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• Black Monday Postscript by Technical Analysis, Inc.

  ARTICLE SYNOPSIS ...Black Monday Postscript by Technical Analysis, Inc. The record plunge that took the Dow Jones Industrial Average to 1738.7 on Monday, October 19,1987 will replay itself in the nightmares of traders for many years to come. However, most technicians saw it coming and followed their indicators onto the sidelines well before the carnage started. On the day after the fall, when volatility was extraordinary and the trading floor was still bloody, we called some of the top technical analysts to inquire after their financial health. They were, without exception, watching the Exchange from a safe dist...

AUTHOR: Technical Analysis, Inc.DATE: DEC1987

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• Cycles without tears by Hans Hannula, Ph.D.

  ARTICLE SYNOPSIS ...Cycles without tears by Hans Hannula, Ph.D. No doubt you have seen the ad in The Wall Street Journal for the book Math Without Tears . Well, this is how to find cycles without math and, therefore, without tears. Even though I have done a lot of technical work on cycles (See Stocks & Commodities, ""In Search of the Cause of Cycles,"" March 1987), I still find the required mathematical skills are difficult for many people. Further, a lot of the mathematical techniques used to find cycles are tricky in that they require a great deal of care to produce valid results. Most techniques also cannot t...

AUTHOR: Hans Hannula, Ph.D., RSA, CTADATE: DEC1987

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• Flaws in the roulette wheel by Curtis McKallip, Jr.

  ARTICLE SYNOPSIS ...Flaws in the roulette wheel by Curtis McKallip, Jr. Few games of chance are perfectly random. To the extent they are NOT, profit may be made by betting on those states which occur with greater than random frequency and against those which occur with less than random frequency. In the late 19th century, William Jaggers, a British engineer, hired six men to write down the winning numbers on a roulette wheel for a month of play. By identifying the numbers which came up with greater-than-random frequency and then betting on them, he earned a profit of 1.5 million francs. The anomalous numbers wer...

AUTHOR: Curtis McKallip, Jr.DATE: DEC1987

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In This Issue by John Sweeney, Editor

AUTHOR: John SweeneyDATE: DEC1987

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• Letters to S&C by Technical Analysis, Inc.

  ARTICLE SYNOPSIS ...Letters to S&C by Technical Analysis, Inc. Not Ready for IBM Editor, Do you know of any program for MACD, either in the conventional form or modified form (Gregory Morris, Stocks & Commodities, February 1987) that is available in BASIC for the IBM and is compatible with the program that you and John Ehlers have written? I want to be able to bring up the MACD in to do is to be able to bring up MACD in histogram form on a split screen with a standard bar chart above it, incorporated in Ehlers system. I would also like to thank you for your kind suggestion that I get an IBM AT instead of an XT...

AUTHOR: Technical Analysis, Inc.DATE: DEC1987

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• Market Profile and market logic Part 1 by Thomas P. Drinka and Robert L. McNutt

  ARTICLE SYNOPSIS ...Market Profile and market logic Part 1 by Thomas P. Drinka and Robert L. McNutt Following more than four years of development by J. Peter Steidlmayer and the Chicago Board of Trade, the CBOT Market Profile and Liquidity Data Bank went online in 1985. With the availability of the real-time representation of market activity, the general public now has access to market-generated information which previously had been available only to individuals who traded on exchange floors. As a result, it is now possible to get the ""feel of a market"" without being in the trading pit. The purpose of this ar...

AUTHOR: Thomas P. Drinka and Robert L. McNuttDATE: DEC1987

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• Market strategy The Wyckoff method of trading: Part 15 by Jack K. Hutson

  ARTICLE SYNOPSIS ...Market strategy The Wyckoff method of trading: Part 15 by Jack K. Hutson The reasoning behind Richard D. Wyckoff''s classic method of chart analysis is simple and straightforward: when demand for a stock exceeds supply, prices rise; when supply is greater than demand, prices decline. The goal of this method is to make the most efficient use of investment capital by selecting only issues that will move soonest, fastest and farthest in any market and by timing trades to capture those moves. The Wyckoff Method accomplishes this by working in harmony with the market's buying and selling waves, n...

AUTHOR: Jack K. HutsonDATE: DEC1987

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• On tips and tipsters by Vincent Cosentino

  ARTICLE SYNOPSIS ...On tips and tipsters by Vincent Cosentino Charles Schwab, of discount brokerage fame, was quoted as saying: ""I don't give (stock) tips."" While Mr. Schwab may not, it seems just about everybody else does. Turn on your TV, pick up the local newspaper, glance through a business magazine and somebody is recommending some stock. Provocatively entitled columns such as ""Heard On The Street"" and ""Inside Wall Street"" bespeak the imminent disclosure of furtively gained confidences from Wall Street's most inaccessible files. Journalistic puffs of steam? Or, are we really going to see fire and lav...

AUTHOR: Vincent CosentinoDATE: DEC1987

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• Price/Volume Cross-Correlations in the DJIA by Frank Tarkany

  ARTICLE SYNOPSIS ...Price/Volume Cross-Correlations in the DJIA by Frank Tarkany This article examines the use of a Price Percent Filter (PPF) on daily Dow Jones Industrial Average (DJIA) closing prices from January 2, 1897 to January 2, 1987. Price changes from the filter are cross-correlated with their corresponding New York Stock Exchange (NYSE) total volume changes. The correlation coefficient and chi-square statistics results from June 13, 1949 to January 2, 1987 indicate good price/volume cross-correlations. Analysis A Price Percent Filter selects dates when the percentageof price change from a previous ...

AUTHOR: Frank TarkanyDATE: DEC1987

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• Spread investing Part 4 by Frank Taucher

  ARTICLE SYNOPSIS ...Spread investing Part 4 by Frank Taucher What if you have no interest in trading spreads, but prefer to trade outright commodity contracts? Could you use the same principles developed in the spread investing program laid out in this series of articles and apply them to trades in individual futures contracts? The answer to the above question is ""yes."" I use the same two tools in analyzing outright seasonals as I do analyzing spread seasonals. These tools are the quarter-month seasonal trade analysis and seasonal history printout. What we are specifically attempting to uncover is the cream-o...

AUTHOR: Frank TaucherDATE: DEC1987

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• The danger in profits by Van K. Tharp, Ph.D.

  ARTICLE SYNOPSIS ...The danger in profits by Van K. Tharp, Ph.D. Have you ever wondered why you can paper trade successfully, but fail miserably when real money is at stake? The reason is simple. The trader who concentrates on profits will have difficulty winning, as will the investor who concentrates on losses. Frank, for example, wants to make a killing in a speculative stock. He pays $5,000 for the stock. It immediately goes to $5,900, so he sells it. His profit of about $800 after commissions is a nice return for a few days work. A week later the stock is worth $6,500 and within six weeks it doubles. Frank ...

AUTHOR: Van K. Tharp, Ph.D.DATE: DEC1987