and the opening price the next day of the S&P index. One of my favorite oddities in commodity trading is the unique situation that occurs quarterly in the Standard & Poor's 500 stock index futures and options, known as the special opening quotation (SOQ). The Chicago Mercantile Exchange (C...
BY: Thomas Cronin
ARTICLE SYNOPSIS ...Time And Indicator Design by Gilbert Raff Can indicators be improved upon by looking at them using different time frames to smooth and combine? STOCKS & COMMODITIES contributor Gilbert Raff proposes yes. Take a look. Here's an aspect of indicator design that increases trading efficiency, a concept that I call time redundancy. In three recent STOCKS & COMMODITIES articles on the KST indicator, author Martin Pring demonstrated the use of an indicator made up of the sum of three different rates of change (ROC) of momentum, each at a different time frame. Based on experience, I would say the suc...
BY: Gilbert Raff
ARTICLE SYNOPSIS ...TRADERS' TIPS MetaStock 3.0 Using the built-in stochastic function: MetaStock 3.0 users can use the built-in stochastic function to combine multiple-length stochastics as discussed by Stuart Meibuhrin the December STOCKS & COMMODITIES article ""Multiple-length stochastics."" For example, I built a custom formula as shown below: (stoch(30,15)+stoch(60,30)+stoch(90,45))/3 to use a combined 30-, 60- and 90-day stochastic. I smoothed the stochastic heavily to see the underlying trend. Users can try different combinations to identify important tops or bottoms. One example is Figure 1 using the ...
BY: Technical Analysis, Inc.