2011年最后一个交易日是个熊市。空头最后30分钟的努力使SP500最终以低于年初开市价格收市。0.04点的差距有点幽默。体现了奥巴马无所作为的事实。
On Friday, the Standard & Poor’s 500 index closed at 1,257.60. That’s exactly 0.04 point below where it started the year. - The Washington Post
For the U.S. stock market, 2011 was a long wild ride to nowhere.
The broad S&P 500 endured huge daily swings but a year of drama left the index almost where it started. It lost a mere 0.003 percent, closest to unchanged since 1947, according to Standard & Poor's. - Reuters
上午市场多数时间在昨天收市位置下震荡，小企业表现较好一些。感觉多头力量不强，没有能力高收很多，于是中午前卖出了$TNA的股票，买入了$TZA。交易时机不是很好，损失了$TNA的利润，并且很长时间内$TZA处于亏损。收市前卖出了$TZA，有微小利润。
今年的交易结束了，一，二，三，八月份表现很好。其它月份一般或很差。很多需要总结的。
2011年12月30日星期五
2011年12月29日星期四
2011年12月28日星期三
2011年12月27日星期二
今日交易
美国股市全天开放，交易量大约是正常的一半。加拿大仍然休市。各指数基本没有变化。原油上涨。黄金下跌。
虽然经济不好，但是大家在节日期间的购物仍然非常活跃，许多人都在此期间购买打折商品，如电视，照相机，电脑，衣物。现在毕竟是一年中的最佳购物时期。各公司都努力在这期间多实现一些销售额。但是在同一环境下总有成功者和失败者。
几年前买手机时，黑莓还是很酷的选择。现在我们首选的是iPhone，买黑莓感觉挺傻的。今年24日在Futureshop网上定购了一个X-Box 360，到现在还有发货，连订单处于哪种状态都不知道，服务热线也没有人接听。而Dell的效率就好许多，去年24日在Dell网上定购的显示器到27日已经送到家了，中间不断有订单状态更新。这说明了公司的管理水平的差距。所以要做空$RIMM，$BBY。
一年就要过去了，现在看来去年专家及民众对于今年经济的预期太过于乐观了。明年的预期会现实一些了。
建立了$OTEX的多头，对公司的新CEO有信心；并且在周烛线图上显示到了熊市反转的时候。
虽然经济不好，但是大家在节日期间的购物仍然非常活跃，许多人都在此期间购买打折商品，如电视，照相机，电脑，衣物。现在毕竟是一年中的最佳购物时期。各公司都努力在这期间多实现一些销售额。但是在同一环境下总有成功者和失败者。
几年前买手机时，黑莓还是很酷的选择。现在我们首选的是iPhone，买黑莓感觉挺傻的。今年24日在Futureshop网上定购了一个X-Box 360，到现在还有发货，连订单处于哪种状态都不知道，服务热线也没有人接听。而Dell的效率就好许多，去年24日在Dell网上定购的显示器到27日已经送到家了，中间不断有订单状态更新。这说明了公司的管理水平的差距。所以要做空$RIMM，$BBY。
一年就要过去了，现在看来去年专家及民众对于今年经济的预期太过于乐观了。明年的预期会现实一些了。
建立了$OTEX的多头，对公司的新CEO有信心；并且在周烛线图上显示到了熊市反转的时候。
2011年12月26日星期一
2011年12月23日星期五
2011年12月22日星期四
聚会上的斯坦利杯(Stanley Cup)
一位同事的儿子所在的冰球队在伯灵顿的一家餐馆聚会。一位家长恰好在那期间负责管理北美职业冰球的冠军奖杯-斯坦利杯（据说奖杯不是长久由冠军队保管的，而是各处流动的）。他就把奖杯带到餐馆给队员们参观，合影。孩子们都很开心。
在北美许多冰球爱好者认为斯坦利杯比奥运冰球冠军分量更重。
2011年12月21日星期三
ZT: 奥克维尔YMCA的跆拳道班
晚上带加加去奥克维尔YMCA练跆拳道。加加以前练过一段时间，不过她没有认真学，现在她又要从头练了。她还挺有决心要练好的，希望她能拿到黑带。参加跆拳道班的孩子还真不少。一晚上至少有6个班。有不少做义务工的中学生（都是黑带）在带领学员们练习。
今天还有考黄带的考试，挺简单的，大多数是6，7岁的小孩子。考官有个是悉尼奥运会铜牌的获得者，她还把自己的奖牌带来了，让考试的孩子戴上和自己合影。加拿大的奥运冠军都是自己花钱练出来的，在成名前没有国家的支持。只有在代表国家比赛前，国家会给临时的补助，夺牌也没有丰厚的奖金。
这种体制节省纳税人的钱，也少了许多贪污腐败的机会。看看中国有多少运动队因为分“奖”不均而大打出手的；看看中国足协的官员们，裁判们，球员们受审的情形。
今天还有考黄带的考试，挺简单的，大多数是6，7岁的小孩子。考官有个是悉尼奥运会铜牌的获得者，她还把自己的奖牌带来了，让考试的孩子戴上和自己合影。加拿大的奥运冠军都是自己花钱练出来的，在成名前没有国家的支持。只有在代表国家比赛前，国家会给临时的补助，夺牌也没有丰厚的奖金。
这种体制节省纳税人的钱，也少了许多贪污腐败的机会。看看中国有多少运动队因为分“奖”不均而大打出手的；看看中国足协的官员们，裁判们，球员们受审的情形。
今日交易
市场相对平静，许多交易人员已经休假了。美国上个月房屋销售量低于预期。$ORCL盈利不好使科技股下跌。市场大部分时间走低，收市逐步走高。DOW和SP500微涨，NASDAQ降1%。黄金微升。
“Talk tough, and open the vaults.” That should be the slogan of Mario Draghi, the president of the European Central Bank.
上面引用的话用中文形容就是“悄悄地进村，打枪的不要”。
SP500现在是1240，和1999年初时一样。上海指数是2245，和2001年6月时一样。看到许多中国股民抱怨政府，抱怨庄稼，抱怨国企。比较一下，美国股市也是原地不动十多年了，但是没有那么多的抱怨。炒股就是要冒险的，不能赚钱了就是自己有本事，赔钱了就是环境不好。就像打麻将一样，高手，低手都有赢钱的时候。但长期下来，只有高手是净赢。如果心态不好，怨天尤人的注定要在股市中赔钱的。
今天是比较痛苦的，做多的股票大降，做空的大涨。平了$RIMM的空头，有22%的利润，比昨天少了近10%。卖掉了$IVR股，损失约10%。近来没有判断好方向；另外运气不好，有几笔按概率八成机会盈利的交易都失败了。本月中有六成的交易以赔钱收场。
“Talk tough, and open the vaults.” That should be the slogan of Mario Draghi, the president of the European Central Bank.
上面引用的话用中文形容就是“悄悄地进村，打枪的不要”。
SP500现在是1240，和1999年初时一样。上海指数是2245，和2001年6月时一样。看到许多中国股民抱怨政府，抱怨庄稼，抱怨国企。比较一下，美国股市也是原地不动十多年了，但是没有那么多的抱怨。炒股就是要冒险的，不能赚钱了就是自己有本事，赔钱了就是环境不好。就像打麻将一样，高手，低手都有赢钱的时候。但长期下来，只有高手是净赢。如果心态不好，怨天尤人的注定要在股市中赔钱的。
今天是比较痛苦的，做多的股票大降，做空的大涨。平了$RIMM的空头，有22%的利润，比昨天少了近10%。卖掉了$IVR股，损失约10%。近来没有判断好方向；另外运气不好，有几笔按概率八成机会盈利的交易都失败了。本月中有六成的交易以赔钱收场。
2011年12月20日星期二
2011年12月19日星期一
今日交易
今天市场高开，牛市持续了不到3个小时。经过两轮甩卖后，市场下降1%左右。没有足够推动牛市的消息，市场按照惯性继续熊市。预计欧洲在新年前会有个新的解决方案。
$BAC一度降到了$5以下，创造了新低。$T放弃了收购T-Mobile的计划。今年新上市的几只社交网络的表现都不好。上周五的$ZNGA已经跌了两成多了。
表现好的是两只加拿大股，$TD多头和$RIM空头。卖掉了$AGNC的期权，损失超过80%。如果当时买入的是ITM期权，会有约20%的利润。增加了$AMZN的看涨期权，$AMZN已经到了价格区间的底部。
The roller coaster ride has taken its toll. According to a Lipper study, the average U.S. mutual fund is down 5.9% on the year. Out of 8,036 funds tracked by Lipper, 92% of them – more than 9 out of 10 – are showing a loss. Many are deep in the red: Some of the major stars in the money management world (Bill Miller, Bruce Berkowitz, John Paulson and others) are down 30 – 40 percent or more. - Tycoon Report, Dec 19
$BAC一度降到了$5以下，创造了新低。$T放弃了收购T-Mobile的计划。今年新上市的几只社交网络的表现都不好。上周五的$ZNGA已经跌了两成多了。
表现好的是两只加拿大股，$TD多头和$RIM空头。卖掉了$AGNC的期权，损失超过80%。如果当时买入的是ITM期权，会有约20%的利润。增加了$AMZN的看涨期权，$AMZN已经到了价格区间的底部。
The roller coaster ride has taken its toll. According to a Lipper study, the average U.S. mutual fund is down 5.9% on the year. Out of 8,036 funds tracked by Lipper, 92% of them – more than 9 out of 10 – are showing a loss. Many are deep in the red: Some of the major stars in the money management world (Bill Miller, Bruce Berkowitz, John Paulson and others) are down 30 – 40 percent or more. - Tycoon Report, Dec 19
2011年12月18日星期日
2011年12月16日星期五
Poor RIM
最后一句太不厚道了 :)
A driver transporting 22 pallets of Research In Motion tablets from America to Ontario had his truck—and $17 million worth of BlackBerry PlayBooks—stolen.
The grand theft auto occurred while the driver was stopped at the Pilot Travel Center off State Road 67.
(Good luck to whomever tries to sell them. RIM couldn't do it.)
2011年12月15日星期四
2011年12月14日星期三
2011年12月13日星期二
2011年12月12日星期一
今日交易
欧洲领导人达成的协议没有让市场感到满意。看来欧洲靠自己的力量是无法解决问题了。几家美国大公司相继下调了收入预期，虽然有各自的原因，但如果这成为一个普遍现象后，美国经济复苏又会变得遥远了。近来美国经济指标不错，而中国的数据不让人乐观。
通货膨胀失控了还是很可怕的 -
市场全天熊市，各指数最多下降超过2%。收市前有个反弹，主要指数下降约1.5%。黄金降2.66%。白银降2.68%。
上海指数跌破2300了，如果同美股同步，应该在2500左右。
增加了多头头寸，$FMCN，$ORCL（下周二发布盈利数据）。市后$AGNC宣布分$1.4股息，同前几个季度一样。预计在除息日$AGNC股价可以上涨$1。
没有机会空卖COVERED CALL。
通货膨胀失控了还是很可怕的 -
 |
| 德国一战后通货膨胀，这一车钱是买一条面包的 |
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| 国民党时期发工资情景 |
市场全天熊市，各指数最多下降超过2%。收市前有个反弹，主要指数下降约1.5%。黄金降2.66%。白银降2.68%。
上海指数跌破2300了，如果同美股同步，应该在2500左右。
增加了多头头寸，$FMCN，$ORCL（下周二发布盈利数据）。市后$AGNC宣布分$1.4股息，同前几个季度一样。预计在除息日$AGNC股价可以上涨$1。
没有机会空卖COVERED CALL。
2011年12月9日星期五
今日交易
欧洲的领导人同意签署德法提议的更加严格控制预算的政府协议（如同小学生写的不再违反校纪的保证书？）。市场反应积极，把昨天损失的90%给涨回来了。
看到下面的文字想起了小时候大人教训孩子的话，“你再在外面惹祸我们可不管了！”。当下次孩子把学校的玻璃打碎了，或是把邻居孩子头打开了的时候，家长还得做掏钱赔偿，赔礼道歉等善后工作。
A day after European Central Bank President Mario Draghi damped expectations the bank would become more aggressive in supporting euro-zone debt markets, the ECB responded to a sharp rise in Italian yields by buying the country's bonds.
"I don't think the ECB is going to voluntarily come in and say because leaders have agreed [to better fiscal rules] it will back things up with aggressive action, but there is also nothing to stop the ECB from stepping up if it's forced to," said Nick Matthews, economist at Royal Bank of Scotland.
-Wall Street Journal
欧洲这些务实的政客。
在经济方面，中国的通货膨胀指数下降，美国的贸易赤字下降。
减少了股票的多头头寸，略有盈利。空卖的$SPY COVERED CALL 过期，实现盈利。其中一支REIT表现很差，因为调低了股息，下周找机会处理出去。其它两只REIT还可以，如果能保持现有股息，会有不错的回报。Day-trade时机把握不好。
看到下面的文字想起了小时候大人教训孩子的话，“你再在外面惹祸我们可不管了！”。当下次孩子把学校的玻璃打碎了，或是把邻居孩子头打开了的时候，家长还得做掏钱赔偿，赔礼道歉等善后工作。
A day after European Central Bank President Mario Draghi damped expectations the bank would become more aggressive in supporting euro-zone debt markets, the ECB responded to a sharp rise in Italian yields by buying the country's bonds.
"I don't think the ECB is going to voluntarily come in and say because leaders have agreed [to better fiscal rules] it will back things up with aggressive action, but there is also nothing to stop the ECB from stepping up if it's forced to," said Nick Matthews, economist at Royal Bank of Scotland.
