ARTICLE SYNOPSIS ...A Twist On The Arms Index by Harley D. Wilbur The Arms index, which was originally known as TRIN (for trading index), utilizes up and down volume and advancing and declining issues for calculation. The indicator, which aims to identify possible turning points in the stock market, has been studied keenly since its introduction. Here, Harley Wilbur presents a new version of this indicator, bruised and battered but still standing in the field of trading battle. I have long been fascinated with the Arms index, also known as the TRIN indicator. I was introduced to it in the early 1970s when it h...
BY: Harley D. Wilbur
ARTICLE SYNOPSIS ...Candlesticks As A Leading Indicator by Gary S. Wagner and Bradley L. Matheny Most technical indicators are coincident with the market - that is, the indicators do not forecast market turns but only turn if the market turns. Certain candlestick formations, on the other hand, can forecast market reversals. Consequently, combining candlestick formations with traditional technical indicators such as oscillators should lead to better trading performance. Western technical analysis encompasses many different types of mathematical calculations, but many can best be described as lagging indicators....
BY: Gary S. Wagner and Bradley L. Matheny
ARTICLE SYNOPSIS ...Fine Tuning Oscillators by Ed Downs The conventional wisdom in technical trading systems implies that for a trading system to be reliable, it should work across all markets and all time frames. Here are some potential reasons why it's difficult to find a single trading system that works all the time for all markets, and how optimized oscillators can be used to overcome these problems and build a sound trading plan. It is a given that each stock has its own unique collection of primary participants (buyers/sellers), its own appeal (industry) and its own market strength (shares outstanding). I...
BY: Ed Downs
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...
BY: Thom Hartle
ARTICLE SYNOPSIS ...Gold And The U.S. Dollar by John J. Murphy Last month, intermarket analyst and veteran technician John Murphy explored the relationship between interest rates and the U.S. dollar. This month, he progresses to the interrelationship between the U.S. dollar and gold. Last time, I showed that the U.S. dollar moves in the opposite direction of interest rate futures prices. At some point, however, the falling dollar will reawaken inflation pressures. One of the first hints of inflation -- or disinflation -- usually comes from the gold market, due to the strong historical link between the gold marke...
BY: John J. Murphy
ARTICLE SYNOPSIS ...KST And Relative Strength by Martin J. Pring In previous articles, technician and author Martin Pring has analyzed the KST indicator, an oscillator designed to identify market turns based on time cycles. This month, he explains how to use the KST in gauging the relative strength of stocks. In the September STOCKS & COMMODITIES, I introduced the KST, a momentum indicator constructed m a weighted summed rate of change. To recap, four different smoothed rates of change (ROC) are combined into one oscillator. This captures the under lying price movements of several different market cycles as ref...
BY: Martin J. Pring
ARTICLE SYNOPSIS ...AN MACD VARIATION by Technical Analysis, Inc. The method used is a variation of the original moving average convergence/divergence (MACD) indicator. Longer-term exponentially smoothed moving averages (EMA) have been used in the calculation of the MACD. The new smoothing constants a are 0.0299 and 0.0589, which approximate a 66-week simple moving average and a 33-week simple moving average, respectively....
BY: Technical Analysis, Inc.
ARTICLE SYNOPSIS ...Calculating the KST by Techncial Analysis, Inc. KST formulas for short, intermediate, and long term daily or weekly data....
BY: Technical Analysis, Inc.
ARTICLE SYNOPSIS ...OSCILLATOR TRADING SYSTEMS DEFINED by Technical Analysis, Inc. An oscillator is an indicator that moves back and forth between two limits. Most oscillators, such as stochastics, relative strength index and commodity channel index, are defined so that they range between 0 and 100 or -100 and +100. Usually, an oscillator is interpreted by watching for crossovers; that is, when the indicator crosses a given level (such as 20 or 80 for stochastics), a buy or sell signal is generated. The problem with crossover systems is that they are usually late -- by the time the indicator penetrates the trigge...
BY: Technical Analysis, Inc.
ARTICLE SYNOPSIS ...WEIGHTED AVERAGE TRIN10 by Technical Analysis, Inc. The steps for calculating WTRIN10 begin with the calculation of the open TRIN10 (column G). The 10-day moving average of the individual day's value of the number of advancing shares (column C), number of declining shares (column D), advancing volume (column E) and declining volume (column F) are used to calculate the open TRIN10....
BY: Technical Analysis, Inc.
ARTICLE SYNOPSIS ...Sentiment And Trendlines For Bond Fund Trading by Joe Duarte The Hines ratio, a key sentiment indicator, is designed to help traders pinpoint emotional extremes in the bond market. Here, the Hines ratio is combined with Barron's Bond Bullish Consensus, classic trendline and retracement analysis to help traders identify buying and selling points for the intermediate term. The Hines ratio is a modified put/call ratio that refines traditional option ratio analysis by including the open interest figures in the equation. I use the options volume and open interest figures found in Barron's futures...
BY: Joe Duarte, M.D.
ARTICLE SYNOPSIS ...Stocks, Interest Rates And The MACD by Kent Perkers The notion that markets are interlinked is gaining widespread acceptance. However, the technique of timing trades in one market based on the price direction of another market still requires further fine tuning. Here, the moving average convergence/divergence (MACD) is presented as a method with which to identify the trend of interest rates that will in turn signal the coming trend in stocks. The importance of changes in interest rates and their impact on equity markets has long been recognized by astute fundamental and technical analysts. T...
BY: Kent Perkers
ARTICLE SYNOPSIS ...The Gann Quarterly Swing Chart And Trend Duration by Jerry Favors The Gann quarterly swing chart - which is a trend-following indicator and not a trading system as presented in the August Stocks & Commodities - is best used as a compliment with other analyses like most individual indicators. Here, Jerry Favors of ""The Favors Analysis"" newsletter delves into detail about what the indicator can and cannot do. The Gann quarterly chart is a tool that all readers can use with relative ease, but you must know the correct rules for its construction and interpretation. To begin, the quarterly swin...
BY: Jerry Favors
ARTICLE SYNOPSIS ...Traders' Tips by Technical Analysis, Inc. MICROSOFT EXCEL 3.0 Here's a method to calculate and plot a trendline from the data in a spreadsheet. A trendline is a straight line that is a plot of rise over run. The run calculation is easy to do because the run is equidistant between the values on the X-axis (time). Finding the rise requires identifying the difference between the two highest points (for a downward trendline) or the two lowest points (for an uptrend). Excel can locate these values. Our example will be for a downward trendline (Figure 1). The first step is to plot the data (such a...
BY: Technical Analysis, Inc.
ARTICLE SYNOPSIS ...Using Neural Nets For Intermarket Analysis by John Kean Changes in Treasury bill yields, Treasury bond yields, gold and the U.S. dollar affect the stock market in subtle but predictable ways. These are complex and challenging relationships to decipher - tasks well suited to the abilities of neural networks, since neural nets are designed to detect patterns in relationships. Here, systems analyst John Kean presents his work on utilizing a neural network for researching intermarket relationships. Watching changes in market prices and interest rates may suggest that hidden somewhere in these s...
BY: John Kean