Volume 12 Article List

January 1994

The Haurlan Index

The Haurlan index, which was originated by the Trade Levels, Inc., advisory service, has received comparatively little attention unfortunate, as it has proved to be effective in signaling tops and bottoms
By Paul E. Carroll.

Interview: Chatting With Marc Chaikin

Veteran technician Marc Chaikin, senior vice president of Instinet Corp., got started in the financial industry with most fortuitous timing: He was issued his stockbroker’s license the very day that the bear market of 1966 ended. Over the years, Chaikin gravitated to trading, turning to technical research when fundamental research faltered and disappointed, and along the way devised the indicator that bears his name, today included in many software technical analysis packages. STOCKS & COMMODITIES interviewed Chaikin on how he developed the Chaikin oscillator, how keeping track of money flow is crucial and why you should avoid timing the broad market on a short-term basis.
By Thom Hartle.

Using the Tick in a Short-Term Indicator

The tick index, the net difference of the number of stocks last traded on an uptick from those last traded on a downtick, is a well-known indicator, but it’s got a problem. The raw number result is volatile, perhaps too volatile for some. What to do? Here, then, is a way to smooth out the noise to identify short-term trading opportunities.
By Daniel E. Downing.

Stock Market Risk: A Monthly Look

Have you ever wanted to know what the actual statistics of the month-to-month risk in the stock market are? This article looks at the question and formulates a possible reason.
By John Kean.

Polarized Fractal Efficiency

What is fractal geometry, anyway, and how do you use it? Well, you’ll find out here. Hans Hannula of MicroMedia describes the construction and use of an indicator derived from fractal geometry, the mathematics that describe chaotic systems.
By Hans Hannula, PhD, CTA.

Using Options in Takeover Situations

Sometimes, a takeover situation can be as absorbing as watching a professional tennis match or reading an exciting thriller. Can you take advantage of the situation as an observer? Well-known options expert Lawrence McMillan explains how you can use stock options to participate in the activity of the stocks that have become takeover candidates.
By Lawrence G. McMillan.

Price/Oscillator Divergences

Have Dow theory divergences always fascinated you? Well, you’re in luck. Here’s a primer on observing divergence between indicators and prices to generate trading signals.
By W. Lawson McWhorter.

Smoothing Data With Faster Moving Averages

Has the lag time of moving averages ever irritated you? Well, there is a way around it: a modified statistical version of exponential smoothing with less lag time than the standard exponential moving average that is used in securities technical analysis, a double exponential moving average.
By Patrick G. Mulloy.

Quick-Scans, Reviews

MATLAB for Windows 4.0
MATLAB Neural Network Toolbox
Personal Hotline 6.6.

February 1994

Evolution of a Timing Model

How does a trading model evolve? Formula Research newsletter publisher Nelson Freeburg discusses the evolution of a trading model and explains such concepts as out-of-sample testing, parameter sensitivity testing and the inclusion of nonprice indicators for timing trades.
By Nelson Freeburg.

The Inflation/Deflation Phases of the Stock Market Cycle

Veteran analyst Martin J. Pring explains how the commonly known four-year stock market cycle actually contains lesser-known inflation/deflation phases, the knowledge of which would be very advantageous for asset allocation.
By Martin J. Pring.

Bonds vs. Stocks: A Historical View

Relative value is a familiar buzzword when it comes to comparing bonds and stocks. But is it accurate? There are criteria that must be specified for comparisons, as Tim Hayes of Ned Davis Research Inc. points out; for one, the time periods the comparisons are drawn from.
By Tim Hayes.

Lattice Trees

The lattice approach to option pricing is used to build a tree, so to speak, of futures prices. The price tree can be recomputed intraday to update the expected price range. These dynamic trees can be used for risk control via price simulations and can also be used for trading. Here, we apply the various uses of lattice (or dynamic) trees to estimate prices for the Standard & Poor’s 500.
By Tushar S. Chande, PhD.