-Wall Street Journal
欧洲这些务实的政客。
在经济方面，中国的通货膨胀指数下降，美国的贸易赤字下降。
减少了股票的多头头寸，略有盈利。空卖的$SPY COVERED CALL 过期，实现盈利。其中一支REIT表现很差，因为调低了股息，下周找机会处理出去。其它两只REIT还可以，如果能保持现有股息，会有不错的回报。Day-trade时机把握不好。
2011年12月8日星期四
2011年12月7日星期三
2011年12月6日星期二
2011年12月5日星期一
2011年12月4日星期日
2011年12月2日星期五
今日交易
美国失业率下降到8.6%，是2009年3月来最低的（不知道修正后到底是多少）。加拿大的失业率却在上升。工作都跑到美国去了。
股市高开低走，最终平收。经过一周的牛市，大家锁定了利润离场。本周SP500上涨了7.39%，其中有一半分别是在两天中的最后一个小时内实现的。
美国主要指数：
$RIMM宣布无法达到多次下调的全年预期盈利，股价再一次剧降。手中的$RIMM空头有了盈利。这次建仓的时机选择得有些愚蠢，应该在昨天高点时卖空。 经过几天的测试（通过Day-trade）发现支撑$FMCN股价的力量用尽，于是保留了空头头寸。
空卖的$SPY COVERED CALL盈利，有继续空卖下周的CALL。没有操作黄金。我认为近期市场还是区间震荡，多，空仓位较为平衡。
股市高开低走，最终平收。经过一周的牛市，大家锁定了利润离场。本周SP500上涨了7.39%，其中有一半分别是在两天中的最后一个小时内实现的。
美国主要指数：
| Last | Change | Today's % Change | 1 Week % Change | YTD % Change | |
| Dow | 12019.42 | -0.61 | -0.01% | 7.01% | 3.82% |
| NASDAQ | 2626.93 | 0.73 | 0.03% | 7.59% | -0.98% |
| S&P 500 | 1244.28 | -0.30 | -0.02% | 7.39% | -1.06% |
| Russell 2000 | 735.02 | 4.27 | 0.58% | 10.34% | -6.21% |
| CBOE VIX | 27.52 | 0.11 | 0.40% | -20.16% | 55.04% |
$RIMM宣布无法达到多次下调的全年预期盈利，股价再一次剧降。手中的$RIMM空头有了盈利。这次建仓的时机选择得有些愚蠢，应该在昨天高点时卖空。 经过几天的测试（通过Day-trade）发现支撑$FMCN股价的力量用尽，于是保留了空头头寸。
空卖的$SPY COVERED CALL盈利，有继续空卖下周的CALL。没有操作黄金。我认为近期市场还是区间震荡，多，空仓位较为平衡。
2011年12月1日星期四
2011年11月30日星期三
今日交易
昨天晚上期货市场中的股市指数大降，有空头高兴地宣称“熊在吃公牛自助”。原因是大家发现过去两天的牛市实际上并没有什么的有力的支持，世界经济面临的问题并没有解决。
30日中国股市大降。不过在中国股市收市后，中国央行宣布降低商业银行储备金率半个点，这一举动出乎市场预料，比大家预期的要早一些。其它各央行也联合起来增加美元的流动性。
各央行的举措激发了牛市。主要指数DOW 涨4.24%, SP500 涨4.33%, NASDAQ 涨4.17%。黄金涨1.95%。DOW是在2009年3月23日后涨幅最大的，DOW收在12000上。值得注意的是在最后一小时内，各指数上涨超过1%。同前天大牛市一样。
经过三天牛市,把七天熊市下跌的都涨回来了。通常是跌快涨慢。现在的问题不是缺乏流动性，也不是缺乏资金，而是没有人愿意把钱借给欧洲。总之问题还在那里。要解决问题更需要一个大大的熊市。
交易方面，建立了$FMCN的空头头寸，还是没有掌握好价格，收市前平仓了，有微利。$FMCN这几天都有大买家在一个短暂的时间内将价格买上去，然后跳水。空卖了本周的$SPY COVERED CALL。计划在进入熊市时建立空头头寸。12月一般不是做空的好季节。
30日中国股市大降。不过在中国股市收市后，中国央行宣布降低商业银行储备金率半个点，这一举动出乎市场预料，比大家预期的要早一些。其它各央行也联合起来增加美元的流动性。
各央行的举措激发了牛市。主要指数DOW 涨4.24%, SP500 涨4.33%, NASDAQ 涨4.17%。黄金涨1.95%。DOW是在2009年3月23日后涨幅最大的，DOW收在12000上。值得注意的是在最后一小时内，各指数上涨超过1%。同前天大牛市一样。
经过三天牛市,把七天熊市下跌的都涨回来了。通常是跌快涨慢。现在的问题不是缺乏流动性，也不是缺乏资金，而是没有人愿意把钱借给欧洲。总之问题还在那里。要解决问题更需要一个大大的熊市。
交易方面，建立了$FMCN的空头头寸，还是没有掌握好价格，收市前平仓了，有微利。$FMCN这几天都有大买家在一个短暂的时间内将价格买上去，然后跳水。空卖了本周的$SPY COVERED CALL。计划在进入熊市时建立空头头寸。12月一般不是做空的好季节。
2011年11月29日星期二
2011年11月28日星期一
2011年11月27日星期日
聪明的投机者基础知识
本人业余炒股多年。总结一点基础知识供入门者参考。
巴菲特的导师本杰明.格雷厄姆教授所著的<<聪明的投资者>>和<<证券分析>>是价值投资的开山之作。本人认真阅读过这两本书，发现自己的投资实践实际是投机。因此用心学习各种投机技巧，做一个格雷厄姆教授所说的有别于“聪明的投资者”的“聪明的投机者”。这里的投机没有任何贬意。
一个金融投机者的成长过程。
（1）银行存款，购买债券（投资行为）。
（2）购买共同基金（投资行为）。
（3）买卖股票（投资或投机行为）。
（4）期权交易（投机行为）。
（5）期货交易（投机行为）。
股票 - 代表有限责任公司资产若干份中的一份。通常炒股就是通过交易所买卖在那里挂牌公司的股票。投资股票的目的在于：获得股票价格上升带来的资产升值；获得股息收入。
股票期权 - 一种金融衍生物，是付出价钱后得到一个权力。股票期权代表的是在一定时间内，以确定的价格买入或卖出某只股票的权力。期权拥有者可以选择行使或者不行使此权利。其本身价格由所基于的股票及其它一些因素决定。有两个种类：看涨期权（Call），代表有买入股票的权力；看跌期权（Put），代表有卖出股票的权力。
期货合同 - 一种金融衍生物。是在未来一定时间以一定价格购买某种物资的协议。
当日交易（Day-trade）
（Swing-trade）
（Position-trade）
（Long term）
在加拿大，资产收入是投资交易净盈利的50%。如果有一年为净亏损，亏损数额50%可以用在未来冲销投资收入。盈利/亏损以当年实际完成的交易计算。我采用“先进先出”的方法计算损益。“后进先出”也应该可以。最好问一下专业人员。
在一个时间点上，市场上交易人员可以分成三队：牛队，熊队，旁观者队。
巴菲特的导师本杰明.格雷厄姆教授所著的<<聪明的投资者>>和<<证券分析>>是价值投资的开山之作。本人认真阅读过这两本书，发现自己的投资实践实际是投机。因此用心学习各种投机技巧，做一个格雷厄姆教授所说的有别于“聪明的投资者”的“聪明的投机者”。这里的投机没有任何贬意。
一个金融投机者的成长过程。
（1）银行存款，购买债券（投资行为）。
（2）购买共同基金（投资行为）。
（3）买卖股票（投资或投机行为）。
（4）期权交易（投机行为）。
（5）期货交易（投机行为）。
股票 - 代表有限责任公司资产若干份中的一份。通常炒股就是通过交易所买卖在那里挂牌公司的股票。投资股票的目的在于：获得股票价格上升带来的资产升值；获得股息收入。
股票期权 - 一种金融衍生物，是付出价钱后得到一个权力。股票期权代表的是在一定时间内，以确定的价格买入或卖出某只股票的权力。期权拥有者可以选择行使或者不行使此权利。其本身价格由所基于的股票及其它一些因素决定。有两个种类：看涨期权（Call），代表有买入股票的权力；看跌期权（Put），代表有卖出股票的权力。
期货合同 - 一种金融衍生物。是在未来一定时间以一定价格购买某种物资的协议。
当日交易（Day-trade）
（Swing-trade）
（Position-trade）
（Long term）
在加拿大，资产收入是投资交易净盈利的50%。如果有一年为净亏损，亏损数额50%可以用在未来冲销投资收入。盈利/亏损以当年实际完成的交易计算。我采用“先进先出”的方法计算损益。“后进先出”也应该可以。最好问一下专业人员。
在一个时间点上，市场上交易人员可以分成三队：牛队，熊队，旁观者队。
2011年11月26日星期六
2011年11月25日星期五
2011年11月24日星期四
ZT: 美国地产投资注意事项
美国房贷次级债危机到现在已经四年了，美国居民住房市场还处于萧条阶段，银行手中还有大量的抵债房出售。有许多地产商低价甩卖各类物业，有的要价甚至低于房屋的建造价格。有个笑话说一个人用一个月的工资买了两处地产。投资美国地产需要可靠，富有经验的当地地产经纪。自己还要做好调查研究工作。
有些购买地产经验的人都知道购买不动产最重要的是地段(Location)。地段在中国的含义主要集中在以下几点：
（1）城市 - 北京，上海，深圳在总体上升值快，涨幅大；交易量大，买卖迅速
（2）学区 - 省/市重点学校周围的房价比其它地段同类型的要高出三五成
（3）交通 - 地铁，高速
（4）生活配套设施
（5）周边地区
在美国考察地段的好坏同样离不开上述各点。但最重要的一点是居民的人员组成，这对于中国投资者来说有些陌生，也有些不好理解。
中国人的素质高，重视教育。即使父母工作不好，或者没有工作，他们也会让子女受教育，有机会发展更好。这样在中国就不会普遍存在一些美国式破落小区（run-down neighborhood）。
美国的住宅小区生命周期比中国的要长许多，城市中住宅小区许多有几十年，上百年的历史。在美国一个小区中如果出现了一定数量的无业或低收入人员，其中一些人酗酒，吸毒，不重视子女的教育，从而导致他们的下一代很多会更加差劲。用不到几年， 此地就会成为一个破落小区，成为犯罪分子的地盘。
美国城市建设受以下两点影响：
（1）土地房屋是个人的财产，所以很难象中国那样铲平一片重新建设。
（2）城市间交通发达，可开发空地很多。
这带来的一个结果是一个小区在走下坡路后几乎没有可能回头向好的方向发展。因为重新建设一个新的小区更容易。
美国许多地区是警察都不愿进入的地方。如一个电视剧所说的“在我们这个地区，一个学生晚回家十五分钟就很可能意味着被杀死了”。这样的地区就像被虫子啃的千疮百孔的苹果，一眼就可以发现问题，正常人是不会购买那里的房屋的。
投资者需要注意的是发现那些即将走向没落的小区，如同内部藏着虫子的苹果，不要被便宜的价钱所诱惑。如果发现有状态很好的房子价格特别便宜，就一定要先警觉起来。详细询问本地的地产经纪是投资成功的关键。地产经纪的工作就是帮助客户买到合适的，有价值的物业。
投资者需要注意的是发现那些即将走向没落的小区，如同内部藏着虫子的苹果，不要被便宜的价钱所诱惑。如果发现有状态很好的房子价格特别便宜，就一定要先警觉起来。详细询问本地的地产经纪是投资成功的关键。地产经纪的工作就是帮助客户买到合适的，有价值的物业。
这里有一个要检查的主要事项的清单：
（1）房屋所在小区的人员基本状况：族裔，宗教，受教育程度，工作及收入。一定不可以购买处于破落地区的房屋。这种地区特点是无业，低收入人员多，犯罪率高。购买这里的房子一定要赔钱的。
（2）小区发展：好的小区会不断有业主对房屋进行升级改造；走下坡路的小区会有一些缺乏维护的房屋。
（2）小区发展：好的小区会不断有业主对房屋进行升级改造；走下坡路的小区会有一些缺乏维护的房屋。
（3）学区：这点对中国人尤为重要。即使没有学龄子女的家庭也不要忽视这点，因为房子总是要卖的。
（4）土地产权：在美国业主是永久拥有土地所有权的。但有少数房屋是建造在租赁的土地上的。这种房屋要便宜一些。但若干年后要有土地租金的问题。
（5）房产税：美国各州税率不一，通常非居民的税率要高很多。例如五十万美元的房子，美国居民每年交五千元的地税(1%)，外国投资者要交一万元。
（6）管理问题：涉及管理费用，房屋保养维修，收取租金等问题。找到一家可靠的物业管理公司不太容易。
（7）投资回报分析：国外投资不会有暴利的，一定要做好计算。
（6）管理问题：涉及管理费用，房屋保养维修，收取租金等问题。找到一家可靠的物业管理公司不太容易。
（7）投资回报分析：国外投资不会有暴利的，一定要做好计算。
附录
投资回报分析
外国投资者在购买美国拍卖房时很多需要用现金购买。无法使用杠杆会使回报率降低。这里给一个估算结果。购买一套80平的佛罗里达的共管度假公寓，价格是7万美元（原价的30%）。每年出租净收益率约为9%。设为5年后房屋价格10.5万美元，5年总收益约为100%。
没收房屋卫星图
图中显示的地区大约五座房屋中有一座被银行没收。
奥克维尔地产原创 - http://blog.sina.com.cn/oakvillerealestate
2011年11月23日星期三
今日市场
近来最不缺的就是坏消息。德国国债销售不好，竞拍的不多。中国十一月的PMI是近三年最低的，其实这不是什么坏事，体现了中国政府防止经济过热的调控起了一定作用。美国的消费者信心指数是六月来最好的，美国人还真是乐观。不过很快会被国会打击了。
美国市场全天熊市，最后五分钟又来了个跳水。各指数下降都超过2%。由于临近节日，交易量很小。黄金下跌0.2%。看了篇文章的标题说金价下跌是因为资金短缺。现在投资者都抛售股票，不买债券了，总得买点什么吧。另外，欧美也许正在悄悄印钞票呢。
市场已经连续下降六天了，八月时的纪录是连降八天。总纪录是九天。不过这次降幅不如八月。
今天有不少机会，没有时间做。能全时操作会好很多。如Livermore所说 -
Speculation is a hard and trying business, and a speculator must be on the job all the time or he'll soon have no job to be on.
