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• Black phantasy in P by Stephen Edwards

  ARTICLE SYNOPSIS ...Black phantasy in P by Stephen Edwards What a pip is P.I.P., thought Peter Parsifal on Friday. Peter was head financial ""rocket scientist"" for Smith, Wesson, Winchester and Colt, Inc. P.I.P. was the Portfolio Insurance Program that was Peter's personal project. On Friday, as the market plunged 100 points, Peter's program printed out options sales with punctilious precision. Assets of Smith, Wesson's clients were preserved. Peter's bosses patted Peter's back and offered him a partnership. ""If it wasn't for your invention, it might have been Black Friday around here,"" they opined. Puffed w...

AUTHOR: Stephen EdwardsDATE: MAR1988

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• Curvilinear chart analysis by D.O. Christian Reiger

  ARTICLE SYNOPSIS ...Curvilinear chart analysis by D.O. Christian Reiger Nothing in the universe moves in an unswerving line ? least of all futures prices. Why then, should straight lines dominate our technical analysis of charts? In the following examples, you'll see how the curvilinear analysis of price evolution in several futures markets can answer some of the knotty questions that technical traders face. In particular, this analytical system provides an answer as to why price trends reverse where they do ? sometimes out of nowhere and at unfathomable times. The system also gives insight into chart formation...

AUTHOR: D.O. Christian ReigerDATE: MAR1988

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• Fitting your "social style" into trading by Herbert Friedman, Ph.D.

  ARTICLE SYNOPSIS ...Fitting your ""social style"" into trading by Herbert Friedman, Ph.D. When it comes to investing, each of us must develop his or her own methodology and manner of approaching the markets. To a large degree, our ability to do this determines our investment success. For example, many commodity traders have lamented the gap between knowing what will happen and having the discipline or desire to execute successfully. Commodity traders also often comment on how their emotional or mental mistakes can be extremely expensive. Whether this gap between your ideas and your bottomline is the result of a...

AUTHOR: Herbert Friedman, Ph.D.DATE: MAR1988

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• Introduction to macros Part 3 by Jim Summers, Ph.D.

  ARTICLE SYNOPSIS ...Introduction to macros Part 3 by Jim Summers, Ph.D. In the previous column, I discussed the advantages of using Lotus 1-2-3 in the management of an indicator as complex as the Directional Movement Index (DMI). In this column and hereafter, we shall move into the meat of our subject--learning how to use Lotus 1-2-3 to test indicators, refine them and incorporate them into your own trading system. The major building block is the macro, so let's begin with it. Macros In simple terms, a macro is nothing more than a means of automating keystrokes and cursor movement. This was basically what Lotus...

AUTHOR: Jim Summers, Ph.D.DATE: MAR1988

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• Letters To S&C

  ARTICLE SYNOPSIS ...LETTERS TO S&C Profit Taker Editor, In the August 1987 issue of Stocks & Commodities magazine (pages 42-45) you reviewed the software program Profit Taker but did not provide an address or telephone number. I would like additional information on this program. Would you please send me their address and telephone number? RONALD FINKBEINER La Crosse, Wl More about Profit Taker can be had from developer Louis Mendlesohn's company: Investor's Growth Corp., 50 Meadow Lane, Zephyr Hills, FL 34249 (813) 973-0496. - Ed. Not so quick Quickbasic Editor, I just received my Quickbasic 4.0 update....

AUTHOR: Technical Analysis, Inc.DATE: MAR1988

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• Market profile Part 4 by Thomas Drinka, Ph.D. and Robert L. McNutt

  ARTICLE SYNOPSIS ...Market profile Part 4 by Thomas Drinka, Ph.D. and Robert L. McNutt Previously, we considered the manner in which the market utilizes price probes and rotation during the trading day to promote trade. Depending on the response of other-time-frame traders, these probes result in one of six possible daily profiles. Similarly, market rotations occur from one day to the next and over the longer term. The primary purpose of this article is to demonstrate how the Chicago Board of Trade's daily volume summary--known as the Liquidity Data Bank--and a long-term auction activity chart can be utilized to a...

AUTHOR: Thomas Drinka, Ph.D. and Robert L. McNuttDATE: MAR1988

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• Moving averages made simple by Heidi Schmidt

  ARTICLE SYNOPSIS ...Moving averages made simple by Heidi Schmidt Once a beginning chartist successfully learns trend identification and channel drawing (Stocks & Commodities, January 1988), moving averages are often the next technical tool to master. Moving averages may be used on price or yield to generate a simple trading system or to confirm an opinion from the charts. Moving averages ""smooth"" the data, allowing trends to be more easily seen and provide a benchmark by which to judge if a reversal has begun. Simple and exponential moving averages are the most popular types used by technicians. A moving aver...

AUTHOR: Heidi SchmidtDATE: MAR1988

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Opening Position by John Sweeney, Editor

AUTHOR: John SweeneyDATE: MAR1988

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• Payoff index by Thomas E. Aspray

  ARTICLE SYNOPSIS ...Payoff index by Thomas E. Aspray In my market analysis, I find the action of the open interest can be very important. Granted in the financial futures it occasionally gives misleading signals, but these are the exception rather than the rule. I use two indicators which incorporate the open interest, the Board Watch Trend Indicator and the Herrick Payoff Index (HPI) developed by John Herrick. I find the HPI is an excellent short- and long-term tool, though my use and interpretation varies from John's. HPI is simply a mathematical method of measuring the money flowing in or out of a commodity ...

AUTHOR: Thomas E. AsprayDATE: MAR1988

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• Reading indicator charts by Arthur A. Merrill

  ARTICLE SYNOPSIS ...Reading indicator charts by Arthur A. Merrill In the preceding column, I discussed the smoothing of indicator data. When you have tamed the wild fluctuations, how do you translate the result into a forecast? How do you read the chart? There are several possible interpretations. A method that works well with one indicator may not be the best for another. The selection of the method is usually made by common sense and trial and error. We'll look at five of the most common and useful. Unusually high or low For most indicators, I assume that the indicator is trying to tell me something when it...

AUTHOR: Arthur A. Merrill, C.M.T.DATE: MAR1988

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SIDEBAR: SIDEBAR

AUTHOR: Technical Analysis, Inc.DATE: MAR1988

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• Survival of the fittest by Philip Gotthelf

  ARTICLE SYNOPSIS ...Survival of the fittest by Philip Gotthelf With the proper tools and right attitude, the ""Crash of '87"" represented one of the greatest profit opportunities in history. A single short S&P 500 futures position could have delivered an amazing $60,000-- without even picking a top or bottom. However, we have the benefit of 20/20 hindsight. Could we have spotted the Crash in time to profit? If so, could we have maintained the cool discipline required to stay with short positions long enough to take advantage of ""Black Monday"" and moves that followed? The answer to the first question is obvious...

AUTHOR: Philip GotthelfDATE: MAR1988

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• Wave market analysis Part 2 by Bryce T. Gilmore

  ARTICLE SYNOPSIS ...Wave market analysis Part 2 by Bryce T. Gilmore In part one of this article (February 1988), we examined four turning points--[W], [X], [Y] and [Z]--in the trend of Coffee, Sugar and Cocoa Exchange Sugar-World #11 contract. We looked at time cycles and retracements and focused on the support and resistance levels they created. This month we'll examine seven more analyses that could have been performed on the same data to detect the four turning points. Figure 1: Weekly Trend Wave. A detrending analysis chart can be a great asset when evaluating the potential risk attached to a time-and-price...

AUTHOR: Bryce T. GilmoreDATE: MAR1988