Interview: Charles Faulkner and Neuro-Linguistic Programming

Whether you interpret the acronym NLP as Neuro-Linguistic Programming or natural learning process, the cognitive process of trading is what Charles Faulkner, of Chicago-based Mental Edge Trading Associates and a certified Neuro-Linguistic Programming trainer, studies. One aspect of Neuro-Linguistic Programming is a technique for overcoming mental impediments to success. A trader himself, Faulkner has studied successful traders extensively. By modeling the mindsets of successful traders, Faulkner seeks to help other traders follow those same successful patterns and help them manage their emotional states when trading. Faulkner shares his insights on applying successful trading skills.
By Thom Hartle.

Smoothing Data With Less Lag

Last time, Mulloy discussed basic moving averages, introduced a new filter called Dema1 and demonstrated a method with which to utilize exponential moving averages. Mulloy also explained how this new filter could be used in the moving average convergence/divergence (MACD) indicator. Now, Mulloy summarizes with more filtering techniques for the MACD and trading the Nasdaq.
By Patrick G. Mulloy.

The Inflation/Deflation Phases of the Stock Market Cycle

Veteran analyst Martin J. Pring explains how the commonly known four-year stock market cycle actually contains lesser-known inflation/deflation phases, the knowledge of which would be very advantageous for asset allocation.
By Martin J. Pring.

Trading and Gambling

Gambling is an ancient behavior. Humans have wagered on the outcomes of chance events since prehistoric times. Ruth Roosevelt, director of the Wall Street Hypnosis Center, explains how trading and gambling have certain characteristics in common and how not to let them become examples of problem behavior.
By Ruth Roosevelt.

The MACD Momentum Oscillator

The moving average convergence/divergence (MACD) is one of the most popular indicators around. Here, Barbara Star reviews and updates ways to use it.
By Barbara Star, PhD.

REVIEWS, QUICK-SCANS

The Spiral Calendar
Ultra Market Advisor 2.0
Business Cycle Indicators
Fibonacci Applications and Strategies
Q-Trax 3.0
Telescan System 3.

March 1994

Using Stops to Your Advantage

Ever feel as though the locals on the floor of the exchange that you trade seem to know where you place your stop-loss orders? Professional traders know where stop-loss orders are, not because someone told them, but because the stops are always in the same place. Learn how a floor trader views the market, the price levels where stop orders will accumulate and how you can avoid being caught.
By William I. Greenspan.

Advance-Decline Line Basics

It never hurts to refresh your memory on the basics. Here’s a primer on following the advance-decline line for the stock market.
By Daniel E. Downing.

Interview: Gerald Appel, With Systems and Forecasts

Gerald Appel, a well-known name in the annals of technical analysis, not only publishes the Systems and Forecasts newsletter, he is also a money manager with $200 million under management. But he may be best known for something he considers relatively secondary in his accomplishments, for he is also the originator of the popular and enduring moving average convergence/divergence (MACD) indicator. Ironically, however, he doesn’t understand what all the fuss is about with the MACD. So what does he feel is worth the fuss? STOCKS & COMMODITIES interviewed Gerald Appel to find out about the indicators he uses including the MACD and how he uses them.
By Thom Hartle.

Simulating Trading Portfolios

Trading commodities? Here are the steps to testing a trading system used for a portfolio of commodities. This article also discusses portfolio-level simulations, variable shift testing and money management.
By Ajay Jani.

Optimal Window Length for Moving Window Spectral Forecasting

Measure the optimal window length for a moving window spectral forecast.
By A. Denis Ridley, PhD.

Trading the Yen

Do you feel frustrated sometimes in your trading and wish you could get a blow-by-blow of what someone else is doing? Well, here’s Linda Satterfield to take STOCKS & COMMODITIES readers through a series of trades she executed in the September 1994 yen futures market and how it turned out.
By Linda Satterfield.

Strategies for Overcoming Fear

How many times has fear blocked your way, whether in trading or otherwise? Worse still, did you know it? Neuro-linguistic programmer Adrienne Toghraie explains how you may be sabotaging your own trading and how you can disarm and conquer that internal saboteur.
By Adrienne Laris Toghraie.