美国市场全天熊市，最后五分钟又来了个跳水。各指数下降都超过2%。由于临近节日，交易量很小。黄金下跌0.2%。看了篇文章的标题说金价下跌是因为资金短缺。现在投资者都抛售股票，不买债券了，总得买点什么吧。另外，欧美也许正在悄悄印钞票呢。
市场已经连续下降六天了，八月时的纪录是连降八天。总纪录是九天。不过这次降幅不如八月。
今天有不少机会，没有时间做。能全时操作会好很多。如Livermore所说 -
Speculation is a hard and trying business, and a speculator must be on the job all the time or he'll soon have no job to be on.
2011年11月22日星期二
今日交易
今天的交易量不大，价格波动也不大。各主要指数略降。黄金价格上涨超过1%。
按今天的收市价，$SPY的股息收益率都超过2%了。
今天Focus Media ($FMCN)逐条反驳了Muddy Waters的指控。后来有人发现Muddy Waters的网站被黑了，不知道是不是Focus Media派人干的。Muddy Waters还真够敬业的，网站歇菜了还不忘提醒大家卖$FMCN。笑坏我了。
我更相信Muddy Waters一些。例如提到的Good Will，有的公司市值30亿美元，其中有10亿美元是Good Will；有的公司资产80%是Good Will。最后都得记成亏损。$FMCN在上有问题毫不奇观，这种公司一贯不计代价收购公司来增加营业额。 增加的Good Will可能是营业额的几百倍。
Muddy Waters以往的战绩不错：$CCME， $RINO， $SNOFF都被它干掉了。
没有加减仓位。Day-trade了一次$FMCN，在价格稳定后读2分钟K-D线进行交易。
按今天的收市价，$SPY的股息收益率都超过2%了。
今天Focus Media ($FMCN)逐条反驳了Muddy Waters的指控。后来有人发现Muddy Waters的网站被黑了，不知道是不是Focus Media派人干的。Muddy Waters还真够敬业的，网站歇菜了还不忘提醒大家卖$FMCN。笑坏我了。
我更相信Muddy Waters一些。例如提到的Good Will，有的公司市值30亿美元，其中有10亿美元是Good Will；有的公司资产80%是Good Will。最后都得记成亏损。$FMCN在上有问题毫不奇观，这种公司一贯不计代价收购公司来增加营业额。 增加的Good Will可能是营业额的几百倍。
Muddy Waters以往的战绩不错：$CCME， $RINO， $SNOFF都被它干掉了。
没有加减仓位。Day-trade了一次$FMCN，在价格稳定后读2分钟K-D线进行交易。
2011年11月21日星期一
关于交易策略的计划执行
许多技术分析人员引以为荣是一切以图表，指标为基础，如同看占卜般预测各种价格，而不关心价格发展的推动力量。
在以前信息不发达及内幕交易盛行的时候，经常会出现某只股票，某个行业，或者市场没有缘由的大涨或者大跌。如Livermore所叙述的 -
The tape does not concern itslef with the why and wherefore. It doesn't go into explanations. I didn't ask the tape why when I was fourteen, and I don't ask to-day, at forty. The reason for what a certain stock does today may not be known for two or three days, or weeks, or months. But what the dickens does that matter? Your business with the tape is now - not to-morrow. The reason can wait.
例如某只股票大降是因为要公布取消股息，内部人员提前抛售。
现在情况有所不同了，法律法规更加严格了，信息流通更加迅速。许多能够推动市场的事件普通交易人员在第一时间就可以知晓。例如利用Twitter，大家不仅可以马上知道发生了什么，并且可以知道市场是如何消化信息的。
如何预测已知重大事件的结果及影响（如联储执行QE2，美国信誉降级），如何在突发事件时（如日本地震，利比亚内战）第一时间做出正确反映，和如何合理建立仓位，是现在交易人员最应该掌握的。市场需要一段时间来将一个重要事件彻底体现在股价上。但必须在正确时机果断出手，这样才会有足够的利润来保持正确的仓位。如Livermore所叙述的 -
stocks are never too high to buy or too low to sell
今天Muddy Waters出报告揭露$FMCN的问题。$FMCN收市时降40%，最低时降幅超过60%。Muddy Water的知情人士可以在发表报告前建立仓位，在当天他们可以比其他交易人员多30%的利润。随着股价的降低，空头利润的增长，这一数字可以降为10%。
我大致跟踪过一些成功交易人员的技术分析图及预测，成功率基本是一半。他们的成功实际上是基于他们的交易策略。
在以前信息不发达及内幕交易盛行的时候，经常会出现某只股票，某个行业，或者市场没有缘由的大涨或者大跌。如Livermore所叙述的 -
The tape does not concern itslef with the why and wherefore. It doesn't go into explanations. I didn't ask the tape why when I was fourteen, and I don't ask to-day, at forty. The reason for what a certain stock does today may not be known for two or three days, or weeks, or months. But what the dickens does that matter? Your business with the tape is now - not to-morrow. The reason can wait.
例如某只股票大降是因为要公布取消股息，内部人员提前抛售。
现在情况有所不同了，法律法规更加严格了，信息流通更加迅速。许多能够推动市场的事件普通交易人员在第一时间就可以知晓。例如利用Twitter，大家不仅可以马上知道发生了什么，并且可以知道市场是如何消化信息的。
如何预测已知重大事件的结果及影响（如联储执行QE2，美国信誉降级），如何在突发事件时（如日本地震，利比亚内战）第一时间做出正确反映，和如何合理建立仓位，是现在交易人员最应该掌握的。市场需要一段时间来将一个重要事件彻底体现在股价上。但必须在正确时机果断出手，这样才会有足够的利润来保持正确的仓位。如Livermore所叙述的 -
stocks are never too high to buy or too low to sell
今天Muddy Waters出报告揭露$FMCN的问题。$FMCN收市时降40%，最低时降幅超过60%。Muddy Water的知情人士可以在发表报告前建立仓位，在当天他们可以比其他交易人员多30%的利润。随着股价的降低，空头利润的增长，这一数字可以降为10%。
我大致跟踪过一些成功交易人员的技术分析图及预测，成功率基本是一半。他们的成功实际上是基于他们的交易策略。
2011年11月20日星期日
2011年11月19日星期六
2011年11月18日星期五
2011年11月17日星期四
今日市场
今天空头牢牢控制市场，各指数跌幅不一，都超过1%。在收市前15分钟强力反弹了一下，不然都要下跌2%以上。黄金下跌超过2.5%，大宗商品下跌。欧洲债务问题进一步显现，市场从担忧变成恐慌了。另外美国削减赤字的协商又开始了。黄金比股票还要疲软，有些不理解。拿着纸币就安全了？
债务问题在近半个世纪不停地出现，每次都造成了恐慌和一定的损失，但问题都没有失控。这次也不会例外。现在各国的领导人比起前任们来在决策能力，领导能力上更差些。欧洲银行拿出两万亿欧元救助，先解决眼前问题，然后再进行整顿。这样各国经济可以继续发展。
"We are all waiting for the catalyst to a better or worse market - to us this means that the markets are now waiting for the ECB to step in."
有示威者在华尔街和警察发生冲突，有许多警察殴打示威者的画面。如果这种场面出现在长安街，又会招来各国的谴责。其实有许多示威者是职业捣乱人员，哪里有什么事件他们就在那里示威。社会都在进步。当年杜鲁门还不是美国总统时曾率领军队试图驱散要求领取养老金的一战老兵，杀死打伤多人。
$AAPL近来表现不好。有趣的是几个注定要沉没的公司$GRPN，$LNKD暴涨。$CRM全天降约10%（算上市后交易）。
多头头寸损失，空头价值上涨。牛市告一段落。在适当时候买入一些REIT的期权，两个月内可以有100%的收益。
债务问题在近半个世纪不停地出现，每次都造成了恐慌和一定的损失，但问题都没有失控。这次也不会例外。现在各国的领导人比起前任们来在决策能力，领导能力上更差些。欧洲银行拿出两万亿欧元救助，先解决眼前问题，然后再进行整顿。这样各国经济可以继续发展。
"We are all waiting for the catalyst to a better or worse market - to us this means that the markets are now waiting for the ECB to step in."
有示威者在华尔街和警察发生冲突，有许多警察殴打示威者的画面。如果这种场面出现在长安街，又会招来各国的谴责。其实有许多示威者是职业捣乱人员，哪里有什么事件他们就在那里示威。社会都在进步。当年杜鲁门还不是美国总统时曾率领军队试图驱散要求领取养老金的一战老兵，杀死打伤多人。
$AAPL近来表现不好。有趣的是几个注定要沉没的公司$GRPN，$LNKD暴涨。$CRM全天降约10%（算上市后交易）。
多头头寸损失，空头价值上涨。牛市告一段落。在适当时候买入一些REIT的期权，两个月内可以有100%的收益。
2011年11月16日星期三
今日股市
这段时间周三是熊市时间。市场低开，然后高走，超过了昨天收市的价格。当大家以为又是一个近来典型的牛市反转的时候，Fitch发布了欧洲债务将会对美国银行带来巨大风险的言论。空头借此机会在两个小时内将市场打下近2%。黄金略降。原油超过了百元。
本周多头比较疲软，失去了控制权。经历了七周的牛市，市场到了十字路口。近来美国的各项经济指标都还有所改善。
手中的多头头寸损失，不过空卖的COVERED CALL的盈利弥补了损失。$MMM的PUT还有较大的损失。忽略了$MMM即将要发股息的事。应该在上周盈利时获利退出空头，转为多头。
忽略了原油。原油由于美国经济的好转及伊朗紧张形势的影响，本月上涨约12%。
本周多头比较疲软，失去了控制权。经历了七周的牛市，市场到了十字路口。近来美国的各项经济指标都还有所改善。
手中的多头头寸损失，不过空卖的COVERED CALL的盈利弥补了损失。$MMM的PUT还有较大的损失。忽略了$MMM即将要发股息的事。应该在上周盈利时获利退出空头，转为多头。
忽略了原油。原油由于美国经济的好转及伊朗紧张形势的影响，本月上涨约12%。
Gold
2011-11-16, Teeka Tiwari
The dark horse in all of this continues to be gold.
But I'll make it really simple: If gold sells off on a spike up in the dollar and we see a pull-back into the $1,600's, I think it’s a buying opportunity.
2011-12-23, Peter Brandt
Gold could be heading to substantial new all-time highs.
I could be long next week — another idea precious metal bulls cannot quite grasp.
2012-02-01, Teeka Tiwari
Back on December 14th 2011 I recommended buying physical gold in three blocks if we saw a pull back to $1550, $1,500 and $1,480 respectively. We got as low as $1,523, which would have allowed a partial position to be put on.
I followed up that article with another suggesting that you might want to take profits at $1,675 to $1,700. So far it looks like I was a little conservative, considering that gold is now at $1,750!
In my opinion, all of this is already in the market, and physical gold now looks like it will cap out over the short term at about $1,765 and then experience a pullback to the $1,685 - $1,700 level. Down at that level, I think you can look to be a buyer again.
The dark horse in all of this continues to be gold.
But I'll make it really simple: If gold sells off on a spike up in the dollar and we see a pull-back into the $1,600's, I think it’s a buying opportunity.
2011-12-23, Peter Brandt
Gold could be heading to substantial new all-time highs.
I could be long next week — another idea precious metal bulls cannot quite grasp.
2012-02-01, Teeka Tiwari
Back on December 14th 2011 I recommended buying physical gold in three blocks if we saw a pull back to $1550, $1,500 and $1,480 respectively. We got as low as $1,523, which would have allowed a partial position to be put on.
I followed up that article with another suggesting that you might want to take profits at $1,675 to $1,700. So far it looks like I was a little conservative, considering that gold is now at $1,750!
In my opinion, all of this is already in the market, and physical gold now looks like it will cap out over the short term at about $1,765 and then experience a pullback to the $1,685 - $1,700 level. Down at that level, I think you can look to be a buyer again.
2011年11月15日星期二
今日市场
今年十一月份的气温比平均高好多度，白天有十四五度。上周五飘了些雪花，但地上一点没有积雪。预报说后天要有降雪。在路边的田地里有大群的大雁吃东西。大雁冬天要飞往南方。天鹅是留下来过冬的。附近的湖里有几对白天鹅。
欧洲债务风波又加入了西班牙。意大利国债利率又高于7%了。上周是在各央行的干预下把利率强行压了下去。但市场还是有忧虑。
"Only way out I see is ECB monetization. Risk inflation to prevent default. Who needs 2% inflation in a failed Euro zone?"
