STOCKS & COMMODITIES magazine. The Traders' Magazine

Article Archive For APR1991

  • All By His Elf: Robert Nurock by Thom Hartle

    ARTICLE SYNOPSIS ...All By His Elf: Robert Nurock by Thom Hartle The most money is made in the market by those who are able to identify trends early and stick with them -- not trade out of issues just because they've gone theoretically too far, too fast."" -- Robert Nurock Robert Nurock is perhaps best known for his 19-year sojourn on the Wall Street Week TV program. He decided, in October last year, to resign as panelist and ""Chief Elf "" on the respected financial show to concentrate on his own research. Nurock spoke with STOCKS & COMMODITIES Editor Thom Hartle via telephone on Tuesday, February 5, 1991. To s...

  • Back To Averages by John Sweeney

    ARTICLE SYNOPSIS ...Back To Averages by John Sweeney Getting back to the subject of averages skimming tops and bottoms of price curves (Settlement, STOCKS & COMMODITIES, February 1991), two readers, C. Skelley of Tucson, AZ, and John Ehlers of Goleta, CA, wrote to explain things to me. In that column, I tried to estimate roughly the effects on an average of lag and attenuation 2 --two factors that positioned the averages along the tops and bottoms of price curves. Skelley pointed out J.M. Hurst's Profit Magic of Stock Transaction Timing, appendix 4, wherein Hurst estimated the effects for a centered moving avera...

  • Calculating Momentum A New Way by Darryl W. Maddox

    ARTICLE SYNOPSIS ...Calculating Momentum A New Way by Darryl W. Maddox Traditionally, the calculation of market momentum has been a difference calculation. Thus, a momentum indicator for the Dow Jones Industrial Average is calculated by subtracting the closing value on one date from the closing value on some later date and by doing so, momentum curves are constructed for various time frames ranging from a few days to a few months. Calling the result of a difference calculation ""momentum"" has bothered me since I started to learn about the market. Having been trained in physics, I thought a momentum indicator s...

  • Elliott Wave And Gold by Horatio Miller

    ARTICLE SYNOPSIS ...Elliott Wave And Gold by Horatio Miller Ask any Elliott Wave analyst about the outlook for gold, and he will without doubt say that the precious metal is on its way down to the $100-200 range. A divergent-Elliott Wave interpretation, however, suggests that over the near term, gold will rally to the area between $633.78 and $662.29. This hypothesis is supported by a wave count that classifies the 1980-90 drop in the price of gold as an unfinished zigzag correction. Within this interpretation, cycle wave A of the zigzag ended when London gold fell to $284 on February 25, 1985. Cycle wave B of ...

  • Financial Volume Index And Volume Analysis by Patrick Cifaldi, C.M.T.

    ARTICLE SYNOPSIS ...Financial Volume Index And Volume Analysis by Patrick Cifaldi, C.M.T. In technical analysis, the study of volume is one of the most overlooked and underrated disciplines. In the general study of the supply and demand of markets, only two pieces of data are recordable: One is price data, while the other is volume data. Open interest is regarded by some as a third, but in many ways it is really a record of the outstanding potential volume. But most articles and research written and performed relates only to price analysis. Such an oversight is not unlike designing a great automobile--without eng...

  • Looking At 10-Year Stock Price Patterns by Lewis Carl Mokrasch, Ph.D.

    ARTICLE SYNOPSIS ...Looking At 10-Year Stock Price Patterns by Lewis Carl Mokrasch, Ph.D. Many temporal cycles have some influence on the stock and commodity markets. One, the decennial pattern, receives more attention near the beginning and end of decades. Studying stock market price patterns anew presents some new conclusions. From a report written by actuary W.S. Jevons in 1884, economist E.L. Smith obtained the critical clue he had sought concerning the cyclical behavior of investment instruments. In the early 1930s, cycles of nine and 11 years dominated the thinking of naturalists, because of such natural ...

  • Merrill Directional Patterns by Arthur A. Merrill, C.M.T.

    ARTICLE SYNOPSIS ...Merrill Directional Patterns by Arthur A. Merrill, C.M.T. Can we get clues to price performance from the swings of prices in the last hours of the preceding day? If we ignore volume and the amount of change, the direction of the swings of prices can be summarized by a simple plus or minus and analysis is simplified. I've modestly (!) labeled the classification ""Merrill directional patterns,"" in hopes of some immortality. If we consider the direction of the swings in the last four hours, there are 16 possible patterns (Figure 1). If we consider only the last three hours, there are eight pos...

  • Price As A Trading Tool by Robert Miner

    ARTICLE SYNOPSIS ...Price As A Trading Tool by Robert Miner A complete approach to trading requires the trader to analyze the market from all perspectives. The three important dimensions of market activity are time, price and pattern. If a trader does not include all three perspectives of market activity as part of his analysis, trading is likely to suffer. Price relationships indicate in advance narrow price zones that are particularly important to any individual market. Every trader should be aware of three important price relationships relative to market activity: Price Cycle Ratios, swing price relationships...