Using Candlesticks and Oscillators

Blending East with West, candlesticks with Western trading techniques and using the computer to boot: Combine candlesticks with oscillators.
By Gary S. Wagner and Bradley L. Matheny.

Quick-Scans, Reviews

Funds On-Line 1.0
ProfitCenter 2.217
Proview 6.0
Fractal Market Analysis
Formula Research
Channel Analysis.

April 1994

On Profit-Taking

Taking a profit should be so easy, but it never seems to be. Why is that? Veteran market analyst Perry Kaufman explains the whys and hows and also explains how profit-taking has advantages over straight trend-following.
By Perry J. Kaufman.

Optimizing Momentum

Longtime readers may remember the body of written work from STOCKS & COMMODITIES contributor Anthony W. Warren during the early days of this magazine, in particular Fourier transform and triple exponential smoothing (Trix). More recently, he has written about data filtering for trend channel analysis. This time, Warren explains how to identify the cyclical component to price data and tuning Wami, a momentum indicator that he has designed, to indicate buy and sell points.
By Anthony W. Warren, PhD.

Sidebar: Cycles, phase and power

Sidebar: WAMI spreadsheet

Sidebar: Derivation of equations for WAMI spectrum

Preprocessing Data and Fast Fourier Transform

Preprocessing data is a popular buzzterm today, but what is it and why do we do it? Well, here’s an explanation of data preprocessing and a tutorial on using fast Fourier transforms (Fft). Ffts are used to measure the power and frequency of the cycles within data. As STOCKS & COMMODITIES Editor Thom Hartle explains, knowing the cyclical nature of your data can be very helpful for selecting parameters for your favorite indicators.
By Thom Hartle.

Sidebar: What is a fast Fourier transform?

Sidebar: Excel fast Fourier transforms

Indicators in Trading Ranges and Trends

Traders use indicators for generating buy and sell signals in a market. But what indicators should you use and when? Here’s one private trader’s technique for recognizing trends and trading ranges.
By Bruce C. Kramer.

Sidebar: Indicators

Interview: Martin Zweig of The Zweig Forecast

Martin Zweig may be a familiar name to you, and that would not be surprising, considering how many different hats he wears: one as editor of The Zweig Forecast newsletter, one as chairman of the Zweig Fund and one as the head of the Zweig Total Return Fund not to mention one as panelist on the popular TV show Wall $treet Week, on which he has appeared since 1974. Zweig, who has $9 billion under management currently, has spent the past 32 years developing his market indicators and models. STOCKS & COMMODITIES spoke with Zweig on a variety of topics ranging from the importance of monetary policy for the stock market to sentiment.
By Thom Hartle.

Sidebar: Zweig’s super model

Determining Capital Amounts for Trading

Last month, Ajay Jani covered several topics crucial to developing a comprehensive trading plan, including the importance of portfolio level simulations and the ability to use risk-reduction strategies to increase profitability. This time, Jani discusses a method to logically determine the amount of capital necessary to begin trading and provides guidelines for developing the mental discipline for trading.
By Ajay Jani.

Options in Trading Ranges

Options have a natural appeal due to the limited risk aspect for the options buyer, but there is a tradeoff: Because of the time decay factor, options lose value. However, as David Caplan, publisher of the Opportunities in Options newsletter, points out, you can take advantage of the time value decay characteristics. Here’s how.
By David L. Caplan.

Quick-Scans, Reviews

TeleChart 2000 version 2 series
Windows on WallStreet 2.1
NeuralWare Professional II 5.0.

May 1994

The Technical Basis of Risk-Reward Analysis

Author and money manager Victor Sperandeo offers details on his investment approach in this excerpt from his latest work, Trader Vic II: Principles of Professional Speculation. Here, Sperandeo explains the dos and don’ts of risk-reward analysis.
By Victor Sperandeo.

