451,454–5, 470–1, 497, 502, 514, 754Bottom, 75 et seq., 78, 476 et seq.,747Chart Examples, 7676, 78, 78, 84, 85, 87, 90,104, 120, 137, 216, 217, 218, 221, 276,390, 407, 415, 478, 563Consolidation, 200 et seq., 749Chart Examples, 123, 203, 204, 234, 482hybrid type; 754Chart Examples, 85, 87in Dow-Jones Industrial AverageChart Example, 545measuring formula, 71, 757Multiple, 78 et seq., 160 et seq., 476 et seq.,490, 759Chart Examples, 76, 81, 82, 83, 84, 88,137, 167, 216, 259, 263, 498Top, 59 et seq., 100, 228, 476, 757Chart Examples, 60, 61, 63, 64, 65, 66,67, 68, 69, 70, 71, 72, 81, 82, 83 84,88, 90, 137, 158, 164, 166, 175, 222,224, 226, 248, 251, 273, 299, 474, 482,498, 539, 543, 546, 557, 645Hedging, Chapter 17.2, Appendix C; 334,754
779Hedging, natural, 317, 582, 755, 759High/low pattern, 446High-priced versus low-priced stocks,Chapter 22; 397, 592–3Historicaldata, 754levels, 246 et seq.Holidays, 630, 637Hook day, 754Horizontal channel, 754trendline, 456, 457, 755(see Support and Resistance)Hourlycharts, 9Dow-Jones Averages, 15Hull, Blair, 619Hull Trading CompanySavior of American Capitalism, 176Hybrid Head-and-ShouldersFormation, 754Chart Examples, 85, 87(see Head-and-Shoulders)
IImplied Volatility Chapters 17.2, 28;as input to setting stops, 437Income, 360 et seq.IndexAverage Directional Movement Index(ADX), Appendix CComposite Leverage, Chapters 41, 42,Appendix A, Chapter BEvaluative, Chapter 38; 475 et seq., 538, 580,618Normal Range-for-Price, Appendix A,Chapter CSensitivity, Appendix A, Chapter DStandard & Poor’s 531; 644, et seq., 653,662, 665 et seq.Chart Examples, 296, 297, 644, 667, 668Wilder Relative Strength, 662, 663, 664,665, 768Index Futures, Chapter 17.2Index Options, Chapter 17.2Index Shares, Chapters 17.2, 18.1, 20.1Industrial Average, Chapters 3, 4, 5, 5.1; 14–5,136, 174 et seq., 361, 577, 662 et seq.,755Chart Examples, 26, 27, 29, 31, 33, 35, 37,39, 176, 298, 531, 545, 576(see Averages)(see Dow Theory)Inside day, 755Insiders, 56, 755
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780Insurance function of short sale, 582, 618(see Hedging)Intermediate, Chapters 14, 30; 16–17, 27, 44,55–6, 59, 123, 231, 246 et seq., 251,289, 444, 449, 459–60, 497,499 et seq., 755Chart Examples, 26, 71, 134, 135, 171, 255,265, 492(Note: Intermediate moves appear onpractically all charts shown in thisbook.)Bottom, 359, 461, 465, 497(see Stop level)Chart Example, 1118(see Bottom)(see Reversal)Line, (see Support and Resistance)Rally, 462 et seq.(see Rally)(see Resistance)Reaction, 462 et seq., 497(see Reaction)Support, 462 et seq.(see Support and Resistance)Top, 360, 461, 465, 497Chart Examples, 108, 134, 490(see Reversal)(see Top)Trend, Chapters 14, 29;28, 73 134, 363Internet, Chapters 17.1, 23, ResourcesInverted Bowl, 755(see Rounding Top)Triangle, 755(see Broadening Formation)Investment, Chapters 17.1, 18.1, 20.1;359 et seq., 618–9Investor, long term, Chapters 17.1, 18.1,20.1Irony, 505Irrational Exuberance, 388Island, 227–8, 502Chart Examples, 163, 216, 226, 228, 495,529, 562Reversal, 755
JJack be nimble, Chapter 18.1johnmageeta.com, an obsolete url of theMagee letter, 450John Magee Technical Analysis,669Jorion, Philippe, Chapter 42; 600 et seq.(see VAR)
Technical Analysis of Stock TrendsKKey Reversal day, Chapter 10.1; 181 e seq.,404 et seq.Chart Examples, 182, 183, 186Kilroy Bottom,(see Head and Shoulders Bottom)Kovner, Bruce, 446
