INDEX

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INDEX

The page numbers in this index refer to the printed version of this book. To find the corresponding locations in the text of this digital version, please use the “search” function on your e-reader. Note that not all terms may be searchable.

Abandoned Baby candle pattern, 312 ABC of Stock Speculation, The (Nelson), 24 Acampora, Ralph, 457 Adaptive moving average (AMA), 222 Advance Block candle pattern, 315 Advance-decline (AD) line, 436 AD divergence, 437 daily vs. weekly AD lines, 437 variations in, 437-438 Advanced technical indicators, 463-473 Demand Index (DI), 463-466, 473 Herrick Payoff Index (HPI), 466-468 Keltner channels, 470-472 starc bands, 469-470 Allen, R.C., 204 Alpha cycles, 359 Analysis vs. timing, 6-7 Appel, Gerald, 252 Arithmetic scale, 39-40 Arms Index (TRIN), 444, 445 Open Arms, 446 smoothing, 445-446 TICK vs., 444 Arms, Richard, 444, 448 Art charting, 11 Art of Contrary Thinking, The (Neill), 258 Ascending triangle, 130, 131, 136-138, 331

as bottoming pattern, 138 bullish breakout, 136-137 measuring technique, 137-138 volume pattern, 140 Asset allocation, 409-410 Average, True Range, 469 Barker, David Knox, 359 Bar charts, 35, 40-46 compared to point and figure charts, 266-270 futures open interest, 35, 42-44 volume, 35, 41-42 Behavioral Finance, use of term, 21, 459 Belt Hold candle pattern, 310 Beta cycles, 359 Blowoffs, 175 Bollinger Bands, 209-211, 221 using as targets, 210 Bollinger Bands and volatility, 211 Bollinger, John, 209 Bolton, A. Hamilton, 319 Bottom failure swings, 242-243 Bottom reversal day, 91, 92 Breakaway candle pattern, 313 Breakaway gaps, 94-95 Breakouts, tactics on, 400-401 Bressert, Walt, 359, 374, 375 Broadening formation, 130, 140-141 Brooks, John, 457 Bullish speedline, constructing, 88-89 Bull trap, 122 Buy-and-hold strategy: and futures, 7 and Random Walk Theory, 16 Buy limit order, 403-404 Buy stop order, 404 Call open interest, 177 Candle pattern analysis, 301-306 computerized, 306 continuation candle patterns, 304-305

reversal candle patterns, 301-304 CandlePower charting, 448-449 Candlestick charts, 37-39, 297-299, 309-317 See also Japanese candlesticks Channel line (return line), 80-85 measuring implications, 85 Chart construction, 35-47 arithmetic vs. logarithmic scale, 39-40 candlestick charts, 37-39 of daily bar charts, 36, 40-41 futures open interest, 35, 42-44 volume, 35, 41-42 intraday chart, 35 line charts, 36-37 point and figure charts, 37, 38, 278-282 types of charts available, 36-37 weekly and monthly charts, 35, 45-46 Chart patterns, 185 Chartcraft Method of Point and Figure Trading, The (Cohen), 277 Chartered market technician (CMT), 456-457 Charting, 9, 10-12 purpose of, 3 subjectivity of, 11, 16 Charting software, 378-379 Chartist, 10-12 Closing prices, 30-31 Cohen, A.W., 277 Coil, See Symmetrical triangle Collins, Charles J., 319 Commitments of Traders (COT) Report, 175-176 and large commercial hedgers, 176 Commodities Futures Trading Commission (CFTC), 175 Commodity Channel Index (CCI), 237-239, 374 Commodity market analysis, 15 Commodity markets, chart of, 10 Commodity Research Bureau Futures, 15 Commodity Systems, Inc., 184 Commodity Trend Service, 177 Complex head and shoulders patterns, 113-115 tactics, 113 Computers: charting software, 378-379