Determining Leverage for Trading Systems

When your trading’s going your way, you’re apt to think about leveraging your trading based on your success in hindsight. However, leveraging can be a two-edged sword when it comes to profits and drawdowns.
By John Kean.

Sidebar: Spreadsheet analysis

Analysis of a Winning Trade

Winning traders tend to have something in common in at least one way, and that is the ability to make rapid trading decisions based on all the factors that affect the market. Here, private trader Gary Smith recounts a trade he made in November 1993 in stock futures and explains about the monthly, weekly, daily and intraday indicators that made that day an obvious buy.
By Gary Smith.

Sidebar: Commitments of Traders Objectivity in Elliott Wave-Based Trading

There’s no doubt about it. Elliott wave analysis can thoroughly confuse the uninitiated due to all the choices at potential turning points in markets. Only the correct wave label will be verified by subsequent market action. Can additional technical tools help identify the most likely turning points? Newsletter publisher D.W. Davies explains his use of cyclical channel analysis and the commodity channel index with Elliott wave analysis to identify turning points in markets.
By D.W. Davies.

Sidebar: Calculating an 11-period CCI

The Volatility Index

David Stendahl explains the volatility index (VIX), which measures volatility based on the implied values of eight Standard & Poor’s 100 (OEX) options from which the weighted volatility index is derived when combined.
By David C. Stendahl.

Interview: Gilbert Raff: From Medicine to Money Management

STOCKS & COMMODITIES readers have suggested that we interview someone who did not start his or her career in the financial community but was successful enough in the markets to change careers midstream to trading. Gilbert Raff is one such individual. Raff, who was a cardiologist with a background in physics who has also written for STOCKS & COMMODITIES, left his medical career to manage money. S&C Editor Thom Hartle spoke with Gilbert Raff about why he changed careers, the similarities between assisting people in managing their health and their money and the methods he uses to identify market opportunities.
By Thom Hartle.

Managing Risk With Options

Ever get the feeling you’re throwing good money after bad in your stock transactions? Ever feel your wallet getting lighter and lighter while it’s still in your pocket because of what your stock’s doing? Ever feel like selling it all and getting out of the market altogether? Well, fear not. Author and derivatives strategist Scott Fullman explains how to keep your wallet in place by using options.
By Scott H. Fullman.

Breadth Stix and Other Tricks

Interested in advance-decline indicators? Well, you’re in luck. Here, Chande reviews popular versions of these indicators and explains that since they are all derived from the same raw data, they have certain similarities. Chande explains how to derive a stochastic oscillator from market breadth data for market timing.
By Tushar S. Chande, PhD.

The Trading Saboteur

Traders may not realize they are sabotaging their own success. Here’s how to change that behavior.
By Adrienne Laris Toghraie.

The c-Test

We all know that thorough testing is the only way to determine whether a particular trading system or indicator is viable. William Eckhardt, the mathematician whose conversation with Richard Dennis helped bring about the Turtles, points out that before you spend time testing a method, you should first use a methodological test for dimensional coherency called the c-test.
By William Eckhardt.

REVIEWS, QUICK-SCANS

MetaStock and MetaStock Real-Time 4.0
Stock Data
The Director Series 2, MetaStock Utilities.

June 1994

Gold and the Business Cycle

Well-known market analyst Martin Pring takes a look at the relationship between the price of gold and the business cycle.
By Martin Pring.

Sidebar: The KST

Interview: It’s All in the Family: Sherman, Marian and Tom McClellan

The McClellan oscillator and the summation index are two popular technical indicators that have been around for more than 25 years, and in fact, the daily values are broadcast daily on Cnbc. These tools, which can be found in most software packages, are used for identifying turning points in the stock market, but it’s not often that you’ll find an in-depth explanation included. So we decided to go to the source and ask the McClellans themselves Sherman and Marian, who first devised the indicators, and son Tom. STOCKS & COMMODITIES interviewed Sherman, Marian and Tom McClellan about these technical tools that bear their name. All three of the McClellans participated in the discussion.
By Thom Hartle.