LLaddering, 403, 756Lane, George, 654, 655, 657 et seq.LevelsSupport and Resistance, 239 et seq.(see Historical levels)Leverage, Chapters 17.2, 42, Appendix A; 346,379 et seq., 756(see Composite Leverage)Limit move, 756order, 630 et seq., 433, 756up/down, 756LineDow Theory, 21–2, 189–91, 756relation to Rectangle, 134–5Line(see Fan Line)(see out of line)(see Return Line)(see Stochastics)(see Supply Line)(see Trendline)Line, i.e., position, Chapter 9Logarithmic scale(see Semilogarithmic scale)Long-term investment, Chapter 18.1Basing Points, weekly, 574Dow Theory, 51, 52(see Investment)Losses and gains, percentage, 614–5Low-priced versus high-priced stocks,Chapter 22; 397, 592–3Loops, Lester, 674
M“M” Formation(see Double Top)MACD, Appendix C, 758Bollinger Bands, and, 652–654, 662buy and sell signals, 649 et seq., 651, 652crossover, 651, 652differential line, 651divergences, 651equilibrium line, 649
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Indexoverbought-oversold, 651, 652 et seq.stop-loss orders, 651trendlines, 651(see Bollinger Bands)(see Moving Averages)MacKay, Charles, Chapter 23; 401Macmillian, Lawrence, 353Magee Evaluative Index (MEI),Chapter 38, 42; 581 et seq., 608(see Evaluative Index)(see MEI)Diagram, 583MajorBottom, Chapters 3, 4, 5; 256Chart Examples, 87, 101, 124, 125, 478,554Markets, modern versus old-style(see Bottom)Move, 460Reversal, Chapters 3, 4, 5; 591Chart Examples, 87, 88, 92, 135, 474,539, 541, 563(see Reversal)Support, 464 et seq.Swing, Chapters 38, 41; 169–71, 241, 519, 593Chart Example, 5Top, Chapters 3, 4, 5; 285, 476Chart Examples, 88, 109, 130, 135, 170,267, 360, 474, 479, 485, 492 514test of, 31Chart Examples, 85, 124, 135, 361, 514,516, 517, 526, 528Trend, Chapters 3, 4, 5, 15, 38, 41, AppendixE; 59 et seq., 169–71, 241, 321,359 et seq., 440, 462 et seq.,475 et seq., 481, 493, 499, 499, 502,507, 522, 525, 527, 578, 579 et seq.,591 et seq., 594Turn, 30 et seq., 100 et seq., 231, 356,475 et seq., 585, 593Chart Examples, 123, 360, 474(see Bear Market)(see Bull Market)Malraux, 175Managing manias, Chapter 23; 402Managing runaways, 406Mandelbrot, Chapter 15.1; 338Manipulation, 130, 505Margin, Chapter 25; 38, 173, 207, 396–7, 433,505, 618, 756call, 426Marketon close, 756order, 433, 474, 482
781reciprocal, 476–7, 757running, 763timing indicators, 644 et seq.trending, 766(see Bear Market)(see Bull Market)Markets, modern versus old-style,207 et seq.Market Technician’s Association, mta.org,Mark to Market, 330Markup, 125Mast, 190 et seq., 259–60, 470, 493, 496, 757McClellan Oscillator, Appendix C; 757McDermott, The Redoubtable Richard,Appendix C, 743McMillan, Lawrence, Chapter 41;335Measuring, Chapter 32; 65 et seq., 122 et seq.,134, 167, 173, 195–6, 199, 202, 220,221formulas, 757(see Formulas)gap(see Runaway Gap)Chart Examples, 63, 125, 126, 234, 248, 269,474, 495, 524Megaphone, 757(see Broadening Top)MEI (Magee Evaluative Index), Chapter 38;581 et seq.Metastock, 679MethodFundamental, derided, 7Technical, defined, Chapter 1Methods of charting(see Charting Methods)MinorBottom, 436, 437, 443, 442 et seq., 451, 454,455, 458, 459, 465, 497, 499, 502Fluctuations(see Fluctuations)Move, 443, 460, 464, 491, 516, 517, 524Peak(see Minor Top)Reaction, 495Resistance, 462 et seq., 465Top, 251, 437, 438, 439, 440, 441 et seq., 444,449, 451, 454, 455, 458, 459, 460, 462,463, 464, 485, 490, 491, 496, 497, 499,499, 502, 525Trend, Chapter 14; 15, 17–18, 33, 242, 758Chart Example, 26ModelsBlack Futures, Chapter 17.2 Black-ScholesOptions, Chapter 17.2