这是显而易见的两难选择。如果欧盟选择马上放弃欧元，推到重来，那是壮士断腕。如果选择大量印钞票，那是坚持。现在这样不死不活地拖着是最愚蠢的。
市场略微高收，有个熊市到牛市的反转。总体比较平静。自从十月只有一次连续两天低收的。买方力量明显占上风。近来黄金和股票基本同步。
手中的多头头寸表现尚好。空头有一定损失，仍然持有，保持平衡。近来主要盈利在于卖出COVERED CALL，收益率不大，但比较平稳。
欧洲债务风波又加入了西班牙。意大利国债利率又高于7%了。上周是在各央行的干预下把利率强行压了下去。但市场还是有忧虑。
"Only way out I see is ECB monetization. Risk inflation to prevent default. Who needs 2% inflation in a failed Euro zone?"
这是显而易见的两难选择。如果欧盟选择马上放弃欧元，推到重来，那是壮士断腕。如果选择大量印钞票，那是坚持。现在这样不死不活地拖着是最愚蠢的。
市场略微高收，有个熊市到牛市的反转。总体比较平静。自从十月只有一次连续两天低收的。买方力量明显占上风。近来黄金和股票基本同步。
手中的多头头寸表现尚好。空头有一定损失，仍然持有，保持平衡。近来主要盈利在于卖出COVERED CALL，收益率不大，但比较平稳。
2011年11月14日星期一
Silver
All the info are extracted from free, published articles. We use the tracked data to evaluate services.
2011-11-14
Peter Brandt http://peterlbrandt.com/silver-is-set-up-for-a-major-league-hammering/
Silver is set up for a major league hammering - The entire rally has taken the form of a rising wedge, normally a bearish chart pattern. Note how the upper and lower boundaries are converging. This is a sign the market is reaching a point of termination. A symmetrical triangle has been forming since Oct. 28.
2011-11-14
Peter Brandt http://peterlbrandt.com/silver-is-set-up-for-a-major-league-hammering/
Silver is set up for a major league hammering - The entire rally has taken the form of a rising wedge, normally a bearish chart pattern. Note how the upper and lower boundaries are converging. This is a sign the market is reaching a point of termination. A symmetrical triangle has been forming since Oct. 28.
2011年11月13日星期日
2011年11月11日星期五
2011年11月10日星期四
今日交易
市场相对平静，多头空头都休息一下。各指数都高收，其中DOW涨幅最大，近一个点。今天是大降后的一个反弹，没有形成连续下跌，反映了当前牛市的事实。黄金下跌。
On Thursday, Italy raised 5 billion euros, or $6.8 billion, in an auction of one-year securities. The Italian treasury sold the full allotment, but it paid an average rate of 6.09 percent to do so, far above the 3.57 percent it paid for a similar offering on Oct. 3. It was also the most Italy has paid for such debt since September 1997, when the country still used the lira. - NY Times
世界经济没有摆脱困境。问题没有解决，但措施都用尽了。
关闭了$SPY COVERED PUT和$GLD COVERED CALL。股票仓位偏空。黄金这几天比较平静，$GLD仓位合理，继续持有，目标是$185。
On Thursday, Italy raised 5 billion euros, or $6.8 billion, in an auction of one-year securities. The Italian treasury sold the full allotment, but it paid an average rate of 6.09 percent to do so, far above the 3.57 percent it paid for a similar offering on Oct. 3. It was also the most Italy has paid for such debt since September 1997, when the country still used the lira. - NY Times
世界经济没有摆脱困境。问题没有解决，但措施都用尽了。
关闭了$SPY COVERED PUT和$GLD COVERED CALL。股票仓位偏空。黄金这几天比较平静，$GLD仓位合理，继续持有，目标是$185。
2011年11月9日星期三
今日交易
市场对于意大利债务问题的担心终于体现出来了，所有指数大降，SP500降3.65%， DOW降3.2%。 是七周来降幅最大的。意大利十年国债利息超过7%，在这个利率下，意大利将没有可能偿还债务。
引用Twitter上一段话：
"At some point, US markets will NOT care about European news. But for now, we are trading purely on news out of Europe."
暂时认为今天是牛市的一个调整，需要进一步确认。
昨天增加的$MMM PUT SPREAD今天表现很好。手中的$SPY PUT恢复一些价值，卖出了本周的COVERED PUT。昨天关闭$LNKD空头的操作不成功，应该保留。买入SPY股票，保持仓位中性。如果确认短期趋势转为熊市，利用期权大力做空。黄金价格也下降，也许是有谣言意大利要卖黄金还债。不过意大利的黄金已经用作抵押了，不可以随便卖。
市场跳降，没有按计划做空$GOOG，$PCLN。应该做空$JEF。
这几天策略及方向判断正确，但是交易的价格不好。
引用Twitter上一段话：
"At some point, US markets will NOT care about European news. But for now, we are trading purely on news out of Europe."
暂时认为今天是牛市的一个调整，需要进一步确认。
昨天增加的$MMM PUT SPREAD今天表现很好。手中的$SPY PUT恢复一些价值，卖出了本周的COVERED PUT。昨天关闭$LNKD空头的操作不成功，应该保留。买入SPY股票，保持仓位中性。如果确认短期趋势转为熊市，利用期权大力做空。黄金价格也下降，也许是有谣言意大利要卖黄金还债。不过意大利的黄金已经用作抵押了，不可以随便卖。
市场跳降，没有按计划做空$GOOG，$PCLN。应该做空$JEF。
这几天策略及方向判断正确，但是交易的价格不好。
2011年11月8日星期二
今日交易
意大利是当前的焦点。国会通过了预算，总理可能会下台。Berlusconi是意大利二战后任期最长的总理。到现在还没有意大利要还不起债的消息。
市场同前两天一样，空头上午在进攻，到下午就被打败。Berlusconi辞职和QE3将要出台的谣言，推动了下午的牛市。相对于前两个交易日，今天多头力量更强。这几天的是典型的CUP-HANDLE图形。各指数接近10月27日的高点。市场牛市气氛进一步增强。
中国的通货膨胀有所下降。
$PCLN的营业数据不错，市场反应积极。$PCLN涨幅超过8.2%，收在$552.85，接近一年高点。
关闭了的$LNKD的PUT SPREAD。由于市场对于$LNKD看空，因此PUT 价格很高。这次不如直接空卖。增加了$MMM的82.5-77.5的PUT SPREAD。上述操作体现了高卖低买的策略。但不如直接低点买入股票。$GLD低收。
明天计划做空 $PCLN或$GOOG。
市场同前两天一样，空头上午在进攻，到下午就被打败。Berlusconi辞职和QE3将要出台的谣言，推动了下午的牛市。相对于前两个交易日，今天多头力量更强。这几天的是典型的CUP-HANDLE图形。各指数接近10月27日的高点。市场牛市气氛进一步增强。
中国的通货膨胀有所下降。
$PCLN的营业数据不错，市场反应积极。$PCLN涨幅超过8.2%，收在$552.85，接近一年高点。
关闭了的$LNKD的PUT SPREAD。由于市场对于$LNKD看空，因此PUT 价格很高。这次不如直接空卖。增加了$MMM的82.5-77.5的PUT SPREAD。上述操作体现了高卖低买的策略。但不如直接低点买入股票。$GLD低收。
明天计划做空 $PCLN或$GOOG。
2011年11月7日星期一
今日交易
今天多头又一次战胜空头，过程和上周五几乎一样，多头逆转空头，不同的是今天各指数都是高收的。由于对意大利的债务问题的担心，上午市场一路走低。在午后传出消息，说欧洲救市计划中包括有外来资金通过基金来购买欧洲债券。这个消息引发了牛市反转。
进入十一月以来，多头出于防守位置，但力量仍然强大，挫败了数次空头的进攻。全球经济没有好转多少，还不断有新问题爆发。因此判断即使继续牛市，在 十一月上半月会有较大的调整。
手中的黄金$GLD表现很好，涨幅为2.4%。在收市前卖出其$176 COVERED CALL，锁定当前利润。$LNKD仍然处于下降趋势，但收市时脱离了当天低点，降2.6%。$LNKD的PUT SPREAD产生少量利润，预计本周股价可以降到$75，那时可以平仓了。计划在收市前卖出本周$SPY的COVERED PUT。但由于牛市反转，没有做成。$TD一天平稳，小涨收市。
进入十一月以来，多头出于防守位置，但力量仍然强大，挫败了数次空头的进攻。全球经济没有好转多少，还不断有新问题爆发。因此判断即使继续牛市，在 十一月上半月会有较大的调整。
手中的黄金$GLD表现很好，涨幅为2.4%。在收市前卖出其$176 COVERED CALL，锁定当前利润。$LNKD仍然处于下降趋势，但收市时脱离了当天低点，降2.6%。$LNKD的PUT SPREAD产生少量利润，预计本周股价可以降到$75，那时可以平仓了。计划在收市前卖出本周$SPY的COVERED PUT。但由于牛市反转，没有做成。$TD一天平稳，小涨收市。
2011年11月6日星期日
房屋装修升值实例分析
最近在寻找有投资潜力的奥克维尔独立房屋时发现一个比较好的投资操作 -
此独立房屋位于奥克维尔的River Oak区，房龄大约为二十年。此独立屋在市场上现要价为649K。在周围小区类似房型中价格中属于非常高的。近一步查询发现此独立屋在4个月转手一次。上次要价是539K，成交价是490K。
此独立屋在这次上市前做了一些装修，主要是一些表面上的美化。一眼看上去感觉房屋比较高档，但许多该升级的地方并没有花大价钱去做，花费大约在50-60K。如果以接近要价成交，除去所有其它费用，此投资者在4个月内投资回报率大约为40-50%。
这里的要点在于：以低于市场价买入状态不佳，但没有主要问题的房屋；投资装修最吸引眼球的地方；严格控制成本。
此独立房屋位于奥克维尔的River Oak区，房龄大约为二十年。此独立屋在市场上现要价为649K。在周围小区类似房型中价格中属于非常高的。近一步查询发现此独立屋在4个月转手一次。上次要价是539K，成交价是490K。
此独立屋在这次上市前做了一些装修，主要是一些表面上的美化。一眼看上去感觉房屋比较高档，但许多该升级的地方并没有花大价钱去做，花费大约在50-60K。如果以接近要价成交，除去所有其它费用，此投资者在4个月内投资回报率大约为40-50%。
这里的要点在于：以低于市场价买入状态不佳，但没有主要问题的房屋；投资装修最吸引眼球的地方；严格控制成本。
2011年11月5日星期六
Reminiscences of a Stock Operator
Livermore - the best speculator ever. This book helps me most in my adventure of trading.
CHAPTER I
There is nothing new in Wall Street. There can't be because speculation is as old as the hills. Whatever happens in the stock market to-day has happened before and will happen again.
The tape does not concern itself with the why and wherefore. It doesn't go into explanations. I didn't ask the tape why when I was fourteen, and I don't ask to-day, at forty. The reason for what a certain stock does today may not be known for two or three days, or weeks, or months. But what the dickens does that matter? Your business with the tape is now - not to-morrow. The reason can wait.
CHAPTER II
What beat me was not having brains enough to stick to my own game - that is, to play the market only when I was satisfied that precedents favored my play.
The desire for constant action irrespective of underlying conditions is responsible for many losses in Wall Street.
A stock operator has to fight a lot of expensive enimies within himself.
CHAPTER III
But there is only one side to the stock market; and it is not the bull side or the bear side, but the right side.
I have been flat broke several times, but my loss has never been a total loss. Otherwise, I wouldn't be here now. I always knew I would have another chance and that I would not make the same mistake a second time. I believed in myself. A man must believe in himself and his judgment if he expects to make a living at this game.
Speculation is a hard and trying business, and a speculator must be on the job all the time or he'll soon have no job to be on.
It never was my thinking that made the big money for me. It always was my sitting. My sitting tight!
The market does not beat them. They beat themselves, because though they have brains they cannot sit tight.
One of the most helpful things that anybody can learn is to give up trying to catch the last eighth or the first. These two are the most expensive eighths in the world.
CHAPTER IV
When a man is right he wants to get all that is coming to him for being right.
CHAPTER V
Chapter 6
Chapter 7
Remember that stocks are never too high for you to begin buying or too low to begin selling. But after the initial transaction, don't make a second unless the first shows you a profit.
Chapter 8
If you begin right you will not see your profitable position seriously menaced; and then you will find no trouble in sitting tight.
CHAPTER IX
Timid people don't like to buy a stock at a new high record. But I had the history of such movements to guide me.
The way to make money is to make it. The way to make big money is to be right at exactly the right time.
The news simply meant that the bull cliques were still fighting desperately against conditions - against common sense and against common honesty, for they knew what was coming and were resorting to such schemes to put up the market in order to unload stocks before the storm struck them.
CHAPTER X
CHAPTER XI
CHAPTER XII
When I make money I make it backing my own opinions.
A man cannot be convinced against his own convictions, but he can be talked into a state of uncertainty and indecision, which is even worse, for that means that he cannot trade with confidence and comfort.
Of all speculative blunders there are few greater than trying to average a losing game.
Always sell what shows you a loss and keep what shows you a profit.
There isn't a man in Wall Street who has not lost money trying to make the market pay for an automobile or a bracelet or a motor boat or a painting.
What does a man do when he sets out to make the stock market pay for a sudden need? Why, he merely hopes. He gambles. He therefore runs much greater risks than he would if he were speculating intelligently, in accordance with opinions or beliefs logically arrived at after a dispassionate study of underlying conditions. To begin with, he is after an immediate profit. He cannot afford to wait.
CHAPTER XIII
CHAPTER I
There is nothing new in Wall Street. There can't be because speculation is as old as the hills. Whatever happens in the stock market to-day has happened before and will happen again.
The tape does not concern itself with the why and wherefore. It doesn't go into explanations. I didn't ask the tape why when I was fourteen, and I don't ask to-day, at forty. The reason for what a certain stock does today may not be known for two or three days, or weeks, or months. But what the dickens does that matter? Your business with the tape is now - not to-morrow. The reason can wait.
