Article Archive For
SEP1997
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Break Faster Than Rally? by Alex Saitta
ARTICLE SYNOPSIS ...Do markets decline in value at a faster pace than they rally?
The question is put to the test using the Chicago Board of
Trade Treasury bond futures contract.
Nearly all market analysts agree that the bull market in bonds began in 1981, when the price of the Treasury bond futures contract bottomed at 55-05 (Figure 1). There is, however, an array of disagreement as to when or if the bull market ever ended. In my opinion, the bull market for bonds ended in October 1993, when the futures contract peaked at 122-06. The primary reason for my bearish view? Since the October 1993 peak, the Treasury ...
AUTHOR: Alex SaittaDATE: SEP1997SUBJECT: New Techniques
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Do Cycles Exist in the Market? by John F. Ehlers
ARTICLE SYNOPSIS ...This longtime S&C contributor explains the basis of the
existence of cycles in market data.
The markets are not always efficient;
this is why trading decisions
based on technical analysis
work. Chart patterns that are discernible,
technical events such as
double bottomsİ and Elliott
wavesİ, allow technically based
traders to make intelligent deci-sions.
Another key discernible
event that technical traders may
make use of comes in the form of cycles. As a rule, it is not
a task of much difficulty to identify cycles; a simple ap-proach,
such as measuring the distance between successive
lows, ca...
AUTHOR: John F. EhlersDATE: SEP1997SUBJECT: Novice Traders' Notebook
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Identifying Significant Chart Formations by Daniel L. Chesler
ARTICLE SYNOPSIS ...Before computers became commonplace, technical
traders spent most of their time studying their charts,
looking for consolidation and reversal patterns. Today,
many traders have moved away from using
classic chart patterns to methods based on quantifiable
indicators. Here, the two disciplines are combined,
using chart analysis and basic indicators to
identify trading opportunities.
Despite the growth in mechanical
systems trading over the past
decade, classical chart pattern
analysis continues to enjoy a
wide following. For example,
Robert Edwards and John Magee's Technical Analysis
of Stock T...
AUTHOR: Daniel L. Chesler, CTA, CMTDATE: SEP1997SUBJECT: Classic Techniques
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Managed Futures and Commodity Trading Advisors by Martin Hiemstra
ARTICLE SYNOPSIS ...Are managed futures for you? Mysterious for many investors,
they nonetheless fill a particular need and are no riskier than traditional equity investments. Dealing with a professional commodity trading advisor (CTA) can certainly help sort through the confusion.
In early 1997, equity markets
were on a roll, consistently
making new highs. As a result,
it was relatively easy for investors
to make money in the
bull market. But many investors
have begun to question
whether the stock market can
continue to go up. Will their
portfolios be overexposed if
there's a correction? Regardless
of how the s...
AUTHOR: Martin HiemstraDATE: SEP1997SUBJECT: Futures
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Steve Shellans of MoniResearch Newsletter by Thom Hartle
ARTICLE SYNOPSIS ...Computers have managed to insinuate themselves into our lives these days, but
not many of us remember the early days. MoniResearch Newsletter publisher
Steve Shellans was a pioneer of sorts in the industry; he started to work with
computers in earnest 40 years ago, before manned space flight had even been
achieved. By the early 1970s, he was a pioneer of another sort when he moved
out of New York City, the financial center of the nation, across the country, and
there eventually building the beginnings of the market timer database that
would be the underpinning of The MoniResearch Newsletter. S...
AUTHOR: Thom HartleDATE: SEP1997
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Sunspots and Market Activity by J. Katz, Ph.D.
ARTICLE SYNOPSIS ...Is increased sunspot activity a precursor to market volatility?
As any amateur radio operator can
tell you, one of the major influences
on long-distance radio transmissions
is sunspots, which appear
to the observer as, literally,
dark spots on the surface of the
sun. Why they occur is not known,
although theories abound. One
theory holds that they are produced
by certain peculiarities in
the gravitational influences of neighboring planets on the
sun's tidal rhythms, while another theory attributes sunspot
activity to shifts in the sun's magnetic poles. During periods of high sunspot activity,...
AUTHOR: J. Katz, Ph.D.DATE: SEP1997SUBJECT: Trading Techniques
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The Basics of Managing Money by Mark Vakkur, M.D.
ARTICLE SYNOPSIS ...Why is money management one of the first items that profes-sional traders stress? Why would you think? Here's an
overview of risk and several simple mechanical approaches
to money management.
Preserving capital is essential to
a trader's long-term survival.
The only legitimate objective
of trading or investing is to
make money; if you trade for the
thrill of it, you are playing the
world's most expensive sport. The
objective of any money management
system is simple: If followed,
it will force you to cut
losses short and let profits run.
Most novice traders -- and the bulk of today's mutual fun...
AUTHOR: Mark Vakkur, M.D.DATE: SEP1997SUBJECT: Money Management
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The Relative Strength Index (RSI) by John Sweeney
ARTICLE SYNOPSIS ...Here, one of the most popular indicators found in most
analytical software packages is explained.
When the relative strength index
(RSI) became popular in the
1980s, it was touted as the indicator
that led every turn in the
market. Indeed, for certain futures
contracts, financials and
currencies, it could be prescient:
In those markets, it had the peculiar
ability to turn just as the
financials would find a level of support or resistance before
taking off to another price level.
On other items, say, pork bellies or corn or cocoa, it would
ape the price swings precisely. However, on trending p...
AUTHOR: John SweeneyDATE: SEP1997SUBJECT: Indicators
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Traders' Tips
ARTICLE SYNOPSIS ...TRADESTATION
Here are two indicators to assist readers in identifying some
of the classic chart patterns, as discussed in Daniel Chesler's
"Identifying significant chart formations" elsewhere in this
issue. Ideally, you will use one or both of the indicators in
conjunction with other analytical techniques, such as
trendlines, to identify trading opportunities on your charts.
The first indicator, the ADX/MovAvg Combo, is a relatively
simple indicator based on the average directional
movement indicator (ADX) and moving average calculation.
This indicator plots a 50-bar moving average and trigge...
AUTHOR: Technical Analysis, Inc.DATE: SEP1997
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V15:9: Letters to S&C
ARTICLE SYNOPSIS ...WEB FORUM ON TRADING?
Editor,
I'm a longtime subscriber to your magazine
and enjoy it very much, including
especially the reviews of products.
There is a related need that your Web
site could meet while it would be impractical
for a periodical. The product
reviews in the magazine are good for
an overall view of a product but can-not
shine a light on many users' everyday
experiences with the product,
including those annoying or efficiency-
wasting implementation issues
related to usage and configurations,
and intangibles such as ease of living
with a product and enthusiasm and
depth of support...
AUTHOR: Technical Analysis, Inc.DATE: SEP1997