ARTICLE SYNOPSIS ...Interview: Elliot Wave Expers - Steven Hochberg & Peter Kendall Fibonacci numbers, fractal geometry, socionomics -- Ralph Nelson Elliott's wave theory was published 64 years ago, but he explored ideas that we still study today in physics, behavioral sciences, and, of course, investing. How do the concepts he examined translate to the markets -- and the world -- today? To find out, STOCKS & COMMODITIES Editor Jayanthi Gopalakrishnan and Staff Writer Dennis Peterson interviewed two experts on Elliott wave analysis, Steven Hochberg and Peter Kendall, in late August 2001. Steven Hochberg is the co-...
BY: Jayanthi Gopalakrishnan and Dennis PetersonSUBJECT: Interview
ARTICLE SYNOPSIS ...CANDLECODES AND BOLLINGER BANDS Editor, I liked very much Viktor Likhovidov's use of Bollinger Bands on an indicator in "Light Up Your Trading System With CandleCode Trading" (STOCKS & COMMODITIES, September 2001). Figure 5 on page 26 nicely demonstrates why this technique is so powerful. (Though I am leery -- as I always am of optimization -- of the optimized parameters used later in the article.) As Likhovidov astutely observes, fixed indicator levels rarely serve well. The markets evolve, and that evolution is portrayed in indicator action; this year, one set of levels serves well, while th...
BY: Technical Analysis, Inc.SUBJECT: Letters To S&C
BY: Hans Uhlig, Ph.D.SUBJECT: Trading Systems
BY: Jayanthi GopalakrishnanSUBJECT: Opening Position
ARTICLE SYNOPSIS ...Overbought/Oversold, With Covered Calls by Austin Passamonte Knowing when to buy and when to exit or how to protect equity plays is basic for long-term prosperity. Here is one way to do it using covered calls. Every stock trader should be ready and willing to write covered calls. They are a powerful tool for locking in partial gains and/or reducing cost basis. By the same token, writing covered calls as a specific trading method also holds great merit. Let's explore some scenarios for such tactics and see if they might add to your personal equity curve. MECHANICS OF TRADING COVERED CALLS O...
BY: Austin PassamonteSUBJECT: Options
ARTICLE SYNOPSIS ...Q&A by Don Bright SINCE YOU ASKED Professional trader Don Bright of Bright Trading, an equity trading corporation, answers a few of your questions. INDEX ARBITRAGE Don, I have enjoyed your commentaries in STOCKS & COMMODITIES. Can an individual buy a "basket" of stocks economically enough (say with your firm) in order to perform index arbitrage: selling futures versus buying cash and vice versa? "Spread trading" or hedged strategies appeal to me; what valid spreads do you teach or trust, and can an individual perform S&P or E-mini arbing almost as effectively as the floor traders or market...
BY: Don BrightSUBJECT: Q&A
ARTICLE SYNOPSIS ...Three Traders by Don Bright What makes them successful? What makes them fail? Here's how these three made it through the good times and the bad. When things are good, we often forget what the bad times were like until they hit again. When the bad times do hit, it's those who are diligent, persistent, and flexible who thrive. Impatience has no place. In past articles I examined the differences between professional, proprietary traders, and customers of a retail brokerage firm. This time, I would like to take you through the real-life experiences of three traders I know. You'll see what it tak...
BY: Don BrightSUBJECT: Real World
ARTICLE SYNOPSIS ...Trade Sector Funds With Pure Momentum by Jay Kaeppel In the July 1999 Technical Analysis of STOCKS & COMMODITIES, I wrote about one of the systems I use to trade Fidelity Select sector funds. That system was referred to as the relative strength system (or RS System for short). In this article, I will discuss another system that I use for trading sector funds. This one is referred to as the pure momentum system (or PM System). Like the RS System, the PM System holds a portfolio of up to five sector funds at any time. Because the PM System is similar to the RS System, the results tend to be hig...