CHAPTER II
What beat me was not having brains enough to stick to my own game - that is, to play the market only when I was satisfied that precedents favored my play.
The desire for constant action irrespective of underlying conditions is responsible for many losses in Wall Street.
A stock operator has to fight a lot of expensive enimies within himself.
CHAPTER III
But there is only one side to the stock market; and it is not the bull side or the bear side, but the right side.
I have been flat broke several times, but my loss has never been a total loss. Otherwise, I wouldn't be here now. I always knew I would have another chance and that I would not make the same mistake a second time. I believed in myself. A man must believe in himself and his judgment if he expects to make a living at this game.
Speculation is a hard and trying business, and a speculator must be on the job all the time or he'll soon have no job to be on.
It never was my thinking that made the big money for me. It always was my sitting. My sitting tight!
The market does not beat them. They beat themselves, because though they have brains they cannot sit tight.
One of the most helpful things that anybody can learn is to give up trying to catch the last eighth or the first. These two are the most expensive eighths in the world.
CHAPTER IV
When a man is right he wants to get all that is coming to him for being right.
CHAPTER V
Chapter 6
Chapter 7
Remember that stocks are never too high for you to begin buying or too low to begin selling. But after the initial transaction, don't make a second unless the first shows you a profit.
Chapter 8
If you begin right you will not see your profitable position seriously menaced; and then you will find no trouble in sitting tight.
CHAPTER IX
Timid people don't like to buy a stock at a new high record. But I had the history of such movements to guide me.
The way to make money is to make it. The way to make big money is to be right at exactly the right time.
The news simply meant that the bull cliques were still fighting desperately against conditions - against common sense and against common honesty, for they knew what was coming and were resorting to such schemes to put up the market in order to unload stocks before the storm struck them.
CHAPTER X
CHAPTER XI
CHAPTER XII
When I make money I make it backing my own opinions.
A man cannot be convinced against his own convictions, but he can be talked into a state of uncertainty and indecision, which is even worse, for that means that he cannot trade with confidence and comfort.
Of all speculative blunders there are few greater than trying to average a losing game.
Always sell what shows you a loss and keep what shows you a profit.
There isn't a man in Wall Street who has not lost money trying to make the market pay for an automobile or a bracelet or a motor boat or a painting.
What does a man do when he sets out to make the stock market pay for a sudden need? Why, he merely hopes. He gambles. He therefore runs much greater risks than he would if he were speculating intelligently, in accordance with opinions or beliefs logically arrived at after a dispassionate study of underlying conditions. To begin with, he is after an immediate profit. He cannot afford to wait.
CHAPTER XIII
加拿大十月失业率上升
经济还远没有脱离困境。
“联邦统计局公布了今年10月份的就业数据，本国就业市场出现了三年来最大的退步，流失的工作岗位高达5.4万个，而且全部都是全职工作，集中在安省的制造业和建筑业。本国的失业率则上升0.2%至7.3%，完全抵消了最近的降幅，近140万加拿大人处于失业状态。有分析人士指出，随着经济继续放缓，失业率还将逐步上升，明年会升至8%。”
上周以前工作的公司刚裁掉了两名和我共事过的员工。
希望中国能够平稳度过难关。中国老百姓的忍耐能力最强了，如果到了中国人都无法忍耐的时候，全球都得遭殃。
“联邦统计局公布了今年10月份的就业数据，本国就业市场出现了三年来最大的退步，流失的工作岗位高达5.4万个，而且全部都是全职工作，集中在安省的制造业和建筑业。本国的失业率则上升0.2%至7.3%，完全抵消了最近的降幅，近140万加拿大人处于失业状态。有分析人士指出，随着经济继续放缓，失业率还将逐步上升，明年会升至8%。”
上周以前工作的公司刚裁掉了两名和我共事过的员工。
希望中国能够平稳度过难关。中国老百姓的忍耐能力最强了，如果到了中国人都无法忍耐的时候，全球都得遭殃。
2011年11月4日星期五
ZT: 繁荣的奥克维尔(Oakville, Ontario)
奥克维尔市(Oakville, Ontario)在安大略省西南部，属于荷顿区。周围主要的城市有密西沙加市（东），米尔顿市（北），伯灵顿市（西）。奥克维尔市面积是139平方公里，人口约为18万(2011)，人口密度适中（密西沙加大约是奥克维尔的1.5倍）。奥克维尔是加拿大第二低犯罪率的城市（仅次于Caledon，2011）。奥克维尔还多年保持了加拿大家庭收入第一的位置，在最近几年让位于西部的采油城市，名列第二。
奥克维尔自然环境非常好。被评选为2011年气候最佳(Best Weather)城市。奥克维尔拥有安大略湖最美的湖滨，有超过3,200公顷公园用地，超过1,400公里林间小径。Bronte Creek Provincial Park是四季开放的省级公园，一年四季都有合适的户外活动：露营，远足，游泳，钓鱼，雪橇，越野滑雪。Bronte Creek和Sixteen Mile Creek是贯穿奥克维尔两条美丽的溪谷，在河流入湖口是两个港口。秋季可以在这两条河畔观看大马哈鱼(Salmon)洄游的景观。
在住宅区规划上， 奥克维尔注重了对人口密度的控制和对环境的保护。每个小区都保留有部分原始森林。有的小区有上百尺高的橡树，一人多粗的松柏，两人合抱不过来的柳树；有的小区的林地中生活有小群的鹿。
奥克维尔有优秀的基础教育系统。全市有5所公立高中，在2011年的排名中分别为： Oakville Trafalgar 4，Iroquois Ridge 16，Abbey Park 34，Thomas A Blakelock 63，White Oaks 126。其中White Oaks 提供IB（国际大学预科）课程。另外爱普比(Appleby College)是加拿大一流的私人学校，已经有上百年的历史了。
奥克维尔文化体育系统发达。培养出在包括水上运动，冰上运动，田径等项目中的多位夏冬奥运会冠军。大量的俱乐部给大人孩子文体活动提供了许多选择。
奥克维尔的交通非常方便。QEW在奥克维尔有7个进出口。在北面有407高速公路。大多数居民可以在10分钟内开上高速。奥克维尔有两个GO火车站，从那里到达多伦多市中心分别需要35和40分钟。
奥克维尔地产原创 - http://blog.sina.com.cn/u/1956298313
奥克维尔自然环境非常好。被评选为2011年气候最佳(Best Weather)城市。奥克维尔拥有安大略湖最美的湖滨，有超过3,200公顷公园用地，超过1,400公里林间小径。Bronte Creek Provincial Park是四季开放的省级公园，一年四季都有合适的户外活动：露营，远足，游泳，钓鱼，雪橇，越野滑雪。Bronte Creek和Sixteen Mile Creek是贯穿奥克维尔两条美丽的溪谷，在河流入湖口是两个港口。秋季可以在这两条河畔观看大马哈鱼(Salmon)洄游的景观。
 |
| 奥克维尔港 |
 |
| Bronte 港 |
在住宅区规划上， 奥克维尔注重了对人口密度的控制和对环境的保护。每个小区都保留有部分原始森林。有的小区有上百尺高的橡树，一人多粗的松柏，两人合抱不过来的柳树；有的小区的林地中生活有小群的鹿。
奥克维尔有优秀的基础教育系统。全市有5所公立高中，在2011年的排名中分别为： Oakville Trafalgar 4，Iroquois Ridge 16，Abbey Park 34，Thomas A Blakelock 63，White Oaks 126。其中White Oaks 提供IB（国际大学预科）课程。另外爱普比(Appleby College)是加拿大一流的私人学校，已经有上百年的历史了。
 |
| 爱普比私校 |
奥克维尔文化体育系统发达。培养出在包括水上运动，冰上运动，田径等项目中的多位夏冬奥运会冠军。大量的俱乐部给大人孩子文体活动提供了许多选择。
 |
| 划艇 |
奥克维尔地产原创 - http://blog.sina.com.cn/u/1956298313
2011年11月3日星期四
今日交易
今天希腊决定取消全民公决，而总理可能会被迫辞职。就是一场闹剧，抢了美国人的风头。近来谈论美国债务的明显少了。一年前没人会预料小小的希腊竟然能影响整个世界。美国的就业数据还可以，其它有好有坏。欧洲把利率降低到了1.25%(降0.25%)。
股市指数上涨近2%，继续了牛市。不过没有回到上周调整前的水平。
今天调整了一下仓位，增加了多头。现在市场每天波动很大，是进行Day-trade的好机会。中午时买入$GLD股，卖出其COVERED CALL。买入加币$TD股。平掉了$AMZN的空头头寸，交易以亏损结束；主要问题是在买回的过程中不够果断。建立了$LNKD 87.5-75 的 PUT SPREAD，预计上季度营业数据不好。个人认为$LNKD将在2-3年内变成十元股。
明天$GPRN上市，又来了个不赚钱的。
股市指数上涨近2%，继续了牛市。不过没有回到上周调整前的水平。
今天调整了一下仓位，增加了多头。现在市场每天波动很大，是进行Day-trade的好机会。中午时买入$GLD股，卖出其COVERED CALL。买入加币$TD股。平掉了$AMZN的空头头寸，交易以亏损结束；主要问题是在买回的过程中不够果断。建立了$LNKD 87.5-75 的 PUT SPREAD，预计上季度营业数据不好。个人认为$LNKD将在2-3年内变成十元股。
明天$GPRN上市，又来了个不赚钱的。
2011年11月2日星期三
2011年11月1日星期二
今日交易
十一月的第一天以大跌收市。希腊要对欧洲救援方案进行全民公决。这引起了市场的恐慌，美国指数开市后降幅超过2%。下午传来谣言，希腊要取消公决，市场直线上涨。收市前确认要举行全民公决，市场又降到当天低点附近。
今天的市场对希腊的公决反应过度，完全是由于恐慌引起了抛售，或者是股市在借机进行调整。虽然希腊人一直在抗议政府为得到救援而采取的紧缩政策，但如果政府关门了，银行倒闭了，大家日子会更糟。所以没有人认为希腊人民会否决欧洲救援方案。
今天最好的策略是高卖低买。调整了一下$AMZN空头仓位。增加了$MMM的股票多头，并且卖出了其COVERED CALL。增加了11月的$SPY PUT 。整体仓位比较均衡。我们认为$AMZN要比$MMM弱一些。但到现在证明是错的。感觉近期市场还是牛市，对于空投头寸不甚放心。明天可以卖出一些本周$SPY PUT，这样可以降低持有成本。
今天的市场对希腊的公决反应过度，完全是由于恐慌引起了抛售，或者是股市在借机进行调整。虽然希腊人一直在抗议政府为得到救援而采取的紧缩政策，但如果政府关门了，银行倒闭了，大家日子会更糟。所以没有人认为希腊人民会否决欧洲救援方案。
今天最好的策略是高卖低买。调整了一下$AMZN空头仓位。增加了$MMM的股票多头，并且卖出了其COVERED CALL。增加了11月的$SPY PUT 。整体仓位比较均衡。我们认为$AMZN要比$MMM弱一些。但到现在证明是错的。感觉近期市场还是牛市，对于空投头寸不甚放心。明天可以卖出一些本周$SPY PUT，这样可以降低持有成本。
2011年10月31日星期一
今日交易
DOW指数今天降2.3%，10月上涨9.5%。今天的下降可以看作是一个回调。欧洲债务问题的“解决”是推动10月牛市的主要力量。今天市场不出意外地发现好像问题没有彻底解决。MF Global Holdings Inc.宣布破产是今天的一个主要话题。此前我们对MF没有什么印象（The Wall Street firm run by former Goldman Sachs Chairman and New Jersey Gov. Jon Corzine filed for bankruptcy Monday morning, making it the first big American casualty of the European debt crisis.）。
市后中国的PMI指数低于预期（50.4 vs 51.6），是32个月来最低点。不知道明天对美国股市的影响会有多大。明天美联储的会议也许会推动市场。
今天唯一的交易是空卖$MMM。 想同样做空$F，但没有实施。现在还是牛市，至少短期看。等到市场转为熊市时，再加大做空力度。
市后中国的PMI指数低于预期（50.4 vs 51.6），是32个月来最低点。不知道明天对美国股市的影响会有多大。明天美联储的会议也许会推动市场。
今天唯一的交易是空卖$MMM。 想同样做空$F，但没有实施。现在还是牛市，至少短期看。等到市场转为熊市时，再加大做空力度。
ZT: 奥克维尔(Oakville)公寓投资回报分析
我帮助客户在2011年6月购买了位于奥克维尔Central Park Drive的一个不到两年新的公寓单元。此单元为1+1室，位于10层，面积是610平方尺，另有113平方尺的大面积阳台，有两个停车位。阳台面向西南，可以居高远望南面的安大略湖和西面的尼亚加拉山岭。周围有超过万尺的公园绿地。
客户购买此单元作为投资用途。由于前业主急于脱手，最后成交价为$247,000，所有手续费为$3,445。同时期开发商出售的同样户型新房价格是$291,400。
客户很快把单元出租出去，在收房后第四天就开始收租金了。每月租金为$1,500（类似户型租金在$1,450-$1,600之间）。 管理费是$386.02/月， 地税$1,925/年。
在20%首付，30年房贷，5年浮动2.1%（P-0.9）利率情况下(每两周还款为$339.31)，在不考虑维修的情况下， 每个月的正现金流为：
$1,500 - $339.31x26/12 - $386.02 - $1,925/12 = $218.39 (笔者认识到利率不会长期保持在这个位置，但是只要利率不高于４％，该投资都可以保证正现金流。本计算分析假设该积累的正现金流都用做房屋的维修维护费用）。
在所还贷款中，第一年还本金额为$4,749.83, 还息为$4,078.12。以后各年还本金额逐渐增加，还息减少。到第五年还本$5,165.67, 还息$3,668.28。
奥克维尔这些年地产一直保持稳定的增长，市场供求比较平衡，未来市场应该保持这个势头。
以较为保守的每年2％的物业升值为假设，第一年的收益率为：(247,000x2%+4,749.83)/50,000 = 19.38%。第五年的收益为：(247,000x2%+5,165.67)/50,000 = 20.2%。
另外，在距离公寓4公里左右的地方正在建设新的奥克维尔医院，2015年投入运行。新医院将雇佣4,000名员工，可以预计对周围住房的需求量将大大增加。
综上所述，在奥克维尔投资CONDO共管公寓，不管是从现金流来说，还是从整体投资回报来说，都是不错的选择。
2011年10月30日星期日
2011年10月29日星期六
Day-trade 技术总结
在有明确市场利好事件发生时，应该在第一时间建立多头仓位，因为市场很有可能在高开后还会向上有很大的上涨。当天就可以几个点的利润。例如10月10日，10月27日的牛市。
对于利空事件， 建立尽快空头仓位。
在交易量不活跃的日子，市场通常朝一个方向发展，很少反转。坚持一个方向交易。如圣诞节前后的交易日。
3倍指数的$FAS/$FAZ，$TNA/$TZA非常适合Day-trade。但不适合长期持有。
对于利空事件， 建立尽快空头仓位。
在交易量不活跃的日子，市场通常朝一个方向发展，很少反转。坚持一个方向交易。如圣诞节前后的交易日。
3倍指数的$FAS/$FAZ，$TNA/$TZA非常适合Day-trade。但不适合长期持有。
2011年10月27日星期四
2011年10月26日星期三
2011年10月25日星期二
2011年10月24日星期一
ZT: 适宜居住的伯灵顿(Burlington, Ontario)
伯灵顿市（Burlington）在安大略省西南部，属于荷顿区。周围主要的城市有奥克维尔市（东），米尔顿市（北），汉米尔顿市（西南）。人口为16.5万（2010）。伯灵顿在加拿大最适宜居住城市的评选中多次位居前列：2008年第八，2009年第四，2010年第三，2011年第三。其原因有以下几点：较高的家庭收入，低犯罪率，适中的生活费用，适宜的气温，良好的基础设施。
伯灵顿市的交通很方便，在不大的面积内（相对于多伦多，密西沙加）有QEW和407两条高速路。大多数居民可以在9分钟内达到其中一条高速公路。如果到401大约需要20分钟。伯灵顿市内有两个GO火车站，到多伦多市中心需要45分钟时间。
伯灵顿市同其它荷顿区城市一样，拥有在安省领先的教育体系。伯灵顿市有9所高中，其中3所在百名内。另外Robert Bateman High School提供有IB课程。
伯灵顿市的高档住宅区主要有两块，一是南面安大略湖畔的湖滨住宅，另一处是位于尼亚加拉山岭(Niagara Escapement)地区的庄园豪宅。伯灵顿和奥克维尔分享了安大略湖最佳的湖岸线。湖滨住宅的特点是各自有其独特的设计，集精致与大气于一体。屋前屋后及街道两旁的参天古树是非常独特的（位于湖畔的树木要生长的更为粗壮高大），这给了住宅良好的私密空间。
北部庄园住宅依山依林而建，朴实大气。这些住宅分布在尼亚加拉山岭的绿地间，自然环境得天独厚。尼亚加拉山岭地区是安省的自然保护地，很难有新的建设项目被批准。因此这里的自然环境会在很长时间内得以保障。
近年来伯灵顿在不断向北开发。在QEW已北开发了几个面向中产阶级的新区，有Millcroft, Orchard Garden, Alton Village。但由于北部的保护区，可开发空间已经十分有限了。
奥克维尔地产原创 - http://blog.sina.com.cn/s/blog_749abe490100z2sn.html
伯灵顿市的交通很方便，在不大的面积内（相对于多伦多，密西沙加）有QEW和407两条高速路。大多数居民可以在9分钟内达到其中一条高速公路。如果到401大约需要20分钟。伯灵顿市内有两个GO火车站，到多伦多市中心需要45分钟时间。
伯灵顿市同其它荷顿区城市一样，拥有在安省领先的教育体系。伯灵顿市有9所高中，其中3所在百名内。另外Robert Bateman High School提供有IB课程。
伯灵顿市的高档住宅区主要有两块，一是南面安大略湖畔的湖滨住宅，另一处是位于尼亚加拉山岭(Niagara Escapement)地区的庄园豪宅。伯灵顿和奥克维尔分享了安大略湖最佳的湖岸线。湖滨住宅的特点是各自有其独特的设计，集精致与大气于一体。屋前屋后及街道两旁的参天古树是非常独特的（位于湖畔的树木要生长的更为粗壮高大），这给了住宅良好的私密空间。
北部庄园住宅依山依林而建，朴实大气。这些住宅分布在尼亚加拉山岭的绿地间，自然环境得天独厚。尼亚加拉山岭地区是安省的自然保护地，很难有新的建设项目被批准。因此这里的自然环境会在很长时间内得以保障。
奥克维尔地产原创 - http://blog.sina.com.cn/s/blog_749abe490100z2sn.html
2011年10月23日星期日
Kroll on Futures Trading Strategy
Personal discipline, self-sufficiency, and pragmatism are the crucial characteristics of the successful speculator.
2011年10月22日星期六
2011年10月20日星期四
奥克维尔地产 Oakville
奥克维尔地产 Oakville Real Estate
