118, 121, 122, 125, 158, 162, 164, 170,173, 190, 204, 216, 218, 220, 224, 234,238, 255, 257, 259, 261, 263, 272 274,278, 283, 286, 288, 292, 494Ascending Triangle, 113 et seq., 146, 163, 215,451 et seq. , 454 et seq., 502, 527,744Breakaway Gap from, 215 et seq.buying signal, 502failure of, 118measuring formula, Chapter 32; 744return to support, 484trend action of, 451Chart Examples, 111–118, 120, 126, 200,224, 249, 257, 278, 484, 514, 520, 525,548, 556, 564Asset Allocation, Chapters 17.2, 42, Appendix AUsing futures for, 345Automated Trendline, Chapter 36Averages, 744Composite, 15, 294Dow-Jones, Chapters 3, 4, 5, 5.1, 15.1; 428,471 et seq., 577 et seq., 744group, 460moving(see Moving Averages)proliferation of, 291 et seq.Dow, Russell, etc., 291Support and Resistance in, 250 et seq.trendlines in, 291Chart Examples, 27, 29, 31, 33, 35, 37, 39,293,Average Directional Movement Index(ADX), Appendix C; 743Averaging, cost, 528, 745Average true range, Appendix EAxis, 745(see Apex)
773
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774BBalanced program, Chapter 38; 745Bar chart, 1–774, 745barchart.com, Appendix CBaruch, Bernard, 324Basket trades, Chapter 17.2; 745Basing Points, Chapters 28, 28.1; 443 et seq.,459 et seq., 497 et seq., 745congestion as, 459Minor Bottoms and Tops as, 497trendline contacts as substitutes for,499 et seq.Basic Trendline, Chapter 14; 253 et seq.,452 et seq., 745(see Trendline)Basis points, 745Bear Market, Chapters 3, 4, 5, 38; 207 et seq.,234, 359 et seq., 460, 473 et seq., 502,536–7, 577 et seq., 745angles of decline, 273 et seq., 428, 593application of technical methods in, 431Basing Points in, Chapters 28, 28.1Bottom, 178, 246 et seq., 256Intermediate Trends, 273 et seq.measuring rules, 469Panics, 234, 246 et seq.patterns formed during, 124protective stops in, Chapters 28, 28.1; 442Reversal, Bear to Bull, 126rallies inintermediate, 275 et seq., 463 et seq.typical, 81, 469scale order systems in, 246 et seq., 505short sales in Primary Reversal, 460steps of decline, 462 et seq.Support and Resistance Levels in,246 et seq.trendlines, 290 et seq.velocity of price movements, 611volume during, 320Wedges, 169 et seq.(see Bottom)(see Reversal)(Note: Bear Market phenomena are takenup in connection with eachtechnical principle and aredemonstrated in the accompanyingillustrations.)Bent neckline, 490, 745, 750Chart Examples, 164, 165, 167, 490(see Diamond)Beta, Appendix D; 612, 764coefficient, 745
Technical Analysis of Stock Trendsvolatility, Chapters 24, 42, Appendix Aformula, 422, Greek letter, 600Bid-Ask spread, About Editorial PracticesBlack, Fischer, Chapter 17.2; 333Black-Scholes Model, 335, 345Block trade, 745Blow-off, 182, 313, 404, 414459 et seq., 748(see Climactic Top)“Blue chips,” 397, 436, 523 746Blue Parallel, Chapter 29; 451, 746Blue Trendline, Chapter 29; 502, 746Bollinger Bands, Appendix C ; 653 et seq.Chart Example, 653Bollinger, John, Appendix C, 653, 746Book value, 5 et seq., 747Boom, 13, 402, 522, 609Bottom, Kilroy, 79(see Head and Shoulders Bottom)Bottom, 747Pearl Harbor(see Pearl Harbor Panic)as Resistance(see Resistance)“spike,” 181, 656 et seq., 764(see Ascending Triangle)(see Bowl)(see Dormant Bottom)(see Head-and-Shoulders)(see Multiple Bottom)(see Panic Bottom)(see Rectangle)(see Reversal)(see Rounding Bottom)(see Symmetrical Triangle)(see Triple Bottom)Boundary, 102 et seq., 119 et seq. 249–51, 747(see Pattern)(Boundary lines are discussed atlength in numerous Pattern texts.)Bowl, 84 et seq., 763 et seq.(see Rounding Bottom)Inverted(see Rounding Top)Bracketing, 747Breakaway Gap, 214 et seq., 502, 510, 747, 754adverse, 502 et seq.,closing of, 247from Flag, 493Chart Examples, 83, 136, 156, 163, 168, 195,197, 213, 216, 218, 220, 257, 314, 316,410, 412, 414, 415, 474, 466, 498, 520,562, 566Breakout, Chapters 7, 8, 9, 10, 11, 12; 518, 525,527, 747