BY: Jay KaeppelSUBJECT: Trading Systems
ARTICLE SYNOPSIS ...Traders' Resource: Hardware Hardware Hardware choices these days often boil down to getting the fastest processor and the most memory you can afford, to-gether with a cable connection or an-other high-bandwidth connection for quotes. Dual processors aren't too much for some of the software that's available for traders. The new LCD screens are much easier on the eyes, so pay up for those. That said, the vendors listed here can supply you with some tweaks, such as customized trading setups and multiple-monitor setups. Regarding multiple monitors, you'll probably want to have Windows 98 or late...
BY: Technical Analysis, Inc.SUBJECT: Traders' Resource
ARTICLE SYNOPSIS ...NEUROSHELL TRADER Hans Uhlig's nearest neighbor prediction (NNP) trading system presented in his article in this issue works by finding near neighbors of the reference pattern, and then averaging the next moves of the neighbors to get an estimate of the next move of the reference pattern. In the article, under the heading "Refinements," Uhlig outlines a method of improving the performance, wherein each neighbor is weighted in proportion to its distance. A further refinement he describes would be to apply different weights to individual elements of the pattern. Here's how to implement the NNP...
BY: Technical Analysis, Inc.SUBJECT: Traders' Tips
ARTICLE SYNOPSIS ...The Secrets Of Cycles And What They Can Reveal What Can Market Cycles Tell Us? by Tim W. Wood, CPA Everything in nature moves in cycles -- the solar system, the migration of geese, sleep patterns. Of more immediate interest to traders are cycles in the agricultural and financial markets. Cycle analysis is the one approach that can provide relatively accurate time and price projections. ""Usually, the effect of cycles is of only passing interest to market analysts and traders, unless the cycles in question are related to market prices and can be used to identify tops and bottoms of price movem...
BY: Tim W. Wood, CPASUBJECT: Cycles
ARTICLE SYNOPSIS ...Winning With Failure by Christopher Narcouzi Believe it or not, you can take advantage of failed patterns and profit handsomely. Have you ever bought a stock after it broke through the resistance line, only to see the price drop a few days later? Have you ever bought into a breakout from a reverse head and shoulders pattern, just to watch that breakout fail a few days later? If you had placed a stop, as recom-mended, your position would have closed out. But you don't have to stop there. In-stead, close your position and trade the stock in the opposite direction. Patterns form because the ma...
BY: Christopher NarcouziSUBJECT: Charting
ARTICLE SYNOPSIS ...Working Money: Interview: Laura Granger by David Penn How The Small Survive Laura Granger Of Oppenheimer Emerging Growth Fund When the going gets tough, do the small get growing? That's how Laura Granger, portfolio manager of OppenheimerFunds' new Emerging Growth Fund, sees it. At the helm of the fund since October 2000, Granger has parlayed her success in turning around underperforming mutual funds (she helped bring the Fortis Capital Appreciation Fund from the bleachers to the luxury boxes during the late 1990s) into some winning stockpicks for her emerging growth fund, including companie...
BY: David PennSUBJECT: Interview
ARTICLE SYNOPSIS ...Working Money: Resistance And Support by Dennis D. Peterson Do you want to profit in the market? Then you need to understand resistance and support levels. A resistance level is the ceiling price area that a stock repeatedly tries to break through above, but for reasons that will become clearer later, temporarily cannot. A support level is the counterpart to resistance, an area that a stock repeatedly tries to go below but temporarily cannot. After repeated attempts, the price will often finally rise above the resistance level or go below the support level. The most common resistance and su...
BY: Dennis D. PetersonSUBJECT: Investing
BY: Bruce R. FaberSUBJECT: Investing
ARTICLE SYNOPSIS ...Working Money: The Lazy Man's Guide To Long-Term Investing by R.M. Sidewitz Are you a buy-and-hold believer? Enhance your returns by using this simple technique. One of the major chall-enges for the long-term investor involves the amount of time and attention they have to devote to managing their portfolio. What with reading the financial pages, subscribing to x-number of magazines, and time spent online seeking new ideas and perspectives, it's easy to see how managing investments could evolve into a true part-time job. Wouldn't it be great if investors with a long-term outlook could have a...
BY: Roy M. Sidewitz, Ph.DSUBJECT: Investing