STOCKS & COMMODITIES magazine. The Traders' Magazine

Article Archive For MAY1988

  • An assist in market timing by Irving Lehren

    ARTICLE SYNOPSIS ...An assist in market timing by Irving Lehren Determining turning points and changes in the stock market often requires looking back at how the market reacted under similar circumstances. But aberrations occur in most cycles and a trader must formulate some intuitive judgment to arrive at a decision. An essential factor in coming to grips with the stock market should be an indicator composed of the stocks that make new highs each week. Logically, it should reveal the flow of money or the state of sentiment--if stocks are making new highs, this signifies the investment attitude is positive; a le...

  • Comparing data vendors by Steven B. Achelis

    ARTICLE SYNOPSIS ...Comparing data vendors by Steven B. Achelis If you think choosing stocks and/or commodities to buy is difficult, try selecting a data vendor to use with your technical analysis software. At Computer Asset Management we have written software (The Downloader) to automatically ""download"" data from 13 vendors for use with our MetaStock technical analysis program and other compatible software. We found significant differences among these vendors, as you'll see in Figure 1. We gathered this information to assist our customers in choosing a data vendor, but keep in mind that there may be advantag...

  • Exorcise fear of a depression by Charles Bebber

    ARTICLE SYNOPSIS ...Exorcise fear of a depression by Charles Bebber Not surprisingly, economic reports in the weeks following the stock market's Black Monday bristled with references to pessimism, alarm and failure of confidence. Contemporary economic thought has long taken for granted that psychology plays a key role in the economy's performance. The high drama of October, therefore, compelled analysts to weigh again and again the possible emotional repercussions on markets and consumers. From the standpoint of psychology, however, questions can be raised regarding their repeated allusions to one particular ps...

  • Letters To S&C

    ARTICLE SYNOPSIS ...Letters To S&C I like your magazine, but... Editor, I like your magazine, but: month after month; graphs are misplaced, or mislabeled; formulas are not clearly explained; misprints occur.... With so much time between issues, I think you should do better at being explicit; being correct. KEITH JOHNSTON Milwaukee, WI Actually, it's pretty frantic getting this out each month. We clearly need to move deadlines up a week or so just to proofread the graphics! - Ed. Trading system reviews Editor, I was disappointed to read in your editorial regarding trading system reviews that because of t...

Opening Position by John Sweeney, Editor

  • Principles of market activity by Robert Pisani

    ARTICLE SYNOPSIS ...Principles of market activity by Robert Pisani Fundamental to the branch of applied economics that I call Market Structure Analysis are three principles which I modestly call ""the Pisani Principles."" These elementary principles, certainly known to merchants--at least intuitively--since commerce began, describe the inherent relationships between price, volume and time, and point the way to the proper interpretation of this kind of market data. The Pisani Principles apply to any free market, for they are perfectly general and express the motivations of market participants in a way that is, in ...

  • Programming for speed Part 5 by Jim Summers, Ph.D.

    ARTICLE SYNOPSIS ...Programming for speed Part 5 by Jim Summers, Ph.D. The past several columns discussed macros and led you through some elementary programming to show how to develop one of the indicators used in J. Welles Wilder's Directional Movement Index (DMI) system. The March column created range names for each row, moving down the rows while processing the price data. That technique is very slow and, for several months' worth of data, would tie up a machine for hours. To overcome this problem, this column introduces concepts which allow the program to operate with minimal cursor or range movement. As a ...

  • SIDEBAR: Creating Linked Histograms

    ARTICLE SYNOPSIS ...Creating Linked Histograms Alphabetic characters were used to build the histograms in this article because it is a familiar scheme to users of CBOT'S Market Profile. However, you may wish to use arbitrary characters, with each character defining a time interval such as day, hour or minute. A single character represents a given unit of the variable being represented. In our example, one character represented 100 shares of volume. If the unit is the smallest trading unit and the number of units becomes larger, or if a continuous variable such as time spent at price is being depicted, the diagr...

  • Spread trading the CRB Index by John J. Murphy and David J. Hirschfeld

    ARTICLE SYNOPSIS ...Spread trading the CRB Index by John J. Murphy and David J. Hirschfeld This article really has two aspects. The first is to introduce the concept of relative strength analysis to commodity markets utilizing CRB Index futures. The second aspect is to show how relative strength (or ratio) analysis can be used as a stepping stone for intermarket spread trading between individual commodity markets and CRB Index futures. Relative strength analysis used in this context refers to the comparison of two different entities, usually through ratio analysis, and is not to be confused with the Relative Str...

  • Spying the black hole by Carl Wyman

    ARTICLE SYNOPSIS ...Spying the black hole by Carl Wyman The stock market spiraled into a black hole on October 19, 1987, hurting investors and destroying many put writers. For most traders the plunge was an incredible concepts which could have warned a trader of a potential shorting opportunity--missed. Why were so few technicians prepared for the crash? Were not some technical indications of an impending market ""correction"" present? Let' take a look at some of the familiar and maybe not so familiar technical market top. None of these concepts are new. Most were written about and practiced more than 50 years ag...

  • System Rankings by John Hill

    ARTICLE SYNOPSIS ...System Rankings by John Hill Futures Truth Company has updated its table on the performance of publicity available trading systems. Results are shown for the six months from August 1, 1987 to December 31, 1988. Similar tables covering the most recent 12 months and the past four years, as well as detailed reports on each system, are available from Futures Truth for $10. Futures Truth has taken to covering black box systems as well as disclosed systems. We've published the six-month table because it minimizes the ability of vendors to ""fit"" their systems to historical data. As we understand ...

  • The seven best brokers in America by Norm Zadeh, Ph.D.

    ARTICLE SYNOPSIS ...The seven best brokers in America by Norm Zadeh, Ph.D. The vast majority of brokers do not make their own investment decisions. When they phone a client with a recommendation, it is that of the firm, not their own. Out of roughly 65,000 brokers, perhaps only 2,500 make their own decisions. Most of these ""superior"" brokers have entered the U.S. Trading Championship or the U.S. Investing Championship at one time or another. The results of five years worth of real money competitions are somewhat gloomy--only 505 of 2370 contestants, 21.3%, reported profits. On the bright side, there are a few ...

  • Trend detection by Arthur Merrill

    ARTICLE SYNOPSIS ...Trend detection by Arthur Merrill The trend of prices is itself an indicator of the future, since trends tend to continue. In a bull market, the major trend is upward. Since most stocks ride with the trend, it's a good idea to buy and hold stocks in a bull market. The reverse is true in a bear market. But the movement in a bull or bear market certainly isn't a straight line. There are secondary reactions in bull markets when the intermediate trend is downward. There are rallies in bear markets when the intermediate trend is rising. Within these intermediate trends there are minor reversals, ...

  • Validating Elliott wave counts by H. Ralph Cripps

    ARTICLE SYNOPSIS ...Validating Elliott wave counts by H. Ralph Cripps The practice of Elliott Wave anal ysis allows for alternative wave counts, and it is critical to differentiate among the various choices. Prioritizing is best accomplished with a confirming filter--which ""validated"" the Elliott waves that clearl y indicated the Dow J ones Industrial Average top on August 25, 1987, which preceded the massive decline of October. Almost every Elliott Wave technician will use some technique to assist in establishin g an appropriate wave count. Some aids for defining wave sequences, magnitude and alternative wave...







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