Directional Movement System (Welles Wilder), 378, 380, 384-387, 390 and ADX, 384-387 Parabolic System (Welles Wilder), 378, 380, 381-384, 390 system trading pros/cons, 387-389 tools/indicators, 380 using, 380 TradeStation (Omega Research), 389-390 and trading systems, 377-391 Concealing Baby Swallow candle pattern, 314 Concentration, diversification vs., 396-397 Confirmation, 155-156 Congestion area, 147-150, 274 Consensus National Commodity Futures Weekly, 258 Constant Forward Contracts vs. Continuous Contracts, 508-510 Continuation candle patterns, 304-305 Continuation charts for futures, construction of, 182-183 Continuation head and shoulders, 153-155 Continuation patterns, 100-101, 129-156 confirmation, 155-156 continuation head and shoulders, 153-155 divergence, 155-156 triangles, 130-147 See also Triangles Continuous futures contracts, 505-510 Continuous Contracts, 507-510 Constant Forward Contracts vs., 508-510 Gann Contract, 507 Nearest Contract, 506 Next Contract, 506-507 Contract details, futures markets, 12 Contrary Opinion, 226, 257-261 combining with other technical tools, 261 interpreting bullish consensus numbers, 258, 260 market’s reaction to fundamental news, 260-261 open interest (futures), importance of, 260 and remaining buying/selling power, 259 and strong vs. weak hands, 259 Corrective waves, 320-323, 324-331 flats, 326-329 triangles, 329-331 zig-zags, 324-326 CRB Futures Price Index, 423-424 Crests, 348-351

Cybernetic Trading Strategies (Ruggiero), 428 Cycles: and 4 week rule, 218-219 and moving averages, 212 Cycles: The Mysterious Forces That Trigger Events (Dewey and Mandino), 344 Cycle Trader, 375 Daily bar charts, 36, 40-41, 181 horizontal axis, 41-42 open interest, 35, 42-44 vertical axis, 41-42 volume, 35, 41-42 Dark Cloud Cover candle pattern, 302, 311 Day trading, 9 Deliberation candle pattern, 314 Demand Index (DI), 167, 463-466, 473 Descending triangle, 130, 138-140, 331 as a top, 138 volume pattern, 140 Descriptive statistics, 18 deVilliers, Victor, 265 Dewey, Edward R., 344-348 Dial Data Service, 505 Directional Movement System (Welles Wilder), 378, 380, 384-387, 390 and ADX, 384-387 Divergence, 27, 155-156, 227 Diversification vs. concentration, 396-397 Dobson, Edward D., 342 Doji candlesticks, 300-301 Doji Star candle pattern, 311, 312 Dominant cycles, 358-360 Donchian, Richard, 215-216, 362 Dorsey, Thomas, 292 Double crossover method, 203-204 Double tops and bottoms, 57, 100, 117-121, 122-124 measuring technique, 120-121 Dow, Charles, 23-24, 265, 460 Dow Jones & Company, 23 Dow Jones Industrial Average, 14, 33, 320, 422, 449-451 Dow Jones Transportation Average, 33 Dow Jones Utility Index, 33

Downside Gap Three Methods candle pattern, 316 Downside Tasuki Gap candle pattern, 316 Downtrend, 50-52 Dow Theory, 23-33, 319, 452 applied to futures trading, 32 basic tenets of, 24-30 averages discount everything, 24-25 averages must confirm each other, 27 major trends have three phases, 26-27 market has three trends, 25-26 trend is in effect until it signals reversal, 28-30 volume must confirm trend, 27 closing prices, 30-31 criticisms of, 31-32 lines, 31 stocks as economic indicators, 32 Dragonfly Doji, 301 Dunn & Hargitt’s Financial Services, 215 Easy Language (Omega), 390, 498-500 Economic forecasting, 10 Efficient market hypothesis, 19-21, 459 Ehlers, John, 374, 375 Ehrlich Cycle Finder, 363-365 Ehrlich Cycle Forecaster, 365, 366, 375 Ehrlich, Stan, 363 Elder, Alexander, 442 Elliott, R.N., 27, 319 Elliott Wave Supplement to the Bank Credit Analyst, 319-320 Elliott Wave Theory, 27, 76, 86, 319-342 alternation, rule of, 331-332 applied to stocks vs. commodities, 340 basic tenets of, 320-323 channeling, 332-334 combining all aspects of, 338-340 connection between Dow Theory and, 324 corrective waves, 320-323, 324-331 flats, 326-329 triangles, 329-331 zig-zags, 324-326 degrees of trend, 320-321 Elliott Wave Principle, 320, 342