http://www.century21.ca/haidan.wang/Search/haidan.wang
http://blog.sina.com.cn/u/oakvillerealestate
http://www.century21.ca/haidan.wang/Search/haidan.wang
http://blog.sina.com.cn/u/oakvillerealestate
2011年10月19日星期三
2011年10月18日星期二
Technical Analysis of the Financial Markets: A Comprehensive Guide to Trading Methods and Applications
Good textbook on technical analysis. I do not depend charts to decide my move. Instead, I use them to verify my ideas and decisions.
Chapter 1 Philosophy of Technical Analysis
Technical analysis is the study of market action, primarily through the use of charts, for the purpose of forecasting future price trends.
Philosophy or rationale
1. Market action discounts everything.
2. Prices move in trends.
3. History repeats itself.
As a rule, chartists do not concern themselves with the reasons why prices rise or fall. Very often, in the early stages of price trend or at critical turning points, no one seems to know exactly why a market is performing a certain way.
A trend in motion is more likely to continue than to reverse.
The fundamentalist studies the cause of market movement, while the technician studies the effect.
Market price tends to lead the known fundamentals. Stated another way, market price acts as a leading indicator of the fundamentals or the conventional wisdom of the moment. (* This is not correct! There is cause, then there is effect. Someone must know the change with fundamentals and act accordingly, thus move the prices. Otherwise, market is moved blindly.)
Chart reading becomes a shortcut form of fundamental analysis. (* This is not correct! One side statement.)
Because of the high leverage factor in the futures markets, timing is especially crucial in that arena. It is quite possible to be correct on the general trend of the market and still lose money.
One of the great strengths of technical analysis is its adaptability to virtually any trading medium and time dimension.
Technical analysis in stocks relies much more heavily on the use of sentiment indicators and flow of fund analysis.
Technical analysis in the futures markets is a much purer form of price analysis.
Chapter 2 Dow Theory
Charles Dow and his partner Edward Jones founded Dow Jones & Company in 1882.
Dow theory still forms the cornerstone of the study of technical analysis.
Basic tenets of Dow theory
1. The average discount everything.
2. The market has three trends.
3. Major trends have three phases.
4. The averages must confirm each other.
5. Volume must confirm the trend.
6. A trend is assumed to be in effect until it gives definite signals that it has reversed.
Dow relied exclusively on closing prices.
Chapter 3 Chart Construction
The bar chart shows the open, high, low, and closing prices. The tic to the right of the vertical bar is the closing price. The opening price is the tic to the left of the bar.
In the line chart, only the closing price is plotted for each successive day.
Point and figure chart - x column shows rising prices; o column shows falling prices.
Candlestick chart
Weekly and monthly charts compress the price action to allow for much longer range trend analysis.
Chapter 4 Basic Concepts of Trend
The important point to remember here is that the breaking of the third line is the valid trend reversal signal.
It's interesting to note that how often the number three shows up in the study of technical analysis and the important role it plays in so many technical approaches.
In general, most important up trendlines tend to approximate an average slope of 45 degrees.
If a trendline is too steep, it usually indicates that prices are advancing too rapidly and that the current steep ascent will not be sustained.
If a trendline is too flat, it may indicate that the uptrend is too weak and not to be trusted.
As in the case of the basic trendline, the longer the channel remians intact and the more often it is successfully tested, the more important and reliable it becomes.
The failure to reach the upper end of the channel is often an early warning that the lower line will be broken.
As a general rule of thumb, the failure of any move within an established price channel to reach one side of the channel usually indicates that the trend is shifing, and increases the likelihood that the other side of the channel will be broken.
Once a breakout occurs from an existing price channel, prices usually travel a distance equal to the width of the channel.
It should always be kept in mind that of the two lines, the basic trendline is by far the more important and the more reliable.
Usually, a minimum retracement is about 33% and a maximum about 66%. What this means is that, in a correction of a strong trend, the market usually retraces at least a third of the previous move.
The maximum retracement parameter is 66%, which becomes an especially critical area. If the prior trend is to be maintained, the correction must stop at the two-thirds point.
Gann and Fibonacci lines are used in the same way as speedlines. They are supposed to provide support during downward corrections. When one line is broken, pricess will usually fall to the next lower line.
The breakaway gap usually occurs at the completion of an important price pattern, and usually signals the beginning of a significant market move. Ater a market has completed a major basing pattern, the breaking of resistance often occurs on a breakway gap.
Breakaway gaps usually occur on heavy volume.
After the move has been underway for awhile, somewhere around the middle of the move, prices will leap forward to form a second type of gap (or a series of gaps) called the runaway gap (measuring gap). This type of gap reveals a situation where the market is moving offerotlessly on moderate volume.
The Exhaustion Gap. The final type of gap appears near the end of a market move. Near the end of an uptrend, prices leap forward in a last gasp.
The Island Reversal. Sometimes after the upward exhaustion gap has formed, prices will trade in a narrow range for a couple of days or a couple of weeks before gapping to the downside.
Chapter 5 Major Reversal Patterns
Price patterns are pictures or formations, which appear on price charts of stocks or commodities, that can be classifies into different categories, and that have predictive value.
TWO TYPES OF PATTERNS: REVERSAL AND CONTINUATION
1. A prerequisite for any reversal pattern is the existence of a prior trend.
2. The first signal of an impending trend reversal is often the breaking of an important trendline.
3. The larger the pattern, the greater the subsequent move.
4. Topping patterns are usually shorter in duration and more volatile than bottoms.
5. Bottoms usually have smaller price ranges and take longer to build.
6. Volume is usually more important on the upside.
Topping patterns are usually shorter in duration and are more volatile than bottoms.
The completion of each pattern should be accompanied by a noticeable increase in volume.
THE HEAD AND SHOULDERS REVERSAL PATTERN
Most of the other reversal patterns are just variations of the head and shoulders.
The left and right shoulders (A and E) are at about the same height. The head (C) is higher than either shoulder. Notice the higher volume on each peak. The pattern is completed on a close under the neckline (line 2). The minimum objective is the vertical distance from the head to the neckline projected downward from the breaking of the neckline. A return move will often occur back to the neckline, which should not recross the neckline once it has been broken.
THE IMPORTANCE OF VOLUME
As a general rule, the second peak (the head) should take place on lighter volume than the left shoulder.
The most important volume signal takes place during the third peak (the right shoulder). Volume should be noticeably lighter than on the previous two peaks. Volume should then expand on the breaking of the neckline, decline during the return move, and then expand again once the return move is over.
FINDING A PRICE OBJECTIVE
In general, most valid double tops or bottoms should have at least a month between the two peaks or troughs. Some will even be two or three months apart.
The saucer bottom shows a very slow and very gradual turn from down to sideways to up.
Saucer bottoms are usually spotted on weekly or monthly charts that span several years. The longer they last, the more significant they become.
Spikes are the hardest market turns to deal with because the spike (or V pattern) happens very quickly with little or no transition period.
Chaper 6 Continuation Patterns
Continuatoin patterns are usually shorter term in the duration and are more acurately classified as near term or intermediate patterns.
There are three types of triangles - symmetrical, ascending, and descending.
The symmetrical triangle is also called a coil.
The ascending triangle has a rising lower line with a flat or horizontal upper line.
The descending triange has the upper line declining with a flat or horizontal bottom line.
As a general rule, prices should break out in the direction of the prior trend somewhere betwen two-thirds to three-quarters of the horizontal width of the triangle.
The accending triangle is bullish and the descending triangle is bearish. The symmetrical triangle, by contrast, is inherently a neutral pattern.
The triangle is considered an intermediate pattern, meaning that it usually takes longer than a month to form, but generally less than three months.
The expanding pattern, therefore, is usually a bearish formation. It generally appears near the end of a major bull market.
The flag and pennant represent brief pauses in a dynamic market move. In fact, one of the requirements for both the flag and pennant is that they be preceded by a sharp and almost straight line move.
Flags and pennants are among the most reliable of contiuation patterns and only rarely produce a trend reversal.
A bullish pennant resembles a small symmetrical triangle, but usually lasts no longer than three weeks. Volume should be light during its formation.
The wedge formation is similar to a symmetrical triangle both in terms of its shape and the amount of time it talkes to form.
The wedge pattern has a noticeable slant either to the upside or the downside. As a rule, like the flag pattern, the wedge slants against the prevailing tend. Therefore, a falling wedge is considered bullish and a rising wedge is bearish.
