Article Archive For
JUL2002
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A Closer Look At Divergences by Clive Roffey, Ph.D.
ARTICLE SYNOPSIS ...A Closer Look At Divergences by Clive Roffey, Ph.D.
In 1972, the investor and
well-known goldbug James
Dines produced a 600-page
treatise called How The
Average Investor Can Use Technical Analysis For Stock
Profits. I regard this book,
unfortunately now out of print, as
comparable in the value of its
contribution to technical analysis to
the classic Technical Analysis Of
Stock Trends by Robert Edwards
and John Magee. If you can lay your
hands on Dines's work, you should.
The first major section, on the
application of group and crowd
psychology to stock market movement,
is especially valuable....
AUTHOR: Clive Roffey, Ph.D.DATE: JUL2002SUBJECT: Charting
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Analyze Net Positions by Jon D. Andersen
ARTICLE SYNOPSIS ...Analyze Net Positions by Jon D. Andersen
Commitment of tradersİ (COT) data has, for many
traders, been difficult to understand and apply.
This has largely been because access to usable
forms of the data has been limited, and analysis
techniques have been sparse. However, the COT
does provide useful information for understanding the
dynamics of the futures markets.
In this article I will offer examples of analysis techniques
for net positions between commercial, noncommercial (or
large speculator), and small traders. Plotting the difference
between the positions of these speculators provides ...
AUTHOR: Jon D. AndersenDATE: JUL2002SUBJECT: Trading Techniques
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Auction Market Theory And The Longer Time Frame by Donald Jones
ARTICLE SYNOPSIS ...Auction Market Theory And The Longer Time Frame by Donald Jones
Last issue, I provided an overview of Auction
Market Theory. Two important facts should
be kept in mind as I discuss the next stage,
applying the theory: First, markets are not
correlated on a day-to-day basis, and second,
markets are in a continuous cycle. The lack
of correlation precludes finding market condition from
yesterday's market, but you still need to know the market
condition to make trading decisions. You find out about
market condition from the Overlay Demand Curve.
MARKET CONDITION FROM OVERLAYS
As traders, we spe...
AUTHOR: Donald L. JonesDATE: JUL2002SUBJECT: New Techniques
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Books For Traders by Technical Analysis, Inc.
ARTICLE SYNOPSIS ...Books For Traders by Technical Analysis, Inc.
? The Options Workbook, second edition
? The ART of Risk Management: Alternative Risk Transfer,
Capital Structure, And The Coverage Of Insurance
And Capital Markets
? Bull's Eye Trading: A Trading Champion's Guide To Pinpointing Tops & Bottoms In Any Market
? CNBC Guide To Money & Markets: Everything You Need To Know About Your Finances And Investments
? The Financial Numbers Game: Detecting Creative
Accounting Practices
? The Investing Bible
? Single Stock Futures: The Complete Guide...
AUTHOR: Technical Analysis, Inc.DATE: JUL2002SUBJECT: Books for Traders
Explore Your Options by Tom Gentile
AUTHOR: Tom GentileDATE: JUL2002SUBJECT: Explore Your Options
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Fast Fourier Transformation by Amy Wu
ARTICLE SYNOPSIS ...Fast Fourier Transformation by Amy Wu
For a long time, Fourier transforms
were used mostly by engineers.
Transforms were used to study
sound waves, frequency
vibrations, and other repetitive
occurrences. Since then, Fourier transforms have been applied to a number of
other diverse fields. Aerospace engineers use
them to study a plane's wing-tip vibrations during
flight, while musicians use them to identify
patterns when strumming musical instruments.
It was only a matter of time before someone used
Fourier transforms for technical analysis,
specifically, a type of calculation called the fast
...
AUTHOR: Amy WuDATE: JUL2002SUBJECT: Cyclical Analysis
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How Does Rule 431 Affect Daytraders? by Paul Carlson
ARTICLE SYNOPSIS ...How Does Rule 431 Affect Daytraders? by Paul Carlson
Like me, many of you may have been
concerned when you received letters from
your brokers describing the new minimum
margin requirements of $25,000 for pattern
daytraders. In those letters, your brokers
described the definition of a pattern
daytrader as someone who made four day
trades in five days. While this definition might not classify
you as a daytrader per se, when you looked at your
account, you saw several occasions when you would have
triggered the rule had it been in effect at that time. You may
have only $5,000 or $10,000 in your ...
AUTHOR: Paul CarlsonDATE: JUL2002SUBJECT: Real World
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Interview: An Interview With Jake Bernstein by Jayanthi Gopalakrishnan
ARTICLE SYNOPSIS ...Interview: An Interview With Jake Bernstein by Jayanthi Gopalakrishnan
Cycles expert Jake Bernstein's analytical eye has seen the
tide of the markets ebb and flow for more than 30 years. Many
of the long-term social, political, and economic forecasts
Bernstein has published in the last two decades have come to
pass, including the interest rate top of the early 1980s, the
deflation of the 1980s and early 1990s, the Japanese economic
peak, the explosion in genetic engineering technology, the
interest rate lows of the mid-to late 1990s, the Gulf War, and
many more. He is president of MBH Commodi...
AUTHOR: Jayanthi GopalakrishnanDATE: JUL2002SUBJECT: Interview
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Letters To S&C
ARTICLE SYNOPSIS ...Letters To S&C
Editor,
This technical analysis business seems intriguing. Is the art and science of it developed and practiced by many? How long has TA been practiced?