Fibonacci numbers, 212-213, 322-323, 334-335 Fibonacci ratios and retracements, 335-338 Fibonacci time targets, 338 historical background, 319-320 impulse waves, 320 pattern, 320 ratio analysis, 320 time relationships, 320 using with other technical tools, 342 wave 4 as support area, 334 Engulfing candle pattern, 310 Equivolume charting, 447-448 Evening Star candle pattern, 303-304, 312 Exhaustion gaps, 96-97 Exponentially smoothed moving average, 197, 199-200 Extremes, 486-487 Failed head and shoulders pattern, 113-115 Failure swing, 29-31, 242 Fair value, 415 Falling Three Methods candle pattern, 304-305, 315 Fan principle, 74-76 Fibonacci fan lines, 90 Fibonacci numbers, 212-213, 322-323, 334-335 Fibonacci number sequence, 322-323 Fibonacci percentage retracements, 335-338 Fibonacci ratios, 86 and retracements, 335-338 Fibonacci time targets, 338 50% retracement, 85-87 Filtered candle patterns, 306-307 Filters, 71-72, 122 Financial futures, 8 Flagpole, 143-144 Flags, 141-145 construction of, 142-143 measuring implications, 143-144 Flat corrections, 326-329 Flow of funds analysis, 15 Foreign currencies, 8 Foundation for the Study of Cycles, 348, 375 4-9-18 day moving average combination, 204

how to use, 205-207 4 week rule, 212, 215-219, 362 Frost, A.J., 320, 342 Fulcrum, use of term, 275 Fundamental forecasting, technical forecasting vs., 5-6 Futures, 8 blowoffs, 175 life span, 12-13 margin requirements, 13 pricing structure, 12 time frame, 14 and timing, 14 Futures Charts, 177 Gann Contract, 507 Gann fan lines, 90 Gann, W.D., 87, 90, 183 Gaps, 76 Goldman Sachs Commodity Index, 410 Gould, Edson, 87-88 Granville, Joseph, 165 Granville’s New Key to Stock Market Profits, 165 Gravestone Doji, 300 Great Cycle, The, (Stoken), 359 Greeley, John, 457 Hamilton, William Peter, 24 Hammer candle pattern, 310 Hanging Man candle pattern, 310 Harami candle pattern, 310-311 Harami Cross candle pattern, 311 Harmonicity, principle of, 351, 352, 354 Harmonic relationships, cycles, 212, 218 Head and shoulders, 74, 76 continuation pattern, 153-155 reversal pattern: basic ingredients of, 106 neckline, breaking of, 106 price objective, 108-110 adjusting, 109-110 finding, 108-110 return move, 106-107

volume, 107-108 Hedging process, 8 Herrick, John, 466 Herrick Payoff Index (HPI), 167, 466-468 Hirsch, Yale, 373 Histogram, 234-237, 476 Homing Pigeon candle pattern, 315 Horizontal count, 274-275 How to Build a Fortune in Commodities (Allen), 204 How to Use the 4-Day, 9-Day and 18-Day Moving Averages to Earn Larger Profits from Commodities (Allen), 204 Hurst, J.M., 348, 355-358 Identical Three Crows candle pattern, 314 Impulse waves, 320 Inductive statistics, 18 In Neck Line candle pattern, 317 Interest rate markets, 8 Intermarket analysis, 413-431 bonds: link between commodities and, 418 link between stocks and, 416-417 commodities, link between dollar and, 419-420 deflation scenario, 427-428 dollar and large caps, 422 intermarket correlation, 428-429 intermarket neural network software, 429-430 and mutual funds, 422 program trading, 414, 415-416 relative strength: and individual stocks, 426 and sectors, 424-425 relative strength analysis, 422-426 stock sectors and industry groups, 420-422 top-down market approach, 427 Intermarket correlation, 428-429 Intermarket neural network software, 429-430 Intermarket Technical Analysis (Murphy), 414, 430 Intermediate cycle, 359 Intermediate trend, 25, 52-54 Internal trendlines, 90 International Federation of Technical Analysts (IFTA), 457, 458