Sidebar: McClellan indicators

Price-Volume Rank

Imagine receiving a warning when the market was likely to collapse or being alerted when one of your favorite stocks was about to rally. What if these signals came from analysis that was simple enough to do without a computer and took only a few minutes a day to update, using just two pieces of information found in virtually any newspaper? Is this a dream? Maybe not.
By Anthony J. Macek.

Sidebar: P-V rank by hand

Three Myths About Trading a Small Commodity Account

“The New Timing Device” editor Kelly Angle disputes some common notions about trading commodities if you have a small commodity account. What are they?
By K.D. Angle.

Treasury Bond Put Options as an Intermarket Gauge

Here, “Wall Street Detective” editor Joe Duarte discusses using the Hines ratio, a sentiment indicator based on options activity, on the Treasury bond futures market as a trading tool for bonds and currencies.
By Joe Duarte.

The Market Facilitation Index

Here’s how trader Gary Hoover uses the Market Facilitation Index for day trading.
By Gary Hoover.

The Joy of Trading With Statistics

How can trading be a joy? Here are some statistical methods to compare the performance of trading systems.
By Ben Warwick.

A Genetic Algorithm System for Predicting the OEX

Since artificial intelligence made its debut within the pages of STOCKS & COMMODITIES, various and sundry methods by which neural networks can be used in designing trading systems have been proposed. Here, Yuret and Maza explain the development of a genetic algorithm system with which to forecast the OEX.
By Deniz Yuret and Michael de la Maza.

The Commitment to Trading

How far would you go to succeed in your trading? Commitment and achievement go hand in hand but they must be balanced.
By Adrienne Laris Toghraie.

Reviews, Quick-Scans

Propagator version 1.0
Ensign 5.

July 1994

Group Relative Strength Analysis Using Linear Regression

This equity trader and computer consultant presents an intriguing use of statistical analysis to measure the performance of stock groups for the purposes of asset allocation.
By Jaime V. Behar.

The Option Premium Ratio

Christopher Cadbury, member of the American Stock Exchange and book author, explains a sentiment indicator generated from the equity options market that identifies trading opportunities in the stock market.
By Christopher Cadbury.

On-Balance Volume Indicator

Of all the factors in trading that technicians learn to analyze, surely price and volume are the first two. Here, the basics behind this classic technical tool are explained.
By Bruce R. Faber.

Trading a Stock Using Technical Analysis

The search goes on for key indicators to help traders find profitable opportunities in the market. Here, STOCKS & COMMODITIES Editor Thom Hartle provides an example of a recent trade in a stock based on the foundations of technical analysis, price and volume.
By Thom Hartle.

Interview: James B. Stack, Big Sky Investor

Thomas Wolfe was wrong: You can go home again. Frank Russell did it when he returned to Tacoma, WA, after he established his well-regarded investment firm in New York, and James Stack did it when he returned to Montana to begin his well-regarded investing newsletters. James B. Stack, president of InvesTech Research, publishes InvesTech Market Analyst and InvesTech Mutual Fund Advisory newsletters. Here, Stack describes how he combines economic, monetary and technical analysis and also shares his evaluation of the current market.
By Thom Hartle.

Stress and Trading Success

Ari Kiev, who is president of the Social Psychiatry Research Institute, discusses the role that stress plays in trading success and failure.
By Ari Kiev, M.D., J.D.

First-Hour Breakout System

Here’s a mechanical trading system for the Standard & Poor’s 500 futures market.
By Malcolm McNutt.

Reviews, Quick-Scans

3D for Windows 1.1
Options Laboratory
WindowTrader
Candlestick Forecaster, Master Edition 4.1
NeuroVe$t Journal
Geometry for Markets II
Value-Based Power Trading.

August 1994

The Option Premium Ratio and the DJIA

The discussion on the option premium ratio continues, with more examples on forecasting short-term movements in the DJIA.
By Christopher Cadbury.