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782C. Crawford, Chapter 17.2(see Resources)Cox-Ross-Rubinstein, Chapter 17.2Modern Portfolio Theory (MPT), Chapters17.2, 42; 338(see Pragmatic Portfolio Theory)Momentum indicator, 758Money Management stops, Chapter 16.1; 310,607Monthly charts, 9 et seq., 93Chart Examples, 5, 90, 91, 218, 238, 240, 242284, 286, 288, 289, 293, 381, 522,523Motley Fools, 365, 671Move(see False move)(see Major Move)(see Minor Move)Moving Averages, Appendix C; 34, 644 et seq.,665, 758Bollinger Bands, 652, 662, 665buy signals, 509, 647, 648, 649, 652crossover, 651, 652, 758dual, 647equilibrium line, 649 et seq.exponential, 507, 645, 647, 648, 649 et seq.in commodities and futures, 644 et seq.in Dow JonesChart Examples, 511, 576linear, 507long-term, 507MACD, 649 et seq., 758reversals, and, 652sell signals, 647, 648, 649, 652, 510short-term, 645 et seq.simple, 648, 649, 507, 508–9single, 646support and resistance, 649time spans, 645 et seq.weighted, 507, 648 et seq.Chart Examples, 511, 647, 648Multicolincarity, the dreaded error of, 759Multiple Head-and-Shoulders, 78 et seq.,161 et seq., 476 et seq., 490, 759Chart Examples, 76, 81, 82, 83, 84, 88, 137,167, 216, 259, 263, 498uncompletedChart Example, 259Multiple Tops and Bottoms, Chapter 9; 497, 502(see Double Bottom)(see Double Top)(see Triple Bottom)(see Triple Top)(see Support and Resistance)Murphy, John, Dean of Technical Analysts, 680
Technical Analysis of Stock TrendsNNarrow range day, 759Near progressive stops, 439Neckline, 59 et seq., 476–7, 497, 759Chart Examples, 61, 65, 67, 70, 71, 72, 83,85, 120as Resistance, 249 et seq.(see Bent neckline)Negative Composite Leverage, Appendix A,Chapter BNegative Divergence, 759New York Stock Exchange, 393, 431, 611, 612,618Niederhoffer, Victor, Renaissancespeculator, Resources(see Gambler's Ruin)Normal Range-for-Price, Appendix A, ChapterC; 395 et seq., 427, 437, 611–2, 616
OOdd lots, Chapter 26; 759On balance volume (OBV), Appendix Cformula, 759One-Day Reversal, 169 et seq., 224 et seq., 440,453, 458, 464, 491, 496 et seq., 502,760Chart Examples, 147, 171, 173, 220, 267,322, 478, 482, 486, 495, 499, 552One-Week ReversalChart Example, 540Opportunity versus security, 381Options, Chapter 17.2; 594–5, 760at-the-money, 348, 744call, 760covered call writing, 335fair value, 334in-the-money, 348Macmillan, 353out-of-the-money, 348 60-30-10 rule,334Options Research, Inc.(Delphic Options Research)(see Portfolio Risk/Profit, Resources)Diagrams, 674–5Order(see Limit order)(see Market order)(see Stop order)Oscillator, 9, 649 et seq., 654, 655 et seq., 665,760(see McClellan Oscillator)(see Stochastics)(see Wilder Relative Strength Index)
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IndexOut of line, 92Outright purchase, 397, 420, 425Overbought, 760Overbought/Oversold Indicator, Appendix C,760(see Bollinger Bands)(see MACD)(see MEI)(see Relative Strength Indicator)(see Wilder Relative Strength Indicator)Oversold, 760Overtrading, 611–12, 598 et seq.
PPanic, 18–9, 207 et seq., 246 et seq., 361, 370,470 522, 537, 760BottomChart Examples, 108, 115, 175, 296, 416,568(see Pearl Harbor Panic)(see Reagan Crash of 1987)Paper accounts, 632 et seq.Paradox in overtrading, 598 et seq., 611–12ParallelBlue, Chapter 29Red, Chapter 29Trend Channel, Chapters 14, 29Chart Examples, 64, 143, 196, 237, 259, 261,263, 265, 266, 267, 269, 271, 272, 273,293, 499Passive indexing, 383Pattern, 760Area(see Area Pattern)Broadening(see Broadening Formation)(see Broadening Top)Consolidation(see Ascending Triangle)(see Descending Triangle)(see Flag)(see Head-and-Shoulders)(see Pennant)(see Rectangle)(see Right-Angle Triangle)(see Scallop)(see Symmetrical Triangle)Continuation(see Consolidation)gap(see Common Gap)relation of to trend, Chapter 29return to(see Pullback)