International stock markets, 8, 9 Intraday pivot points, 407-408 Intraday point and figure charts, construction of, 270-273 Intraday price charts, 45, 405-408 Market Profile, 411 Inverse head and shoulders, 110-112 neckline, slope of, 111-112 Inverted Hammer candle pattern, 310 Investor Sentiment Readings, 261-262 Investors Intelligence numbers, 262-263 Island reversal pattern, 97 January Barometer, 373 Japanese candlesticks, 37-39, 297-317 basic candlesticks, 299-301 candle pattern analysis, 301-306 computerized, 306 continuation candle patterns, 304-305 reversal candle patterns, 301-304 candle patterns, 309-317 filtered, 306-307 candlestick charting, 297-299 Doji candlesticks, 300-301 Long Days, 299 Short Days, 299 Spinning Tops, 299-300 Jones, Edward, 23

K Wave, The (Barker), 359 Kaufman, Perry, 222 Keltner channels, 470-472 Key reversal day, 91 Kicking candle pattern, 313 Kondratieff Wave, 359-360

Ladder Bottom candle pattern, 315 Ladder Top candle pattern, 315 Lambert, Donald R., 237, 307 Lane, George, 246 Larry Williams %R, 249 Leading Indicators for the 1990s (Moore), 10, 430 Life span, futures contracts 12-13

Limit days, 168 Limit order, 403-404 Linearly weighted moving average, 197, 199 Line charts, 36-37 Lines, 31, 57, 147-148 Logarithmic charts, 39-40 Longer range technical forecasting, 9 Long-legged Doji, 300 Long-term charts, 181-194 adjusting for inflation, 186-187 continuation charts for futures, construction of, 182-183 examples of, 188-194 longer range perspective, importance of, 182 long term trends, persistence of, 184-185 and moving averages, 214 patterns on, 185 Perpetual Contract, 184 and trading, 188 Long term cycles, 359 Long term to short term charts, 185-186 Long Wave Cycle (Kondratieff), 359 Lukac, Louis, 216 Lunar cycle, 362 McClellan oscillator, 438-439 McClellan, Sherman, 438 McClellan Summation Index, 439-440 Major reversal patterns, 99-128 double tops and bottoms, 100, 117-121 filters, 122 head and shoulders, 100, 103-107 complex, 113-115 as consolidation pattern, 115 failed, 113-115 inverse, 110-112 ideal pattern, variations from, 121-125 price patterns, 100-103 continuation, 100, 129-156 measuring techniques, 101 reversal, 99-128 volume, 100, 107-108 saucers/spikes, 100, 125-127

triple tops and bottoms, 100, 115-117 Major trend, 52-54 Major Works of R.N. Elliott, The, 320, 342 Managed accounts, 410-411 Mandino, Og, 344 Margin requirements, stocks vs. futures, 13 Market averages, comparing, 435, 449-451 Market breadth, measuring, 433 Market-if-touched (M.I.T.) order, 404 Market order, 403, 404 Market price, as leading indicator of fundamentals, 6 Market Profile, 411, 475-491 graphic, 476-479 defined, 476 longer term market activity, tracking, 486-490 market structure, 479-480 organizational principles, 480-483 auction setting, 480 continuous negotiation, 481 market balance/imbalance, 481 price and value, 482-483 short term trader/long term trader roles, 482 time frames and trader behavior, 481-482 range development and profile patterns, 484-485 Market Technicians Association (MTA), 24, 457 Market Technologies Corporation, 429 Matching High candle pattern, 314 Matching Low candle pattern, 314 Maximum Entropy Spectral Analysis (MESA), 374-375 Maximum retracement parameter, 86 Measured move, 151-153 Measuring gaps, 95-96 Meeting Line candle pattern, 311 Mendelsohn, Louis, 429-430 MESA and Trading Market Cycles (Ehlers), 374 Metastock charting software (Equis International), 448 M.I.T. order, 404 Momentum: ascent/descent rates, 230 crossing of zero line, 231-232 measuring, 228-233 momentum line, and price action, 230