MARK MCCLATCHEY, via e-mail
I credit Charles Dow with developing the first technical analysis system, which some call Dow theory. Dow was the cofounder of Dow Jones & Company and the first editor of The Wall Street Journal in 1889. The Dow Jones Industrial Average was first published in 1896.
Intellectual debate about the validity of technical versus fundamental analysis has gone on for more than a hundred years. From a pra...
AUTHOR: Technical Analysis, Inc.DATE: JUL2002SUBJECT: Letters To S&C
Opening Position by Jayanthi Gopalakrishnan
AUTHOR: Jayanthi GopalakrishnanDATE: JUL2002SUBJECT: Opening Position
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Q&A by Don Bright
ARTICLE SYNOPSIS ...Q&A by Don Bright
OPENING FAIR VALUE
I'm interested in what information or
data is needed to calculate opening fair
value for stocks, and how the calculations
are made. Any help would be
appreciated -- Matthew Murray
We use the fair value (FV) number
offered at www.programtrading.com
(there are other sources, but I find theirs
to be right on most of the time). We then
find where the spot price of the S&P
futures closed, add FV to it, and call this
number "Spinx" (this is an actual symbol
on some data vendors, like Neovest
FirstAlert)....continuded...
AUTHOR: Don BrightDATE: JUL2002SUBJECT: Q&A
Traders' Resource: Brokerages
AUTHOR: Technical Analysis, Inc.DATE: JUL2002SUBJECT: Traders' Resource
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Traders' Tips by Technical Analysis, Inc.
ARTICLE SYNOPSIS ...Traders' Tips by Technical Analysis, Inc.
METASTOCK: DIVERGENCE FORMULAS
I've seen many divergence formulas written for MetaStock,
but in my opinion, none of them work well. Here, I'll present
a divergence formula for MetaStock using RSI(14) and the
close. I'll also introduce another divergence formula, which
I call double successive divergence (DSD)....
AUTHOR: Technical Analysis, Inc.DATE: JUL2002SUBJECT: Traders' Tips
Websites For Traders: PaperTradeFutures.com by David Penn
AUTHOR: David PennDATE: JUL2002SUBJECT: Websites For Traders
Websites For Traders: www.Moneynet.com by Jayanthi Gopalakrishnan
AUTHOR: Jayanthi GopalakrishnanDATE: JUL2002SUBJECT: Websites For Traders
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Working Money: How Dow Theory Works by Andrew Hetherington
ARTICLE SYNOPSIS ...Working Money: How Dow Theory Works by Andrew Hetherington
The Dow Jones Industrial Average (DJIA) is an index
of the price fluctuations and volume for 30 bluechip
equities. The DJIA's companion index is the
Dow Jones Transportation Average (DJTA), which is made up of freight, airline, courier, trucking, and rail
equities.
According to Dow theory, the DJTA confirms the
movements of the DJIA. This confirmation usually lags after
the DJIA has already completed its move. However, there are
times when the two move almost in tandem....
AUTHOR: Andrew HetheringtonDATE: JUL2002SUBJECT: Dow Theory
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Working Money: Recognizing Elliott Wave Patterns by Rudy Teseo
ARTICLE SYNOPSIS ...Working Money: Recognizing Elliott Wave Patterns by Rudy Teseo
Part I discussed the basic wave
patterns: impulse and corrective. Part
II will describe the patterns that must
be recognized in order to do a thorough
job of Elliott wave (EW) analysis.
The following examples by no means
include all the patterns you will
encounter in your Elliott wave
analysis, but represent those that
appear most often. You need to know
not only to what price levels the market
will rise, but also what patterns to
expect in your bar (candle) chart.
The two main Elliott waves are
motive and corrective. The motive
...
AUTHOR: Rudy TeseoDATE: JUL2002SUBJECT: Novice Traders' Notebook
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Working Money: That '70s Show by David Penn
ARTICLE SYNOPSIS ...Working Money: That '70s Show by David Penn
These must be confounding times for those who have
spent the past five years alerting the investing public to
dangers of deflation. Deflation -- the process through
which a currency becomes overvalued relative to goods and
services available, resulting in a decline in pricing power --
was the last phase of the disinflation wave that began in the
early 1980s as the chronic inflation of the 1970s was finally
eliminated from the US economy. Most evident in the bearish
commodities markets, deflation and its discontents (increased
burdens for debtors, for ...
AUTHOR: David PennDATE: JUL2002SUBJECT: Market Update
Working Money: Trading The QQQ by Don Miller
AUTHOR: Don MillerDATE: JUL2002SUBJECT: Novice Traders' Notebook
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Zero-Lag Data Smoothers by John F. Ehlers
ARTICLE SYNOPSIS ...Zero-Lag Data Smoothers by John Ehlers
Here's a technique that can reduce lag to nearly zero.
A causal filter can never predict the future.
As a matter of fact, the laws of nature
demand that all filters must have lag.
However, if we assume steady-state
conditions -- that is, no new, disturbing events -- there are techniques we can use to reduce
the lag of these filters to nearly zero. It turns out that
such filters are useful for technical analysts with
which to smooth data, and perhaps create some fast-
acting indicators. This is possible because the steadystate
assumptions are almost, but n...
AUTHOR: John F. EhlersDATE: JUL2002SUBJECT: Trading Systems