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IndexBroadening Top, 154 et seq., 483Diamond, 164 et seq., 487 et seq.Double Tops and Bottoms, 487 et seq.false, 753Flags and Pennants, 199 et seq., 493 et seq.gap(see Breakaway Gap)Head-and-Shoulders, 57, 76 et seq.,470 et seq.Line, 22 et seq.premature, 92, 766reaction after, 462 et seq.(see Pullback)Rectangle, 21, 132, 483 et seq.Right-Angled Broadening Formation,153 et seq., 487 et seq.Right-Angle Triangle, 114 et seq., 213, 470,481Rounding Turn, 83, 477Symmetrical Triangle, 103 et seq.,245 et seq., 470 et seq.(see False move)(see Penetration)(Note: See Chart Examples under variouspatterns, showing breakouts.)Broadening Formation, 151 et seq., 747Right-Angled, 159 et seq., 487 et seq., 747Chart Examples, 160, 162, 163, 202,489Chart Examples, 143, 152, 157, 159, 479Broadening Top, 155 et seq., 483Chart Examples, 156, 157, 158, 159, 479, 485in Dow-Jones Industrial Average, 389Chart Example, 531Brooker, Brian, Chapter 5.1Bull Market, Chapters 3, 4, 5, 38; 207 et seq.,321 et seq., 359, 426, 428, 460,473 et seq., 502, 522, 526, 537,577, et seq., 613, 747angle of advance, 260 et seq., 428Basing Points in, Chapters 28, 28.1beginning of, in Averages, 30Dow Theory signal, 32Flags and Pennants in, 198, 200Intermediate Trends, 273 et seq.Major Trend, Chapter 15measuring rules, 469scale order systems in, 613Secondary Correction in Averages, 35start of trend, 87, 113 et seq. 125, 126steps of advance, 462Support and Resistance Levels in,246 et seq.trendline penetration as signal, 270
775trends, comparative, 381, 397, 420, 421velocity of price movements, 611volume during, 320 et seq.(see Reversal)(see Top)(Note: Bull Market phenomena are takenup in connection with eachtechnical principle and aredemonstrated in the accompanyingillustrations.)Bull Traps, 182, 183, 186, 403Buy and hold investing, 370Table, 370Buying at the top, 587Buying signalsBollinger Bands, and, 653 et seq.MACD, and, 653in Moving Averages, 509, 648 et seq.preparatory, 456(see Basing Points)(see Breakout)(see Patterns)(see Turtles)
CCall, 747margin, 426option, 747Candlesticks, 10Chart Example, 414Capital, use of, Chapters 40, 41, 42, AppendicesA, Egain, 360 et seq., 527CANSLIM, 393“Cats and dogs,” 18, 397, 748Channel, Trend, Chapter 14; 268–9, 748(see Convergent Trend)(see Descending Trend Channel)(see Divergent Trend)(see Parallel Trend Channel)(see Trend Channel)(see Trendline)Charting methods, Chapter 19, Appendix BCharts, Chapter 2; 7, 748candlestick, 748commodity, Chapters 16, 16.1, Appendix Cdaily, 9–10(Note: All Chart Examples shown that arenot otherwise designated are dailycharts.)hourly, 9monthly, 10 93(see Monthly Chart)
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776Point and Figure, 9 748(see Point and Figure Charts)transaction, 9weekly, 9 et seq., 93(see Weekly chart)Chicago Board Options Exchange,Chicago Board of Trade, (CBOT), Chapter 17.2(CBOE), Chapter 17.2Church spire top, 182Clean-Out Day, 748Climactic Top, 440, 459–60, 462 et seq., 479, 748(see Blow-off)Climax Day, 748(see One-Day Reversal)Climax, Selling, 169 et seq., 748Chart Examples, 108, 175, 178, 414Closing of gap, 83, 212–13, 247, 748Closing price, 10, 22–3, 29, 30, 32, 35, 35, 37,39, 748Coil, 748(see Symmetrical Triangle)Colby, Robert, 41, 53Commissions, 359, 396–8, 439, 467 et seq., 748Commodities, Chapter 16, 16.1, Appendicies C,E; 433chart methods used for, 308chart patterns, 639, 641, 643, 645, 647, 665divergence, 665environmental influences, 640, 665Gap volume, 645hedging, 640, 641 et seq., 659 et seq., 665stocks with options, Chapter 17.2important concepts in, 665market timing indicators, 644Moving Averages, 644 et seq.price gaps, 641stochastics, 654, 655, 657 et seq.Stop-loss orders, 641 et seq., 665support and resistance, 640, 641, 642, 645,649trends, 642 et seq., 644, 645, 649trendlines, 642 et seq., 665weekly charts, importance of, 642 et seq.,651, 665Chart Examples, 641, 643, 644, 645, 648,656, 657, 659, 661, 663, 664, 665Common Gap, 214 et seq., 748Chart Examples, 222, 495Common stock versus preferred stock, 381Comparative relative strength, 748Complex Head-and-Shoulders(see Multiple Head-and-Shoulders)Composite average, 15, 294, 749Composite Leverage, Appendix A,Chapter B; 749