upper/lower boundary, need for, 232-233 Money management, 393-411, 501 asset allocation, 409-410 combining with technical factors, 403 diversification vs. concentration, 396-397 guidelines for, 395-396 managed accounts, 410-411 mutual funds, 410-411 reward-to-risk ratios, 397-398 trading multiple positions, 398-399 Monthly charts, 35, 45-46, 181-182 Monthly cycle, and moving averages, 212 Monthly reversals, 93, 185 Moore, Geoffrey, 430 Morning Doji Star candle pattern, 312 Morning Star candle pattern, 303, 312 Morris, Greg, 184, 296, 297fn, 306, 448 Moving Average Convergence/Divergence (MACD), 214, 252-255, 374 MACD histogram, 255 Moving average, 195-215 adaptive (AMA), 222 alternatives to, 223 applied to long term charts, 213-215 Bollinger bands, 209-211, 221 using as targets, 210 and volatility, 211 defined, 195-196 double crossover method, 203-204 envelopes, 207-208 exponentially smoothed, 197, 199-200 Fibonacci numbers used as, 212-213 4-9-18 day moving average combination, 204 how to use, 205-207 linearly weighted, 197, 199 optimization, 220-221 as oscillators, 214 and point and figure charts, 294-295 pros/cons of, 214 simple, 197, 199 as smoothing devices with time lag, 197-207 and time cycles, 212 triple crossover method, 204

using one, 201-203 using three, 204 using two, 203-204 which prices to average, 197-198 Moving average envelopes, 207-208 Multiple positions, trading, 398-399 Mutual funds, 410-411 and intermarket analysis, 422 NASDAQ composite, 435, 449-451 Nature’s Law—The Secret of the Universe, 319, 334 Nearest Contract, 506 Near term trend, 52-54 Neill, Humphrey B., 258 Nelson, S.A., 24 Neutral day, 484-486 New Concepts in Technical Trading Systems (Wilder), 239, 469 New High-New Low index, 440-442 New York Stock Exchange Index, 449-451 Next Contract, 506-507 Nominality, principle of, 353-355 Nonfailure swing, 30-31 Normal day, 484-486 Normal variation day, 484-486 On-balance volume (OBV), 165-167 One-third retracement, 85-87 On Neck Line candle pattern, 316, 317 Open Arms Index, 446 Open interest, 35, 42-44, 159-162 defined, 159 in futures, 42-44, 159-161 how changes occur in, 160-161 interpreting: in futures, 169-174 general rules for, 161-162 in options, 177 put/call ratios, 178-179 as secondary indicator, 159-162 Oppenheimer Real Assets, 410 Optimization, 220-221, 496 Options, open interest in, 177

Options hedging, 8 Oscillators, 223, 225-263 Commodity Channel Index (CCI), 237-239 constructing, using two moving averages, 234-237 Oscillators Contrary Opinion, 257-261 interpretation of, 226-227 Investor Sentiment Readings, 261-262 Investors Intelligence numbers, 262-263 Larry Williams %R, 249 momentum, measuring, 228-233 Moving Average Convergence/Divergence (MACD), 214, 252-255 MACD histogram, 255 moving averages as, 214 rate of change (ROC), measuring, 234 Relative Strength Index (RSI), 239-245 interpreting, 242-245 70 and 30 lines, using to generate signals, 245-246 Stochastic oscillator, 246-249 and trend, 226-228 importance of, 251 usefulness of, 251-252 uses for, 227 See also Contrary Opinion Outside day, 92 Parabolic System (Welles Wilder), 378, 380, 381-384, 390 Peaks, time between, 125 Pelletier, Robert, 184 Pennants, 141-145 construction of, 142-143 measuring implications, 143-144 Percentage envelopes, 207-208 Percentage retracements, 85-87, 402 Fibonacci, 86, 336-338 Perpetual Contract, 184 Piercing Line candle pattern, 303, 311 Pioneer range, 484 Point and Figure Charting (Dorsey), 292 Point and figure charts, 37, 38, 265-296 advantages of, 288