  • RSI As An Exit Tool by David Cartwright

    ARTICLE SYNOPSIS ...RSI As An Exit Tool by David Cartwright Over the past 12 years of futures trading, I have taken a singular approach to the use of the relative strength index (see sidebar, ""RSI""). I have discovered that RSI is unreliable for market entry. For exiting the market, however, the index can be very impressive. For traders who take multiple contracts in a futures market, using RSI can be even more dynamic. It is a common practice for traders to use a trailing stop order to protect profits on positions that are working in their favor. Many traders will use a simple moving average to locate the are...

  • SIDEBAR: EXPERT SYSTEMS, FUZZY OR CRISP

    ARTICLE SYNOPSIS ...EXPERT SYSTEMS, FUZZY OR CRISP Expert systems in the form of if?then rules, page 165....

  • SIDEBAR: FLDJ: ANALYSIS OF DAILY WSJ STATISTICS

    ARTICLE SYNOPSIS ...FLDJ: ANALYSIS OF DAILY WSJ STATISTICS Data available from the Wall St. Journal that can be used in a fuzzy logic system, page 164....

  • SIDEBAR: INDICATORS GALORE

    ARTICLE SYNOPSIS ...INDICATORS GALORE --Thom Hartle, Editor Listing of indicators used in a neural network, page 138....

  • SIDEBAR: THE ELLIOTT WAVE ZIGZAG FORMATION

    ARTICLE SYNOPSIS ...THE ELLIOTT WAVE ZIGZAG FORMATION --Thom Hartle, Editor An explanation of subdivisions of the Elliott Wave pattern, page 173....

  • SIDEBAR: THE VOLUME INDEX AND ON-BALANCE VOLUME

    ARTICLE SYNOPSIS ...THE VOLUME INDEX AND ON-BALANCE VOLUME --Thom Hartle A leading and confirming indicator, page 170....

  • Using A Constant False Alarm Rate In Trading by John Ehlers

    ARTICLE SYNOPSIS ...Using A Constant False Alarm Rate In Trading by John Ehlers Modern information theory has existed for the last half century or so. This theory has been responsible for man significant scientific advances, including recovery of photograph taken in deep space, pinpoint accuracy of missile guidance and speech synthesis. With such a track record, why couldn't technical traders apply some principles of information theory to trading methodology? Let's examine a trading decision method using some of information theory's fundamental concepts. First of all, trading involves value judgments. One examp...

  • Using Fuzzy Logic in Expert Systems by James F. Derry

    ARTICLE SYNOPSIS ...Using Fuzzy Logic in Expert Systems by James F. Derry Stock market followers assess the market environment with numerous technical indicators. For the most part, these indicators are rarely definitively bullish or bearish. It is rare that an indicator can be considered to have ""crisp"" values, such as true or false. More accurately, a technical indicator is considered --as the term might imply--to be an indication of a situation, not a black-or-white statement of some fact. Artificial intelligence researchers deal with this lack of a clear-cut conclusion with the concept of fuzzy logic. Fuzzy ...

  • Using Neural Nets In Market Analysis by Mark B. Fishman, Dean S. Barr and Walter J. Loick

    ARTICLE SYNOPSIS ...Can neural networks aid traders? By Mark B. Fishman, Dean S. Barr and Walter J. Loick Neural networks are the newest form of artificial intelligence technology to make its way into market analysis. Neural networks, also referred to as neural nets, mimic the human brain's most powerful ability, that of pattern recognition. The neural net can make a decision or a prediction by drawing on an inventory of patterns previously learned, seeking the one most relevant to the current situation. What distinguishes neural nets, moreover, from ""classical"" AI paradigms such as that of rule-based systems ...

  • Using The Arms Index In Intraday Applications by Richard W. Arms Jr.

    ARTICLE SYNOPSIS ...Using The Arms Index In Intraday Applications by Richard W. Arms Jr. A few weeks ago, I received a call from an analyst who had read a number of my recent articles in STOCKS & COMMODITIES and had an interesting question. ""I've developed a new index to measure the market and want to know how I can have it named after me,"" he said. My somewhat facetious advice was, ""All you need to do is wait about a quarter century, have a lot of luck and have some very good friends!"" I wish I could have been more helpful to the gentleman, but there really was no better answer. He was referring, of course...

  • V.9:4 (160-162) SIDEBAR: RSI

    ARTICLE SYNOPSIS ...RSI --Thom Hartle, Editor Formula and explanation of the RSI, relative strength index, page 160....

  • Wyckoff: Buying And Selling Tests by Craig F. Schroeder

    ARTICLE SYNOPSIS ...Wyckoff: Buying And Selling Tests by Craig F. Schroeder In the Richard D. Wyckoff method on stock market science and techniques, the fourth step of his approach is explained thus: Determine each stock's readiness to move, then analyze the vertical line chart and figure chart of the candidates previously selected by the use of buying and selling tests. The first three steps of the Wyckoff method are simple and easy to apply. Step four can also be simply stated. Hidden behind the simplicity in this case, however, is a wide range of considerations to be addressed, most of which require the use ...







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