The rectangle is sometimes referred to as a trading range or a congestion area.
Chapter 7 Volume and Open Interest
Technicians believe that volume precedes price, meaning that the loss of upside pressure in an uptrend or downside pressure in a downtrend actually shows up in the volume figures before it is manifested in a reversal of the price trend.
On Balance Volume. A running cumulative total is then maintained by adding or subtracting each day's volume based on the direction of the market close.
It is the direction of the OBV line (its trend) that is important and not the actual numbers themselves.
It's when the volume line fails to move in the same directoin as prices that a divergence exists and warns of a possible trend reversal.
1. Rising open interest in an uptrend is bullish.
2. Declining open interst in an uptrend is bearish.
3. Rising open interest in a downtrend is bearish.
4. Declining open interest in a downtrend is bullish.
1. Toward the end of major market moves, where open interest has been increasing throughout the price trend, a leveling off or decline in open interest is often an early warning of a change in trend.
2. A high open interest figure at market tops can be considered bearish if the price drop is very sudden.
3. If open interest builds up noticeably during a sideways consolidation or a horizontal trading range, the ensuing price move intensifies once the breakout occurs.
4. Increasing open interest at the completion of a price pattern is viewed as added confirmation of a reliable trend signal.
In the case of a blowoff at market tops, prices suddenly begin to rally sharply after a long advance, accompanied by a large jump in trading activity and then peak abruptly. In a selling climax bottom, prices suddenly drop sharply on heavy trading activity and rebound as quickly.
The put/call ratio is usually viewed as a contrary indicator. A very high ratio signals an oversold market. A very low ratio is a negative warning of an overbought market.
Chapter 8 Long Term Charts
Anyone who is not consulting these longer range charts is missing an enormous amount of valuable price information.
The proper order to follow in chart analysis is to begin with the long range and gradually work to the near term.
Chapter 9 Moving Averages
The moving average is a follower, not a leader. It never anticipates; it only reacts.
The longer averages work better as long as the trend remains in force, but a shorter average is better when the trend is in the process of reversing.
The most widely used triple crossover system is the popular 4-9-18-day moving average combination.
A buying alert takes place in a downtrend when the 4 day crosses above both the 9 and the 18. A confirmed buy signal occurs when the 9 day then crosses above the 18.
Bollinger Bands are placed two standard deviations above and below the moving average, which is usually 20 days.
The simplest way to use Bollinger Bands is to use the upper and lower bands as price targets.
Bollinger Bands expand and contract based on the last 20 days' volatility.
The 4 week rule is used primarily for futures trading.
1. Cover short positions and buy long whenever the price exceeds the highs of the four preceding full calendar weeks.
2. Liquidate long positions and sell short whenever the price falls below the lows of the four preceding full calendar weeks.
Chapter 10 Oscillators and Contrary Opinion
The oscillator is extremely useful in nontrending markets where prices fluctuate in a horizontal price band, or trading range, creating a market situation where most trend-following systems simply don't work that well.
The oscillator is only a secondary indicator in the sense that it must be subordinated to basic trend analysis.
1. The oscillator is most useful when its value reaches an extreme reading near the upper or lower end of its boundaries. The market is said to be overbought when it is near the upper extreme and oversold when it is near the lower extreme. This warns that the price trend is overextended and vulnerable.
2. A divergence between the oscillator and the price action when the oscillator is in an extreme position is usually an important warning.
3. The crossing of the zero (or midpoint) line can give important trading signals in the direction of the price trend.
Market momentum is measured by continually taking price differences for a fixed time interval.
If the prices are rising and the momentum line is above the zero line and rising, this means the uptrend is accelerating.
Buy position should only be taken on crossings above the zero line if the market trend is up.
To measure the rate of change, a ratio is constructed of the most recent closing price to a price a certain number of days in the past.
Plotting the difference between the two averages as a histogram.
These histogram bars appear as a plus or minus value around a centered zero line. This type of oscillator has three uses:
1. To help spot divergences.
2. To help identity short term variations from the long term trend, when the shorter average moves too far above or below the longer average.
3. To pinpoint the crossings of the two moving averages, which occur when the oscillator crosses the zero line.
Commodity Channel Index (CCI) - compares the current price with a moving average over a selected time span; then normalizes the oscillator values by using divisor based on mean deviation.
CCI readings over +100 are considered overbought and under -100 are oversold.
Relative strength (RS) is determined by dividing the up average by the down average.
RSI=100*(up average)/(up average+down average)
RSI movements above 70 are considered overbought, an oversold condition would be a move under 30.
The 80 level becomes the overbought level in bull markets and the 20 level the oversold level in bear market.
A top failure swing occurs when a peak in the RSI (over 70) fails to exceed a previous peak in an uptrend, followed by a downside break of a previous trough.
A bottom failure swing occurs when the RSI is in a downtrend (under 30), fails to set a new low, and then proceeds to exceed a previous peak.
Divergence between the RSI and the price line, when the RSI is above 70 or below 30, is a serious warning that should be heeded.
Any strong trend, either up or down, usually produces an extreme oscillator reading before too long. In such cases, claims that a market is overbought or oversold are usually premature and can lead to an early exit from a profitable trend.
Stochastic oscillator is based on the observation that as prices increase, closing prices tend to be closer to the upper end of the price range. In downtrends, the closing price trends to be near the lower end of the range.
%K = 100 [(C - L14) / (H14-L14)]
C - latest close; L14 - lowest low for the last 14 periods; H14 - highest high for the same 14 periods
A very high reading (over 80) would put the closing price near the top of the range, a low reading (under 20) near the bottom of the range.
The second line (%D) is a 3 period moving average of the %K line - fast stochastics.
Taking 3 period average of %D - slow stochastics.
The major signal to watch for is a divergence between the D line and the price of the underlying market when the D line is in an overbought or oversold area.
A bearish divergence occurs when the D line is over 80 and forms two declining peaks while prices continue to move higher.
A bullish divergence is present when the D line is under 20 and forms two rising bottoms while prices continue to move lower.
Assuming all of these factors are in place, the actual buy or sell signal is triggered when the faster K line crosses the slower D line.
%R = 100 [(H14 - C) / (H14-L14)]
The place to start your market analysis is always by determining the general trend of the market.
The danger in placing too much importance on oscillators by themselves is the temptation to use divergence as an excuse to initiate trades contrary to the general trend.
Give less attention to the oscillator in the early stages of an important move, but pay close attention to its signals as the move reaches maturity.
Moving Average Convergence/Diergence (MACD)
The faster line (called the MACD line) is the difference between two exponentially smoothed moving averages of closing prices (usually the last 12 or 26 days or weeks). The slower line (called the signal line) is usually a 9 period exponentially smoothed average of the MACD line.
A crossing by the faster MACD line above the slower signal line is a buy signal. A crossing by the faster MACD line below the slower signal line is a sell signal.
A negative, or bearish, divergence exists when the MACD lines are well above the zero line (overbought) and start to weaken while prices continue to trend higher (market top).
A positive, or bullish, divergence exists when the MACD lines are well below the zero line (oversold) and start to move up ahead of the price line (market bottom).
The MACD histogram consists of vertical bars that show the difference between the two MACD lines.
When the histogram is over its zero line (positive) but starts to fall toward the zero line, the uptrend is weakening. When the histogram is below its zero line (negative) and starts to move upward toward to zero line, the downtrend is losing its momentum.
To use weekly signals to determine market direction and the daily signals to fine-tune entry and exit points.
Contrary Opinion adds the important third dimension to market analysis-the psychological-by determining the degree of bullishness or bearishness among participants in the various financial markets.
The principle of Contrary Opinion holds that when the vast majority of people agree on anything, they are generally wrong. A true contrarian will first try to determine what the majority are doing and then will act in the opposite direction.
Consensus Index of Bullish Market Opinion - 75% as overbought and 25% as oversold.
If the overwhelming sentiment of market traders is on one side of the market, there simply isn't enough buying or selling pressure left to continue the present trend.
The 80%, who are holding much smaller positions per trader, are considered to be weaker hands who will be forced to liquidate those longs on any sudden turn in prices.
A contrarian position can usually be considered when the bullish consensus numbers are above 90% or under 20%.
The higher the open interest figures are, the better the chance that the contrarian positions will prove profitable. Wait for the open interest number to begin to flatten out or to decline before taking actin.
Contrary Opinion works better when most of the open interest is held by speculators, who are considered to be weaker hands. It is not advisable to trade against large hedging interests.
The failure of prices to react to bullish news in an overbought area is a clear warning that a turn may be near. The first adverse news is usually enough to quickly push prices in the other direction.
Chapter 11 Point and Figure Charting
The point and figure chart is a study of pure price movement.
The larger the number of boxes required for a reversal, the less sensitive the chart becomes. By using larger box size, fewer signals are given.
The 1 box reversal is generally used for very short term activity and the 3 box for the study of the intermediate trend. The 5 box reversal, because of its severe condensation, is used for the study of long term trends.
The principle of the horizontal count is based on the premise that there is a direct relationship between the width of a congestion area and the subsequent move once a breakout occurs.
The horizontal line to account across is near the middle of the congestion area. A more precise rule is to use the line that has the least number of empty boxes in it(the line with the most number of filled in x's and o's).
3 point reversal chart
If the last column is an x column, then look at the high price for the day.
When daily high price is not high enough to fill the next x box, look at the low price to determine if a 3 box reversal has occurred in the other direction.
In an uptrend, the bullish support line is drawn at at 45 degree angle upward to the right from under the lowest column of o's.
In a downtrend, the bearish resistance line is drawn at a 45 degree angle downward to the right from the top of the highest column of x's.
1. A simple buy signal can be used for the covering of old shorts and/or the initiation of new longs.
2. A simple sell signal can be user for the liquidation of old longs and/or the initiation of new shorts.
3. The simple signal can be used only for liquidation purposes with a complex formation needed for a new commitment.
4. The trendline can be used as a filter. Long positions are taken above the trendline and short positions below the trendline.
5. For stop protection, always risk below the last column of o's in an uptrend and over the last column of x's in a downtrend.
6. The actual entry point can be varied as follows:
a. Buy the actual breakout in an uptrend.
b. Buy a 3 box reversal after the breakout occurs to obtain a lower entry point.
c. Buy a 3 box reversal in the direction of the original breakout after a correction occurs. Not only does this require the added confirmation of a positive reversal in the right direction, but a closer stop point can now be used under the latest column of o's.
d. Buy a second breakout in the same direction as the original breakout signal.
After an uninterrupted move of 10 or more boxes, place a protective stop at the point where a 3 box reversal would occur. If the position does get stopped out, reentry can be done on another 3 box reversal in the direction of the original trend.
Advantages
1. By varying the box and reversal sizes, these charts can be adapted to almost any need. There are also many different ways these charts can be used for entry and exit points.
2. Trading signals are more precise on point and figure charts than bar charts.
3. By following these specific point and figure signals, better trading discipline can be achieved.
Chapter 12 Japanese Candlesticks
Days in which the difference between the open and close prices is great (small) are called Long Days (Short Days).
Spinning Tops (indecision) are days in which the candlesticks have small bodies with upper and lower shadows that are of greater length than that of the body.
When the open price and the close price are equal, they are called Doji lines.
The Long-legged Doji has long upper and lower shadows and reflects considerable indecision on the part of market participants.
The Gravestone Doji has only a long upper shadow and no lower shadow. The longer the upper shadow, the more bearish the interpretation.
The Dragonfly Doji is the opposite of the Gravestone Doji, the lower shadow is long and there is no upper shadow. It is usually considered quite bullish.
Once the short term (ten periods or so) trend has been determined, Japanese candle patterns will significantly assist in identifying the reversal of that trend.
Dark Cloud Cover
This is a two day reversal pattern that only has bearish implications.
Piercing Line
The opposite of the Dark Cloud Cover, it has bullish implications.
Evening Star and Morning Star
The Evening Star is a bearish reversal candle pattern. The first day of this pattern is a long white candlestick which fully enforces the current uptrend. On the opening of the second day, prices gap up above the body of the first day. Trading on this second day is somewhat restricted and the close price is near the open price while remaining above the body of the first day. The body for the second day is small. This type of day following a long day is referred to as a Star pattern. A Star is a small body day that gaps away from a long body day. The third and last day of this pattern opens with a gap below the body of the star and closes lower with the close price below the midpoint of the first day.
Rising and Falling Three Methods
Bullish continuation - long white day; 3 small body days (at least 2 have black bodies) trend downward; on the fifth day, long white day closes at a new high.
Bearish continuation -
Filtered Candle Patterns
While the short term trend of the market must be identified before a candle pattern can exist, determination of overbought and oversold markets using traditional technical analysis will enhance a candle pattern's predictive ability.
Candle patterns are considered only when %D is in its presignal area (<20%, >80%).
Chapter 13 Elliott Wave Theory
There are three important aspects of wave theory - pattern, ratio, and time.
Pattern refers to the wave patterns or formations that comprise the most important element of the theory.
Ratio analysis is useful in determining retracement points and price objectives by measuring the relationships between the different waves.
Time relationship also exist and can be used to confirm the wave patterns and ratios (considered less reliable in market forecasting).
Elliott Wave Theory says that the stock market follows a repetitive rhythm of a five wave advance followed by a three wave decline.
Wave 1, 3, 5 - called impulse waves - are rising waves, while waves 2 and 4 move against the uptrend. Waves 2 and 4 are called corrective waves because they correct waves 1 and 3.
The three corrective waves are identified by the letters a, b, c.
Being able to determine between threes and fives is of tremendous importance in the application of this approach. That information tells the analyst what to expect next.
One of the most important rules to remember is that a correction can never take place in five waves.