783Reversal(see Ascending Triangle)(see Bowl)(see Broadening Formation)(see Broadening Top)(see Descending Triangle)(see Diamond)(see Dormant Bottom)(see Double Bottom)(see Double Top)(see Head-and-Shoulders)(see Multiple Bottom)(see Multiple Top)(see Rectangle)(see Rounding Bottom)(see Rounding Top)(see Saucer)(see Symmetrical Triangle)(see Wedge)Peak(see Top)Pearl Harbor Panic, 28Chart Examples, 101, 115, 125, 296, 488(see Panic)Pendulum swing, 482(see Symmetrical Triangle)Penetration, 463, 483, 487 et seq., 502, 760of patterns 3% rule, 59 trendline,262 et seq., 270 et seq., 502Pennant, 127, 169, 190 et seq., 449, 470, 484,491–496, 502, 760measuring formula, 757 Chart Examples,169–70, 171, 494(see Flag)Percentagegains and losses, 614–5scale(see Semilogarithmic scale)Perceptive habits, 506Philosopher’s stone, 339Point-and-Figure Charts, 9, 761Pool operations, 131–2Pornographyburlesque, 52(see Naked Options)foolish virgins, 295Portfolio, Chapter 42analysis, Chapter 42; Resourcesformula for Composite Leverage in,Appendix A, Chapter Bmanagement, Chapter 41risk, Chapter 42; 600 Appendix ARisk/Profit Reports, Resources, 674 et seq.statistics, 600Position, 370
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784Position Sizing, Chapters 26, 42, Appendix EPragmatic Portfolio Theory, Chapter 42; 602Controlling Portfolio risk, 606Portfolio Analysis, 605Risk Measurement, 603Summary of Risk & Money Managementprocedures, 607Texas hedge, 582Prechter, Robert, 6–7Preferred stock versus common, 381Premature breakout, 89 et seq., 121, 761Chart Examples, 106, 135Preparatory buying signals, 456Preparatory signals for short sales, 457Priceclosing(see Closing price)dividend ratio, 528earnings ratio, 528Normal Range for(see Normal Range-for-Price)range, 9, 638scales, TEKNIPLAT, 630Primary Trend, Chapters 3, 4, 5, 15, 38; 77–8,80 et seq., 246 et seq., 442 et seq.,459, 460, 482, 591, 616(see Bear Market)(see Bull Market)(see Major Trend)(see Trend)(see Trendline)Profittaking of, 482, 492, 499, 609 et seq.(see Blow-off)Program trading, 761Progressive stop, Chapter 27, Chapter 28; 455,476 et seq., 481, 484, 487 et seq., 493,495, 496 et seq., 499 et seq., 502, 469,761prophet.net, 679Proportion scale(see Semilogarithmic scale)Protective stop, Chapter 27; 361, 441 et seq.,449, 455, 459, 474, 482, 483, 492, 493,502–3, 469, 761Chart Example, 442Pullback, 65, 109, 134, 228, 247 et seq., 262,271 et seq., 476, 521, 761Chart Examples, 60, 64, 67, 69, 81, 82, 83,88, 108, 109, 121, 123, 130, 133, 137,140, 157, 164, 165, 192, 224, 226, 228,243, 248, 252, 255, 259, 273, 274, 276,277, 292, 321, 474, 482, 485, 490, 514,524(see Throwback)
Technical Analysis of Stock TrendsPurchaseoutright, 397, 420, 425Put, Chapter 17.2; 761
RRail Average, Chapters 3, 4, 5; 14–5Chart Examples, 26, 27, 29, 31, 33, 35, 37, 39(see Averages)(see Dow Theory)Rally, 59, 60 et seq., 75, 80 et seq., 112, 120–1,228, 361, 457, 458, 459, 460, 461,462 et seq., 465, 470, 482, 483,487 et seq., 495, 497, 499, 499, 501,502, 514, 517, 521, 524, 527, 761Tops, 761(see Pullback)(see Secondary)Range, 761Range, normal true, Appendix ERange-for-Price, Normal(see Normal Range-for-Price)Range of stock prices, 9, 638Range, trend, 264 et seq.Ratio scale(see Semilogarithmic scale)Reaccumulation, 109 et seq.(see Consolidation)Reaction, 110, 112, 120 et seq., 249, 256 et seq.,456, 461 et seq., 476 et seq., 478, 479,480, 481, 487 et seq., 492 et seq., 502,516, 520, 527, 469, 761(see Pullback)(see Secondary)Reagan, 582Reagan Crash of 1987, 334Chart Example, 296Realized gain or loss, 362Reciprocal, market(see Market reciprocal)Recovery(see Rally)Rectangle, 21–2, 115 et seq., 118, 129–38,189–91, 200, 213, 250, 255, 360, 451,453, 454–5, 456, 457, 458, 461 et seq.,470, 483, 487, 501, 502, 552, 762as Consolidation;Chart Examples, 120–1, 124, 131, 133,134, 136, 137, 138, 175, 192, 199, 208,213, 229, 244, 250, 266, 274, 486, 516,518, 519as Reversal;Chart Examples, 88, 134, 135, 143, 168,498, 542measuring formula, 757
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