bar charts compared to, 266-270 computerized charting, 292-294 horizontal count, 274-275 intraday, construction of, 270-273 moving averages, 294-295 price patterns, 275-277 technical indicators, 292 3 box reversal, 277-282 trading tactics, 286-288 trend analysis and trendlines, 277 vertical count, 286 Point and Figure Method of Anticipating Stock Price Movements (deVilliers), 265 Power of Oscillator/Cycle Combinations (Bressert), 374, 375 Prechter, Robert, 320, 331, 342 Presidential Cycle, 373 Price action, and shifts in supply and demand, 2 Price channels, 219-220, 332-334 Price filters, 71-72, 122 Price forecasting, 393-394 Price gaps, 94-97, 402 breakaway gaps, 94-95 exhaustion gaps, 96-97 island reversal pattern, 97 runaway (measuring) gaps, 95-96 types of, 94 Price patterns, 57, 100-103, 185 continuation, 100-101, 129-156 measuring techniques, 101 and point and figure charts, 275-277 reversal, 99-128 volume, 100 as confirmation in, 162-164 See also Continuation patterns; Reversal patterns Pricing structure, futures, 12 Primary cycle, 359 Primary trends, 25-26 Profit Magic of Stock Transaction Timing (Hurst), 348 Program buying, 415 Program selling, 415-416 Program trading, 414, 415-416 Proportionality, principle of, 351, 353

Protective stops, 397 Pugh, Burton, 362 Put/call ratios, 178-179 Put open interest, 177 Quantitative analyst, 11 Random Walk Theory, 19-21 and buy-and-hold strategy, 16 Range development and profile patterns, 484-485 Range extension, 486-488 Rate of change (ROC), measuring, 234 Rectangle formation, 147-151 similarities/differences, 151 swings within range, trading, 150-151 volume pattern, 150 Rectangles, 31 Relative strength analysis, 422-426, 450-451 Relative Strength Index (RSI), 239-245, 374 interpreting, 242-245 Return line, 80-85 measuring implications, 82-85 Reversal days, 90-93 Reversal candle patterns, 301-304 Dark Cloud Cover, 302, 311 Evening Star, 303-304, 312 Morning Star, 303, 312 Piercing Line, 302-303, 311 Reversal patterns, 99-128 double tops and bottoms, 100, 117-121 filters, 122 head and shoulders, 100, 103-107 complex, 113-115 as consolidation pattern, 115 failed, 113-115 inverse, 110-112 ideal pattern, variations from, 121-125 saucers/spikes, 100, 125-127 triple tops and bottoms, 100, 115-117 Reward-to-risk ratios, 397-398 Rhea, Robert, 24, 319 Right angle triangles, 138

Rising Three Methods candle pattern, 304-305, 315 Ruggiero, Murray, Jr., 428 Runaway gaps, 95-96 Russell 2000, 422, 435, 449-451 Russell, Richard, 24

S…P 500, 14, 32, 415-416, 425, 449-451 Saucers, 125-127 Seasonal cycles, 359, 369-372 Secondary trends, 25, 52-54 Self-fulfilling prophecy, and technical analysis, 15-18 Selling climax, 91, 92, 93, 175 Sell limit order, 403-404 Sell stop order, 404 Semilog chart scaling, 188 Sentiment indicators, 15 Separating Lines candle pattern, 315 70 line, using to generate signals, 245-246 Shooting Star candle pattern, 310 Side by Side White Lines candle pattern, 316 Sideways trend, 50-52 Simple moving average, 197, 199 Smarter Trading (Kaufman), 222 Speedlines, 87-89 Spikes, 125-127 Spinning Tops, 299-300 Standard deviation, 209, 476 Starc bands, 469-470 Statistical analyst, 11 Steidlmayer, J. Peter, 411, 475fn, 479-480 Stick Sandwich candle pattern, 314 Stochastic oscillator, 246-249, 374 Stock index futures, 8 Stock market analysis, 14-15 Stock Market Barometer (Rhea), 24 Stock market cycles, 373 Stock market indicators, 433-452 advance-decline (AD) line, 436 AD divergence, 437 daily vs. weekly AD lines, 437 variations in, 437-438 Arms Index (TRIN), 444, 445

