JUN 1989 STOCKS & COMMODITIES Magazine

Article Archive For JUN1989

Daily stock tendencies by L. R. James

ARTICLE SYNOPSIS ...Daily stock tendencies by L. R. James Most of us who have done a substantial amount of stock trading would agree that the broad market does a lot of funny things. In theory, the stock market is a vast, highly efficient mechanism that takes in information, evaluates it and adjusts its pricing according to its consensus opinion of the future. Over the longer term, that's basically what it does. However, over shorter periods of time, there are some interesting quirks in the way the market operates. One of the more interesting of these departures from efficiency involves changes in stock prices ...

AUTHOR: L. R. JamesDATE: JUN1989

Large block transactions by Arthur Merrill

ARTICLE SYNOPSIS ...Large block transactions by Arthur Merrill Here is an indicator that reveals the direction of enthusiasm of the big operators. Are they reaching for stock, even at higher prices? Or, on the other hand are they eager to unload, even at lower prices? The big operators are usually the most informed traders; we should pay heed to their actions. The source data for this indicator each week is a summary table in Barron's. All big trades on the New York Stock exchange are noted, and the number of upticks, downticks and unchanged are counted and reported. The trades are separated into two categories...

AUTHOR: Arthur A. Merrill, C.M.T.DATE: JUN1989

AUTHOR: Technical Analysis, Inc.DATE: JUN1989

Opening Range Breakout Part 7 by Toby Crabel

ARTICLE SYNOPSIS ...Opening Range Breakout Part 7 by Toby Crabel Bear hook is a day in which the open is below the previous day's low and the close is above the previous day's close with a narrow range relative to the previous day (Figure 1). As implied by the name, there is a tendency for prices following a bear hook pattern to move to the downside. Figure 2 tabulates how this downward tendency after the pattern manifests itself in different markets and with a variety of opening range breakout (ORB) trades taken the day after the pattern appeared. Figure 3 charts the bear hook patterns for December T-bonds. N...

AUTHOR: Toby CrabelDATE: JUN1989

Riding the Beast by Jean Dilling

ARTICLE SYNOPSIS ...Riding the Beast by Jean Dilling I remember the first time I rode the ""Beast,"" the largest, scariest roller coaster ride at King's Island amusement park. When I got off, I swore that never would I ride again. A few hours later, I was back in line, ticket in hand, ready to challenge the beast one more time. How ironic that I should compare trading commodities to riding the Beast. July 18, 1988, Monday: A young broker named Randy called to tempt me into buying silver. I would have usually cut a phone salesman off but he was very pleasant, more informative than pushy, and I found myself very ...

AUTHOR: Jean DillingDATE: JUN1989

Simple moving average crossover by Peter Aan

ARTICLE SYNOPSIS ...Simple moving average crossover by Peter Aan Editor's note:In this issue, Peter Aan reports on the first of his tests of different trading systems. He begins with probably the most widely known trading system. General Description: Trend following, always in the market. Originator: Unknown Rules and Formulas: The moving average crossover method calculates two moving averages, each based on a different number of days of trading data (Figure 1). When the shorter-term (fewer days) average crosses above the longer-term average from below, this is a buy signal for tomorrow's open. When the sho...

AUTHOR: Peter AanDATE: JUN1989

Speeding up the oscillator by Grady Garrett

ARTICLE SYNOPSIS ...Speeding up the oscillator by Grady Garrett In 1986, I began a study of Standard & Poor's 100-stock Index (OEX) in search of a reliable mechanical trading indicator. This was a volatile time for the OEX-- the bull market was getting its second wind and I idealistically looked for something to help pick tops and bottoms. A popular and time-tested study is the moving average oscillator, which is simply a histogram of the difference between a fast (shorter-period) moving average and a slow (longer-period) moving average, either simple or exponential. The classic method to trade the oscillator i...

AUTHOR: Grady GarrettDATE: JUN1989

The secret of trading success: COMMITMENT by Van K. Tharp, Ph.D.

ARTICLE SYNOPSIS ...The secret of trading success: COMMITMENT by Van K. Tharp, Ph.D. Jack had a successful business, but he wanted to be a trader. Still, he wasn't willing to give up his annual $75,000 salary until he was certain he could be successful as a trader. So, he just dabbled in the markets, waiting to find the magic secret. He tried different brokers, advisors, software programs and systems. But it was always the same result--he never made enough money. One day, Jack discovered the name of a trader who had made consistent and large profits in the markets for over 30 years. He learned this trader would ...

AUTHOR: Van K. Tharp, Ph.D.DATE: JUN1989

U.S. Treasury auctions and technical analysis by Gerald S. Celaya

ARTICLE SYNOPSIS ...U.S. Treasury auctions and technical analysis by Gerald S. Celaya The auction process in the Treasury bond market creates a problem for technical analysts--the newly auctioned issue has none of the historical price data needed for technical analysis and prices for the new bond are usually quite different from prices of the old bond due to different maturities and coupons. Charts, as well as databases, are affected by the bond auction. Technical indicators--trend-following or momentum oscillators--require historical data. Thus, the lack of data limits the usefulness of most technical trading sys...

AUTHOR: Gerald S. CelayaDATE: JUN1989

Windows of opportunity by Douglas Arend

ARTICLE SYNOPSIS ...Windows of opportunity by Douglas Arend Entering a commodities position typically is a two-step process. First, a decision must be made on the expected direction of the market. This is the set-up. Next, some method for timing the entry is required. I'll refer to this as the signal. Certain indicators and techniques are inherently better suited for the set-up, while others tend to perform well as signals. The key is to separate these functions and select methods which have proven themselves over time. My approach is to identify an expected direction in the market lasting from several days to ...

AUTHOR: Douglas ArendDATE: JUN1989