Solving the Portfolio Puzzle

STOCKS & COMMODITIES Contributing Editor Tushar Chande presents guidelines for designing a stock portfolio.
By Tushar S. Chande.

Studying Price Behavior

Price behavior? Can you really read it? This article points out ways to look at price behavior to give you insight into possible consistencies, such as how much today’s range typically overlaps yesterday’s range. Not only that, how often does today’s range not include yesterday’s closing price? Being armed with such knowledge could help you to make trading decisions by knowing the characteristics of your favorite markets.
By Michael Daley.

On Trendlines, Money Flow Index and the Elliott Wave

Here’s an example of wave and indicator analysis using the money flow index, trendlines and Elliott wave.
By Brian D. Green.

The Pivot Point for Trading

Want to know what the pros use in trading? Well, you’re in luck. William Greenspan, the founder of the Commodity Boot Camp and a Chicago Mercantile Exchange floor trader, explains how he uses the pivot technique in trading.
By William I. Greenspan.

v: Finding Value Statistically: Geraldine Weiss of Investment Quality Trends

Have you ever wondered about how to find real value in the markets? Well, this may be the solution to your problem. Geraldine Weiss started the Investment Quality Trends newsletter in 1966. Recently, IQ Trends was included in the seven-member honor roll for performance in up and down markets by the Forbes/Hulbert survey of investment letters. STOCKS & COMMODITIES interviewed Weiss about how she started out, the methods she uses for selecting stocks and her thoughts about the market.
By Thom Hartle.

Maximizing Bond Fund Profits

A new indicator based on Barron’s Gold Mining Index is introduced for timing bond mutual funds.
By Jay Kaeppel.

Trading out of a Slump

Anyone who’s traded a while can tell you that finding yourself in a slump from time to time is inevitable. But a slump shouldn’t be a crippling hurdle; here, Toghraie explains how to climb out of that pit of trading despair and be on your way in the market again.
By Adrienne Laris Toghraie.

Quick-Scans, Reviews

Ewt-101
Instant Investor, Spring 1994
TopVest version 1.3
Nature’s Pulse version 4.0
ChartBook System version 3.2.

September 1994

A New Daily Advance-Decline Line

Here’s a new look at an old favorite and how to modify the data to form a brand-new indicator called the 1,000-line indicator, designed to identify when the stock market is setting up reversals.
By Daniel E. Downing.

The Bandpass Indicator

Here’s an indicator that can be adjusted to be a leading indicator of market reversals based on the cycles in the price data, presented by a longtime S&C contributor.
By John F. Ehlers.

The Relative Strength Index

Here’s a primer on the relative strength index, which helps identify market reversals and trends.
By Bruce Faber.

Interview: Stephen Leeb of Personal Finance With the Big Picture

If a diverse educational background ever lent itself to analyzing the markets, surely that of Personal Finance and The Big Picture newsletters editor Stephen Leeb would do so, with degrees in economics, mathematics and psychology. With that in mind, how does he see the markets? We decided to find out. Leeb spoke to STOCKS & COMMODITIES about what his work shows are the important driving forces for the market, his longer-term view of inflation and the indicators he uses.
By Thom Hartle.

Trading the Ratio of the RSI

Here’s a method for trading the spread between the Swiss franc and the Deutschemark. The technique involves using the ratio of the relative strength index (RSI) of each currency to identify trading points.
By Russell Rhoads.

Trading Hesitation

At one time or another, traders may second-guess their own methods and fail to follow their strategies to disastrous results. The founder of the Wall Street Hypnosis Center explains how to return to consistent performance.
By Ruth Roosevelt.

Candlesticks and the Malaysian Stock Market

Here’s a look at how candlestick technique is applied to the Malaysian stock market, from the developers of Candlestick Forecaster and the director of PI Capital Research in Malaysia, who teaches Malaysian traders on Western technical analysis.
By Gary S. Wagner, Bradley L. Matheny and Fred K.H Tam.