Technical Analysis of Stock TrendsComposite Market Theory, 24Computer, Chapter 17.1Conant, James Bryant, MidwordConfirm, failure to, 28Confirmation, 749Dow Theory(see Dow Theory)volume, 60 et seq., 647Congestion, 749(see Patterns)(see Trading Range)Conservative stocks 490versus speculative stocks, Chapters 20, 24;592, 618–9Consolidation Pattern, Chapters 8, 9, 32;100 et seq., 129, 461, 749Chart Examples 516, 525, 527(see Ascending Triangle)(see Descending Triangle)(see Flag)(see Head-and-Shoulders)(see Right-Angle Triangle)(see Scallop)(see Symmetrical Triangle)Contact with trendline, Chapter 29(see Trend Channel)(see Trendline)Continuation(see Consolidation)(see Runaway Gap) patternConvergent Trend, 162 et seq., 194 et seq.,454–5, 456, 457, 458, 487 et seq.,491 et seq., 496 et seq., 749(see Pennant)(see Wedge)Corn, 639, 641, 643, 657, 663Chart Examples, 641, 643, 645, 657,663Correction, 749(see Dow Theory)(see Rally)(see Reaction)Costs of trading, 396–8Covering of gap, 749(see Closing gap)Cradle, 250, 527, 749Chart Examples, 105, 108, 111, 125, 140,193, 265, 293, 482, 526, 547(see Apex)
DDailycharts, 8–10range, 750
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Index(Note: All Chart Examples shown that arenot otherwise designated are dailycharts.)Day Trading, 205, 208, 373Delphic Options Research, Resources(see Options Research Inc.)(see Portfolio Risk/Profit Exhibits)Delta Neutral, 619Demand, 750Dow Theory, 28 et seq.(see Supply and demand)Dennis, Richard, Appendix EDerivatives, Chapter 17.2, Appendix CImportant concepts in, 665(see Options)Descending Trend Channel, Chapter 29;499 et seq., 750Chart Examples, 158, 196, 261, 266, 267,269, 271, 272, 499Descending trendline, Chapters 14, 29; 750(see Descending Trend Channel)(see Descending Triangle)(see Diamond)(see Fan line)(see Flag)(see Symmetrical Triangle)(see Trend)(see Trendline)(see Wedge)Chart Examples, 71, 138, 141, 145, 158, 169,171, 175, 193, 196, 216, 217, 218, 228,238, 248, 250, 255, 263, 266, 272, 273,274, 288, 499Descending Triangle, 120 et seq., 186, 248, 481,502, 537, 750measuring formula, 750Chart Examples, 121, 122, 123, 124, 140,148, 165, 171, 186, 192, 266, 322, 361,521, 524Diamond, 162 et seq., 487 et seq., 502, 750as consolidationChart Example, 164measuring formula, 750as ReversalChart Examples, 97, 164, 165, 167, 490DIAMONDS, Chapters 17.2, 18.1Distribution, 18, 58–9, 118 et seq., 162,486, 750under cover of strength, 135Discipline, 311Dissecting Dow Theory, Chapter 5.1Divergence, 28 et seq., 651, 652, 655, 659, 662,663, 665, 750in commodities, 651, 665MACD, and, 651, 653
777negative, 759pattern trend, 750stochastics, 654 et seq.Relative Strength Index, 662, 663Divergent Trend, 127, 454–5, 456, 457, 458, 750(see Broadening Formation)Diversification, Chapters 31, 38, 42; 395,398 et seq.Dividends, 360 et seq., 381, 632, 751Doctor Johnson, About Editorial PracticesDonchian, 308, 690Dormant Bottom, 91 et seq., 751Chart Example, 93Double Bottom, Chapter 9; 487 et seq., 502, 751measuring formula, 751Chart Examples, 130, 141, 317, 488, 549, 571(see Multiple Bottom)(see Triple Bottom)Double Top, Chapter 9; 487 et seq., 502, 549, 751measuring formula, 751Chart Examples, 140, 143, 145, 220, 245, 272278, 495(see Multiple Top)(see Triple Top)Double Trendline, 264 et seq., 270, 751Chart Examples, 265, 267Dow-Jones Averages 751(see Averages)(see Dow Theory)Downtick, 752Downtrend, 509 et seq., 546, 563, 752Major, 537, 542, 544(see Trend)Dow Theory, Chapters 3, 4, 5, 5.1; 3, 23 et seq.,55–6, 73–4, 460, 473 et seq.,475 et seq., 502, 577, 578 617one-hundred and eight year record,Chapter 5.1sixty-year record, Chapter 5trader, 475Chart Examples, 51, 52Drawdown, Chapter 42Dreman, David, 598, 615Dullness on reactions, 480Dunn and Hargitt, 308