Open Arms, 446 smoothing, 445-446 TICK vs., 444 CandlePower charting, 448-449 Equivolume charting, 447-448 McClellan oscillator, 438-439 McClellan Summation Index, 439-440 market averages, comparing, 435, 449-451 market breadth, measuring, 433 New High-New Low index, 440-442 sample data, 434-435 upside vs. downside volume, 443-444 See also Advanced technical indicators Stock Market Timing (Cohen), 277 Stocks, 8 as economic indicators, 32 life span, 12-13 margin requirements, 13 pricing structure, 12 time frame, 14 and timing, 14 Stock Trader’s Almanac (Hirsch), 373 Stoller, Manning, 469 Stop limit order, 404 Stop order, 404 Summation, principle of, 351-352 Support and resistance, 55-65, 401 psychology of, 59-61 resistance, defined, 55-56 reversal of roles, 56-59 support, defined, 55 and volume, 60 Swing measurement, 151-153 Symmetrical triangle, 130, 131-135, 331 defined, 132 measuring technique, 135 triangle resolution, time limit for, 133-134 volume, 134-135 Symmetric distribution, 476 Synchronicity, principle of, 351, 353, 354 Technical analysis: applied to time dimensions, 9-10

applied to trading mediums, 8 chartered market technician (CMT), 456-457 coordinating with fundamental analysis, 455-456 criticisms of, 15-19 defined, 1 economic forecasting, 10 Federal Reserve approval, 459-460 flexibility/adaptability of, 7-8 flow of funds analysis, 15 global reach of, 458 International Federation of Technical Analysts (IFTA), 457, 458 Market Technicians Association (MTA), 457 names for, 458-459, 460 number three, importance of, 76 philosophy of, 1-22 history repeats itself, 4-5 market action discounts everything, 2-3 prices move in trends, 3-4 and self-fulfilling prophecy, 15-18 sentiment indicators, 15 in stocks and futures, comparison of, 12-14 technical checklist, 454-455 using in timing, 400 Technical analysis of Stock trends (Edwards et al.), 33, 448 Technical analyst, 10-12 Technical forecasting, fundamental forecasting vs., 5-6 Technical tools, 15, 374 Technician, 10-12 Telescan, 380 30 line, using to generate signals, 245-246 3% penetration criterion, 71 Three Black Crows candle pattern, 312 3 box reversal point and figure chart, 277-282 chart patterns, 280-282 construction of, 278-282 measuring techniques, 286 trendlines, 282-286 Three Inside Down candle pattern, 313 Three Inside Up candle pattern, 313 Three Line Strike candle pattern, 316 Three Outside Down candle pattern, 313 Three Outside Up candle pattern, 313

Three Stars in the South candle pattern, 314 Three White Soldiers candle pattern, 312 Time cycles, 212, 343-375 basic concepts, 348-351 and charting techniques, 355-358 classification of, 359 combining cycle lengths, 361 combining cycles with other technical Tools, 374 crests, 348-351 cyclic principles, 351-353 dominant cycles, 358-360 Ehrlich Cycle Finder, 363-366 and 4 week rule, 212, 215-216, 362 isolating cycles, 363-368 January Barometer, 373 Kondratieff Wave, 359-360 left and right translation, 362-363 Maximum Entropy Spectral Analysis (MESA), 374-375 and moving averages, 212 Presidential Cycle, 365, 373 qualities of, 348-351 seasonal cycles, 359, 369-372 stock market cycles, 373 and trend, 361-362 troughs, 348-351 Time dimensions, technical analysis applied To, 9-10 Time filter, 71 Time Price Opportunity (TPO), 479 Time series analysis, 19 Timing, 393-394 analysis vs., 6-7 using technical analysis in, 400 Top failure swing, 242-243 Top reversal day, 91, 92 Tower, Kenneth, 292-294, 296 Trader’s Library, 375 Trader’s Notebook, 215 TradeStation (Omega Research), 389-390, 497-500 Trading: elements of, 393-394 after periods of success/adversity, 399 Trading cycle, 359, 362