Momentum Trading Using Fourier/Wami Optimization

Technical analysis and the use of indicators may lend itself to well-defined rules for trading, but most traders develop their methods into more of an art form. Here, a longtime STOCKS & COMMODITIES contributor explains the use of prestored indicator designs and ways to evaluate and refine custom trading rules.
By Anthony W. Warren, PhD.

REVIEWS

Cash in on Chaos
Futures Pro version 2.0
AIM for Windows version 2.01.

October 1994

The Rate of Change Indicator

The rate of change is an indicator that measures the pace at which price is changing. Tracking the rate of the change of price can confirm trends and forewarn of market reversals. Here, then, are some guidelines for using this popular indicator.
By Bruce R. Faber.

Developing a Trading Strategy

Trading strategies have several required characteristics, ranging from the ability to provide clear, unambiguous signals to the ability to validate each trade against the strategy. Developing and validating trading strategies is an absolute necessity in becoming a successful trader. Here, then, are some suggestions for designing a trading strategy.
By Frank McGuff.

Advance Breakdowns and Breakouts in Oscillators

Oscillators have always been a popular tool for traders. Here are some guidelines from a leading market analyst on various ways to apply this widely used technique.
By Martin J. Pring.

Expiration Month and Strike Price for Options

It never hurts to brush up on the basics, we always say, and so here are the basics of options as well as an analysis of the correct option expiration month and strike price to achieve maximum profit from each trade.
By Robert M. Peevey.

Trading the S&P With a Neural Network

Here’s an example of the steps that one trader took to use a neural network to trade the stock market index futures.
By Jeremy G. Konstenius.

Turning Trading Weaknesses into Strengths

The founder of Trading on Target explains how to identify your trading weaknesses and turn them into strengths.
By Adrienne Laris Toghraie.

Using a Moving Average System

Moving averages was one of the first trading methods used by technicians. Here are the basics to using a moving average system.
By Lars N. Kestner.

Interview: Speaking of Seasonals: Steve Moore of Moore Research Center

The concept of seasonality is certainly not new. “To every thing there is a season,” Ecclesiastes and, more recently, the 1960s rock group The Birds said. And of course, for commodity traders the commodity markets have always offered seasonal trading opportunities. This month, STOCKS & COMMODITIES interviews Steve Moore, a trader and market research analyst who focuses on seasonal and statistical studies of the futures markets. Topics covered include seasonal trades, correlation in markets, options trading and money management.
By Thom Hartle.

Money Supply and the Leading Economic Indicators

This longtime STOCKS & COMMODITIES contributor and author discusses the relationship between the money supply and the composite index of leading economic indicators.
By Clifford J. Sherry, PhD.

The DJIA and the Stock Index Futures Cycle

Do phases of the three-month futures cycle usually coincide with periods of greatest weakness or periods of substantial strength in the stock market? This American Stock Exchange trader details DJIA performance in relation to the beginning trading periods for the lead stock index futures contracts.
By Christopher Cadbury.

Quick-Scans, Reviews

NeuroShell 2
Aspen Graphics version 2.27
Tsunami
TR-200 Two Way Recorder.

November 1994

Are the Averages in Gear?

What is Dow theory really indicating when the industrial and transportation averages are out of sync? Here’s a Dow theory specialist to clarify.
By Richard L. Evans.

Developing an Expert System to Forecast the Stock Market

Nowadays, computers are often used to develop rule-based trading strategies. Frequently, these rules will be based on work provided By experts; such rule-based models are generally called expert systems. Here, Mike Flanagan takes you through the process of developing an expert system for generating medium- (three- to six-month) and long-term (six– to 12–month) forecasts of the US stock market.
By Mike Flanagan, PhD.

The Bollinger Band and Trend

Here are ways to use Bollinger bands to judge the trending tendency of markets, using the distance between the upper and lower bands.
By John Forman.

Interview: Louis Navellier of the MPT Review

Modern portfolio theory (MPT) uses statistical analysis, screening and ranking of stocks to decide what and where to invest. Louis Navellier, money manager and publisher of The MPT Review, specializes in using this method for selecting stocks that will outperform the market. STOCKS & COMMODITIES asked Navellier for details on how he goes about selecting stocks and designing portfolios.
By Thom Hartle.