EEdge, 427, 429Eighths/decimals, PrefaceEnd run, 250, 752Chart Examples, 109, 245, 250Entrails, 24Equilibrium market, 752Equity Analytics, Ltd., 652
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778
Technical Analysis of Stock Trends
ETFs, 386Evaluation, 483 et seq., 528Evaluative Index, Chapter 38; 475 et seq., 538,
580, 583, 618methods, Chapters 38, 41; 362Ex-dividend, 121, 630 et seq., 441 et seq., 521,527, 529, 638, 752gap, 139, 214, 630 et seq., 752Exercise, 752Exhaustion Gap, 63, 223 et seq., 440, 458, 491,493, 496 et seq., 752Chart Examples, 156, 213, 220, 224, 267,478, 486, 495Expenses, 468Expiration, 752
FFailure of patternAscending Triangle, 118Head-and-Shoulders, 58 et seq.Symmetrical Triangle, 110Failure of Support, 242 et seq., 541Failure to confirm, 28–31, 37–8Faith, Curtis, Appendix EFalse move, 62 et seq., 83 et seq., 106 et seq.,135–6 184, 262 et seq., 752Chart Examples, 107, 109, 110, 191, 245,250Fan Line, 275, 389, 753Chart Examples, 71, 273, 274, 276, 277Filing of charts, 638Fin de siècle, 182Five-Point Reversals, 158, 753(see Broadening Top)Flag, 127, 190–200, 259–60, 444 et seq., 470,491–496, 502, 753measuring formula, 757Chart Examples, 66, 96, 122, 169, 190, 191,192, 193, 194, 195, 196, 197, 199, 200,202, 203, 213, 221, 224, 269, 321, 494,524, 556Floating supply, 391, 753Fluctuations, 15, 17–18, 513Formation, 753(see Pattern)Formula, 757ascending triangle, 744Composite Leverage, Appendix A,Chapter Bdescending triangles, 750diamond, 750double bottom, 751double top, 751falling wedge, 752
flag, 753Head-and-Shoulders, 757on balance volume (OBV), 759Pennants and Flags, 753Rectangles, 762relative strength, 665, 762Rising Wedge, 763Runaway Gap, 763stochastics, 658 et seq., 764Symmetrical Triangles, 765Tops and Bottoms, 71, 747Triangles, 767Front-month, 753Fundamental analysis, 6–7, 677 et seq.Fundamentals, 3–6, 13, 362, 505, 618, 753Futures, Chapters 16, 16.1, 17.2, Appendices C, Ebonds, Chapter 17.2chart patterns, 639 et seq., 641 et seq., 645,646, 647, 649, 665commodities, Chapter 16, Appendix CDow Jones, CBOT, Chapter 17.2environmental influences, 640, 665hedging, Chapter 17.2, Chapter 42; 334, 640,641, 659 et seq., 665Moving Averages, 644 et seq.open interest, 640, 659 et seq.options on, Chapter 17.2; 347 et seq.price gaps, 641short sales of securities, Chapter 25stop-loss orders, 641 et seq., 651,665support and resistance, 639 et seq., 640,641 et seq., 644, 645, 649trendlines, 642 et seq., 644, 665trends, 642 et seq., 644, 645, 649volume, 640, 645, 658, 659 et seq.Chart Examples, 641, 643, 644, 645, 646,647, 648, 650, 653, 657, 657, 659, 661,665
GGains and losses, percentage, 614–5Galbraith, John Kenneth, 402Gambler's Anonymous, Resources, 373, 599Gambler's Ruin, Appendix D, 599Gap, Chapter 12; 169 et seq., 496 et seq.,753in averages, 228–9in commodity charts, Chapter 16, 16.1;641 et seq.measuring, 757(see Area Gap)(see Breakaway Gap)(see Closing of gap)
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Index(see Common Gap)(see Ex-Dividend Gap)(see Runaway Gap)(see Overnight Gap)Garbage Tops, 655Gates, Bill, 295Graph(see Chart)Graph paper(see Scale)(see TEKNIPLAT)Greenspan, Alan, 303, 388Group averages, 460habits, 398 et seq., 420
HHabits of stocks(see Sensitivity)Hairtrigger stop, 439, 455Half-Mast, 196, 754Chart Examples, 96, 111, 117, 191, 192, 195,196, 197, 200, 202, 203, 213, 478, 484,494Halfway point(see Half-Mast)Haruspication, 52Harvard Fair Harvard, MidwordHead-and-Shoulders, 59–81, 216, 247 et seq.,256–7 262 et seq., 282, 360, 390