ARTICLE SYNOPSIS ...Daily stock tendencies
by L. R. James
Most of us who have done a substantial amount of stock trading would agree that the broad market
does a lot of funny things. In theory, the stock market is a vast, highly efficient mechanism that takes in
information, evaluates it and adjusts its pricing according to its consensus opinion of the future. Over the
longer term, that's basically what it does. However, over shorter periods of time, there are some
interesting quirks in the way the market operates.
One of the more interesting of these departures from efficiency involves changes in stock prices ...
ARTICLE SYNOPSIS ...Large block transactions
by Arthur Merrill
Here is an indicator that reveals the direction of enthusiasm of the big operators. Are they reaching for
stock, even at higher prices? Or, on the other hand are they eager to unload, even at lower prices? The big
operators are usually the most informed traders; we should pay heed to their actions.
The source data for this indicator each week is a summary table in Barron's. All big trades on the New
York Stock exchange are noted, and the number of upticks, downticks and unchanged are counted and
reported. The trades are separated into two categories...
ARTICLE SYNOPSIS ...Opening Range Breakout
by Toby Crabel
Bear hook is a day in which the open is below the previous day's low and the close is above the
previous day's close with a narrow range relative to the previous day (Figure 1). As implied by the name,
there is a tendency for prices following a bear hook pattern to move to the downside.
Figure 2 tabulates how this downward tendency after the pattern manifests itself in different markets and
with a variety of opening range breakout (ORB) trades taken the day after the pattern appeared.
Figure 3 charts the bear hook patterns for December T-bonds. N...
ARTICLE SYNOPSIS ...Riding the Beast
by Jean Dilling
I remember the first time I rode the ""Beast,"" the largest, scariest roller coaster ride at King's Island
amusement park. When I got off, I swore that never would I ride again. A few hours later, I was back in
line, ticket in hand, ready to challenge the beast one more time. How ironic that I should compare trading
commodities to riding the Beast.
July 18, 1988, Monday: A young broker named Randy called to tempt me into buying silver. I would
have usually cut a phone salesman off but he was very pleasant, more informative than pushy, and I
found myself very ...
ARTICLE SYNOPSIS ...Simple moving average crossover
by Peter Aan
Editor's note:In this issue, Peter Aan reports on the first of his tests of different trading systems. He
begins with probably the most widely known trading system.
Trend following, always in the market.
Rules and Formulas: The moving average crossover method calculates two moving averages, each
based on a different number of days of trading data (Figure 1).
When the shorter-term (fewer days) average crosses above the longer-term average from below, this is
a buy signal for tomorrow's open. When the sho...
ARTICLE SYNOPSIS ...Speeding up the oscillator
by Grady Garrett
In 1986, I began a study of Standard & Poor's 100-stock Index (OEX) in search of a reliable mechanical
trading indicator. This was a volatile time for the OEX-- the bull market was getting its second wind and
I idealistically looked for something to help pick tops and bottoms.
A popular and time-tested study is the moving average oscillator, which is simply a histogram of the
difference between a fast (shorter-period) moving average and a slow (longer-period) moving average,
either simple or exponential.
The classic method to trade the oscillator i...
The secret of trading success: COMMITMENT by Van K. Tharp, Ph.D.
ARTICLE SYNOPSIS ...The secret of trading success: COMMITMENT
by Van K. Tharp, Ph.D.
Jack had a successful business, but he wanted to be a trader. Still, he wasn't willing to give up his
annual $75,000 salary until he was certain he could be successful as a trader. So, he just dabbled in the
markets, waiting to find the magic secret. He tried different brokers, advisors, software programs and
systems. But it was always the same result--he never made enough money.
One day, Jack discovered the name of a trader who had made consistent and large profits in the markets
for over 30 years. He learned this trader would ...
U.S. Treasury auctions and technical analysis by Gerald S. Celaya
ARTICLE SYNOPSIS ...U.S. Treasury auctions and technical analysis
by Gerald S. Celaya
The auction process in the Treasury bond market creates a problem for technical analysts--the newly
auctioned issue has none of the historical price data needed for technical analysis and prices for the new
bond are usually quite different from prices of the old bond due to different maturities and coupons.
Charts, as well as databases, are affected by the bond auction. Technical indicators--trend-following or
momentum oscillators--require historical data. Thus, the lack of data limits the usefulness of most
technical trading sys...
ARTICLE SYNOPSIS ...Windows of opportunity
by Douglas Arend
Entering a commodities position typically is a two-step process. First, a decision must be made on the
expected direction of the market. This is the set-up. Next, some method for timing the entry is required.
I'll refer to this as the signal. Certain indicators and techniques are inherently better suited for the set-up,
while others tend to perform well as signals. The key is to separate these functions and select methods
which have proven themselves over time.
My approach is to identify an expected direction in the market lasting from several days to ...