Using Visual Imagery in Trading

This psychiatrist, who conducts seminars on the psychology of trading, discusses the use of visual imagery to maximize trading results.
By Ari Kiev, M.D.

The Coppock Curve

The Coppock formula was introduced in Barron’s in 1962, devised by a San Antonio, TX-based technician named Edwin Sedgwick Coppock. Since then, the Coppock oscillator has been adopted and adapted By technicians around the world. Here’s how to use the Coppock curve to recognize major bottoms in the stock market.
By Elliott Middleton.

The Relative Strength Ratio-MACD Crossover Indicator

Here’s an indicator to identify positive and negative trading signals for stocks and mutual funds. The heart of the indicator involves applying an oscillator to the relative strength line. Trading signals result from identifying strong relative strength, which is a positive indication, while weak relative strength is considered a negative sign. Here’s how to lower the volatility of returns by applying the popular moving average convergence/divergence (MACD).
By Gilbert Raff.

Extremes Analysis of Interest Rates and Stock Prices

This former investment broker explains the relationship between declining interest rates and the lagged effect on the stock market.
By Mark C. Snead.

The Eight-Year Presidential Election Pattern

That seasonal patterns exist cannot be denied. But there may be patterns within those patterns, depending on how you look at them. The four-year Presidential cycle is a prime example or are we only looking at half the pattern there? Here’s a new look at the Presidential cycle.
By Adam White.

Quick-Scans, Reviews

Trading Recipes, version 2.05
Trading on the Edge
Braincel, version 2.3
StreetSmart, version 1.0
MegaTech Chart System, version 2.03.

December 1994

Seasonal Tendencies for Range Expansion

Identify the seasonal tendency of the commodity markets on a monthly basis and then compare the commodity market performance to a commodity fund manager’s performance index.
By K.D. Angle.

The Price Oscillator

What is this indicator and how can it be used? For neophytes to learn and seasoned traders who want to refresh their memories, check this out.
By Bruce R. Faber.

Back to Basics in Trading Stocks

Identifying the once or twice a year that the market is ready to embark on a very profitable move is the ultimate quest of anyone trading stocks. But in this day and age of artificial intelligence, with neural networks and fuzzy logic, using something as low-tech as the basic technical tools to find such opportunities may seem, well, backward. Gaining insight into the market’s future direction doesn’t have to be that complex.
By Gregory J. Kuhn.

Trading Markets With Stochastics

Here’s a pattern for trading markets using stochastics.
By Louis M. Lupo.

The Warrior’s Discipline of Trading

This occupational psychologist and a master of martial arts compares the disciplines that traders need in order to trade effectively with the disciplines of the samurai.
By Richard D. McCall.

Create a Hybrid Indicator

Interested in creating an indicator with a little bit of this from one kind of indicator and a little bit of that from another? Well, this may be your solution.
By Jim Ritter.

A Personal Neural Net Trading System

What goes through the mind of someone developing a neural network trading system? What are the steps involved in putting together something that mimics the mystery of the human mind? Here are some clues.
By James Stakelum.

Three Market Timing Strategies

Does market timing work? It depends on how you measure the results, according to this market timer. Here are three simplistic market timing strategies to help you understand the basics of market timing.
By Daniel J. Traub.

Interview: The Value Of Valuation: Peter Mauthe of Core Asset Management

Money management is simply a process of identifying what to own and when. While there are a number of ways to do so, one unique way is the work of Core Asset Management’s Peter Mauthe. STOCKS & COMMODITIES interviewed Mauthe about how he views the markets and what his management techniques are based on.
By Thom Hartle.

Quick-Scans, Reviews

Evolver version 2.1
GlobalView version 5.1
TickerWatcher version 7.0
Indicators & Trading Systems
The Best of RTR News Notes
Timing the Market.

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