Trading for a Living (Elder), 442 Trading mediums, technical analysis applied to, 8 Trading multiple positions, 398-399 Trading orders, types of, 403-405 Trading range, 51, 147-150 Trading system: building, 493-503 concept design, 495-497 evaluating results, 500-501 money management, 501 objective rules, 497 testing code, 497-500 trading signals, checking on computer, 497 Trading tactics, 393-394, 400-402 applied to stocks, 409 and point and figure charts, 286-288 timing, using technical analysis in, 400 Trend, 49-98 classifications of, 52-54 definition of, 49 downtrend, 50-52 fan principle, 74-76 Fibonacci fan lines, 90 Gann fan lines, 90 intermediate trend, 52-54 internal trendlines, 90 major trend, 52-54 monthly reversals, 93 near term trend, 52-54 percentage retracements, 85-87 price gaps, 94-97 reversal days, 90-92 sideways trend, 50-52 speed resistance lines, 87-89 support and resistance, 55-65 and time cycles, 361-362 trading range, 51 trendlines, 65-74 uptrend, 50-52 weekly reversals, 93 See also Price gaps; Support and resistance; Trendlines Trend day, 484-486

Trending vs. trading units, 398-399 Trendlines, 65-74 adjusting, 77-79 breaking of, 68, 71-72, 102 channel line (return line), 80-85 determining significance of, 69 down trendline, 65-66 drawing, 67 how to use, 67-68 internal, 90 measuring implications of, 72-74 and price action, 69 price filters, 71-72 relative steepness of, 76-80 and reversal of roles, 72-73 small penetrations, how to handle, 70-71 tentative vs. valid, 67 3 box reversal point and figure chart, 282-286 up trendline, 65-66 Trend trading, 9 Triangles, 76, 130-147 ascending, 130, 131, 136-138, 331 broadening formation, 130, 140-144 descending, 130, 138-140, 331 and Elliott Wave Theory, 329-331 flags, 141-145 measured move, 153 minimum requirement for, 132 pennants, 141-145 rectangle formation, 147-151 symmetrical, 130, 131-135, 331 time factor in, 140 wedge formation, 146-147, 148 Triangles See also Ascending triangle; Descending Triangle; Symmetrical triangle Triple crossover method, 204 triple tops and bottoms, 76, 115-117, 164 Tri-Star candle pattern, 312, 313 Troughs, 348-351 time between, 125 28 day trading cycle, 362 Two Crows candle pattern, 315

2 day rule, 71-72 Two-thirds retracement, 85-87 2 week rule, 212

Understanding Fibonacci Numbers (Dobson), 342 Unique Three River candle pattern, 314 Upside Gap Three Methods candle pattern, 314 Upside Gap Two Crows candle pattern, 314 Upside Tasuki Gap candle pattern, 316 Uptrend, 50-52 UST Securities, 292, 294

Value Area, 487, 488-489 Van Nice, Nick, 177 Vantage Point software, 430 Variation, principle of, 353-355 Visual Investor, The, 430, 458 Volatility, and Bollinger bands, 211 Volume: on-balance volume (OBV), 165-166 alternatives to, 166-167 on bar charts, 41-42 as confirmation in price patterns, 163-164 defined, 158 degree of penetration, 61-64 head and shoulders reversal pattern, 100, 107-108 interpreting: for all markets, 162-169 general rules for, 161-162 and price, 163-165 and price patterns, 100 round numbers as, 64-65 as secondary indicator, 158-162 and support and resistance, 60 Volumes Cycles in the Stock Market (Arms), 448 V-pattern, 125-127

Wall Street Journal, The, 23-24, 265-266, 434, 436 Wave Principle, The, 319 Wedge formation, 146-147, 148 Weekly charts, 35, 45-46, 181-182 Weekly price channel (weekly rule), 215-220

Weekly reversals, 93, 185 Weekly rule, 215-220 4 week rule, 212, 219 adjustments to, 217-218 and cycles, 218-219 Wilder, J. Welles, 239, 307, 378, 380, 381-387, 469 Wizard Trading, 216 Wyckoff, R.D., 265

Zig-zags, 324-326

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