A zig-zag is a three wave corrective pattern, against the major trend, which breaks down into a 5-3-5 sequence.
Flat follows 3-3-5 pattern.
In general, the flat is more of a consolidation than a correction and is considered a sign of strength in a bull market.
Triangles usually occur in the fourth wave and precede the final move in the direction of the major trend. (also b wave)
Elliott's triangle is a sideways consolidation pattern that breaks down into five waves, each wave in turn having three waves of its own.
Corrective patterns tend to alternate. In other words, if corrective wave 2 was a simple a-b-c pattern, wave 4 will probably be a complex pattern, such as triangle. If wave 2 is complex, wave 4 will probably be simple.
Once five up waves have been completed and a bear trend has begun, that bear market will usually not move below the previous fourth wave of one lesser degree; that is, the last fourth wave that was formed during the previous bull advance.
Fibonacci numbers - 1, 1, 2, 3, 5, 8, 13, 21, 34, 55, 89, 144...
1. The sum of any two consecutive numbers equals the next higher number.
2. The ratio of any number to its next higher number approaches .618(after first four numbers).
3. The ratio of any number to its next lower number is approximately 1.618.
4. The ratio of alternate numbers approach 2.618 or its inverse, .382.
Fibonacci rations and retracements
1. One of the three impulse waves sometimes extends. The other two are equal in time and magnitude. If wave 5 extends, wave 1 and 3 should be about equal. If wave 3 extends, waves 1 and 5 tend toward equality.
2. A minimum target for the top of wave 3 can be obtained by multiplying the length of wave 1 by 1.618 and adding that total to the bottom of 2.
3. The top of wave 5 can be approximated by multiplying wave 1 by 3.236 (2x1.618) and adding that value to the top or bottom of wave 1 for maximum and minimum targets.
4. Where waves 1 and 3 are about equal, and wave 5 is expected to extend, a price objective can be obtained by measuring the distance from the bottom of wave 1 to the top of wave 3, multiplying by 1.618, and adding the result to the bottom of 4.
5. For corrective waves, in a normal 5-3-5 zig-zag correction, wave c is often about equal to the length of wave a.
6. Another way to measure the possible length of wave c is to multiply .618 by the length of wave a and subtract that result from the bottom of wave a.
7. In the case of a flag 3-3-5 correction, where the b wave reaches or exceeds the top of wave a, wave c will be about 1.618 the length of a.
8. In a symmetrical triangle, each successive wave is related to its previous wave by about .618.
Chapter 14 Time Cycle
Two conclusions by Dewey -
First, that many of the cycles of seemingly unrelated phenomena clustered around similar periods.
The second discovery was that these similar cycles acted in synchrony, that is, they turned at the same time.
The principle of Summation holds that all price movement is the simple addition of all active cycles.
The principle of Harmonicity means that neighboring waves are usually related by a small, whole number.
The principle of Synchronicity refers to the strong tendency for waves of differing lengths to bottom at about the same time.
The principle of Variation is a recognition of the fact that all of the other cyclic principles already mentioned are just strong tendencies and hot hard and fast rules.
The principle of Nominality is based on the premise that, despite the differences that exist in the various markets and allowing for some variation in the implementing of cyclic principles, there seems to be a nominal set harmonically related cycles that affect all markets.
The cycle crests act differently depending on the trend of the next longer cycle. If the trend is up, the cycle crest shifts to the right of the ideal midpoint, causing right translation. If the longer trend is down, the cycle crest shifts to the left of the midpoint, causing left translation. Therefore, right translation is bullish and left translation is bearish.
The seasonal cycle refers to the tendency for markets to move in a given direction at certain times of the year.
The strongest three month span for the stock market is November through January. February is weaker, but is followed by a strong March and April.
Chapter 15 Computers and Trading Systems
As useful as it is, the computer is only a tool. It can make a good technical analyst even better. It won't turn a poor technician into a good one.
Chapter 16 Money Management and Trading Tactics
Any successful trading program must take into account three important factors: price forecasting, timing, and money management.
1. Price forecasting indicate which way a market is expected to trend. The forecasting process determines whether the trader is bullish or bearish.
2. Trading tactics, or timing, determines specific entry and exit points. It is quite possible to be correct on the direction of the market, but still lose money on a trade if the timing is off.
3. Money management covers the allocation of funds.
Some General Money Management Guidelines (refer primarily to futures trading)
1. Total invested funds should be limited to 50% of total capital. The balance is placed in Treasure Bills.
2. Total commitment in any one market should be limited to 10-15% of total equity.
3. The total amount risked in any one market should be limited to 5% of total equity. This 5% refers to how much the trader is willing to lose if the trade doesn't work.
4. Total margin in any market group should be limited to 20-25% of total equity.
Stop placement is an art. The trader must combine technical factors on the price chart with money management considerations. Protective stops placed too close may result in unwanted liquidation on short term market swings (noise). Protective stops placed too far away may avoid the noise factor, but result in larger losses.
That profit objective (the reward) is then balanced against the potential loss if the trade goes wrong (the risk). A commonly used yardstick is a 3 to 1 reward-to-risk ratio.
The trending portion of the position is held for the long pull. The trading portion of the portfolio is earmarked for shorter term in-and-out trading.
The worst time to increase the size of one's commitments is after a winning streak. That's much like buying into an over bought market in an uptrend. The wiser thing to do (which does against basic human nature) is to begin increasing one's commitments after a dip in equity.
Tactics on Breakouts: Anticipation or Reaction?
The trader could take a small position in anticipation of the breakout, buy some more on the breakout, and add a little more on the corrective dip following the breakout.
The Breaking of Trendlines
If the trader is looking to enter a new position on a technical sign of a trend change or a reason to exit an old position, the breaking of a tight trendline is often an excellent action signal.
Trendlines can also be used for entry points when they act as support or resistance. Buying against a major up trendline or selling against a down trendline can be an effective timing strategy.
Using Support and Resistance
The breaking of resistance can be a signal for a new long position. Protective stops can then be placed under the nearest support point.
Rallies to resistance in a downtrend or declines to support in an uptrend can be used to initiate new positions or add to old profitable ones.
Using Percentage Retracements
In an uptrend, pullbacks that retrace 40-60% of the prior advance can be utilized for new or additional long positions.
Bounces of 40-60% usually provide excellent shorting opportunities in downtrends.
Percentage retracements can be used on intraday charts.
Using Price Gaps
Buy a dip to the upper end of the gap or a dip into the gap itself. In a bear move, sell a rally to the lower end of the gap or into the gap itself.
Types of trading orders
1. The market order instructs your broker to buy or sell at the current market price.
2. The limit order specifies a price that the trader is willing to pay or accept.
3. A stop order can be used to establish a new position, limit a loss on an existing position, or protect profit.
4. A stop limit order combines both a stop and limit order.
5. The market-if-touched (M.I.T.) order is similar to a limit order, except that it becomes a market order when the limit price is touched.
Important elements of money management and trading -
1. Trade in the direction of the intermediate trend.
2. In uptrends, buy the dips; in downtrends, sell bounces.
3. Let profit run, cut losses short.
4. Use protective stops to limit losses.
5. Don't trade impulsively; have a plan.
6. Plan your work and work your plan.
7. Use money management principles.
8. Diversify, but don't overdo it.
9. Employ at least a 3 to 1 reward-to-risk ratio.
10. When pyramiding (adding positions), follow these guidelines.
a. Each successive layer should be smaller than before.
b. Add only to winning positions.
c. Never add to a losing position.
d. Adjust protective stops to the breakeven point.
11. Never meet a margin call; don't throw good money after bad.
12. Close out losing positions before the winning ones.
13. Except for very short term trading, make decisions away from the market, preferably when the markets are closed.
14. Work from the long term to the short term.
15. Use intraday charts to fine-tune entry and exit.
16. Master interday trading before trying interday trading.
17. Try to ignore conventional wisdom; don't take anything said in the financial media too seriously.
18. Learn to be comfortable being in the minority. If you're right on the market, most people will disagree with you.
19. Technical analysis is a skill that improves with experience and study. Always be a student and keep learning.
20. Keep it simple; more complicated isn't always better.
Chapter 17 The Link Between Stocks and Futures: Intermarket Analysis
Early warnings signs of inflation and interest rate trends are usually spotted in the futures pits first, which often determine the direction stock prices will take at any given time.
The premium (or spread) between S&P 500 futures over the cash index diminishes as the futures contract approaches expiration. Each day, institutions calculate what the actual premium should be - called fair value.
Bond price move in the opposite direction of interest rate or yields. When bond prices are rising, yields are falling. That is normally considered positive for stocks. Falling bond prices, or rising yields, are considered negative for stocks.
On a short term basis, sudden changes in trend in the S&P 500 futures contract are often influenced by sudden changes in the Treasury Bond futures contract.
Commodity prices usually trend in the opposite direction of bond prices.
A rising U.S. dollar normally has a depressing effect on most commodity prices. In other words, a rising dollar is normally considered to be noninflationary. The gold market usually acts as a leading indicator for other commodity markets.
Gold mining shares can be used as leading indicators for gold prices.
The general idea is to rotate your funds into those sectors of the market whose relative strength lines are just turning up, and to rotate out of those market groups whose relative strength lines are just turning down.
Chapter 18 Stock Market Indicators
The most common way to calculate the AD (advance-decline) line is to take the difference between the number of advancing issues and the number of declining issues. The danger appears when the AD line begins to diverge from the Dow.
Historically, the AD line peaks out well ahead of the market averages, which is why it's watched so closely.
McClellan Oscillator is constructed by taking the difference between two exponential moving averages of the daily NYSE advance-decline figures.
A McClellan Oscillator reading above +100 is a signal of an overbought stock market. A reading below -100 is considered an oversold stock market.
The McClellan Summation Index is a cumulative sum of each day's positive or negative readings in the McClellan Oscillator.
In a strong market, the number of new highs should be much greater than the number of new lows.
Whenever the new highs reach an extreme, the market has a topping tendency. Whenever new lows reach an extreme, the market is near a bottom.
The Arms Index is a ratio of a ratio. The numerator is the ratio of the number of advancing issues divided by the number of declining issues. The denominator is the advancing volume divided by declining volume. On an intraday basis, a very high Arms Index reading is positive, while a very low reading is negative. The Arms Index is a contrary indicator that trends in the opposite direction of the market.
TICK measures the difference between the number of stocks trading on an uptick versus the number trading on a downtick.
A rising TICK indicator and falling Arms Index (TRIN) are positive, while a falling TICK indicator and a rising Arms Index (TRIN) are negative.
In the "Open" version of the Arms Index (Open Arms), each of the four components in the formula is averaged separately over a period of 10 days.
On the Equivolume chart, each price bar is shown as a rectangle. The height of the rectangle measures the day's trading range. The width of the rectangle is determined by that day's volume.
A CandlePower chart combines equivolume and candlesticks. The width of each candle is determined by volume.
A comparison of the Russell 2000 and the S&P 500 tells us whether the "troops" are following the "generals".
Chapter 19 Pulling It All Together - A Checklist
Technical analysis is much like putting together a giant jigsaw puzzle. Each technical tool holds a piece of the puzzle.
Technical checklist
1. What is the direction of the overall market?
2. What is the direction of the various market sectors?
3. What are the weekly and monthly charts showing?
4. Are the major, intermediate, and minor trends up, down, or sideways?
5. Where are the important support and resistance levels?
6. Where are the important trendlines or channels?
7. Are volume and open interest confirming the price action?
8. Where the 33%, 50%, and 66% retracements?
9. Are there any price gaps and what types are they?
10. Are there any major reversal patterns visible?
11. Are there any continuation patterns visible?
12. What are the price objectives from those patterns?
13. Which way are the moving averages pointing?
14. Are the oscillators overbought or oversold?
15. Are any divergences apparent on the oscillators?
16. Are contrary opinion numbers showing any extremes?
17. What is the Elliot Wave pattern showing?
18. Are there any obvious 3 or 5 ware patterns?
19. What about Fibonacci retracements or projections?
20. Are there any cycle tops or bottoms due?
21. Is the market showing right left translation?
22. Which way is the computer trend moving: up, down, or sideways?
23. What are the point and figure charts or candlesticks showing?
After you've arrived at a bullish or bearish conclusion, ask yourself the following questions.
1. Which way will this market trend over the next several months?
2. Am I going to buy or sell this market?
3. How many units will I trade?
4. How much am I prepared to risk if I'm wrong?
5. What is my profit objective?
6. Where will I enter the market?
7. What type of order will I use?
8. Where will I place my protective stop?
Chapter 1 Philosophy of Technical Analysis
Technical analysis is the study of market action, primarily through the use of charts, for the purpose of forecasting future price trends.
Philosophy or rationale
1. Market action discounts everything.
2. Prices move in trends.
3. History repeats itself.
As a rule, chartists do not concern themselves with the reasons why prices rise or fall. Very often, in the early stages of price trend or at critical turning points, no one seems to know exactly why a market is performing a certain way.
A trend in motion is more likely to continue than to reverse.
The fundamentalist studies the cause of market movement, while the technician studies the effect.
Market price tends to lead the known fundamentals. Stated another way, market price acts as a leading indicator of the fundamentals or the conventional wisdom of the moment. (* This is not correct! There is cause, then there is effect. Someone must know the change with fundamentals and act accordingly, thus move the prices. Otherwise, market is moved blindly.)
Chart reading becomes a shortcut form of fundamental analysis. (* This is not correct! One side statement.)
Because of the high leverage factor in the futures markets, timing is especially crucial in that arena. It is quite possible to be correct on the general trend of the market and still lose money.
One of the great strengths of technical analysis is its adaptability to virtually any trading medium and time dimension.
Technical analysis in stocks relies much more heavily on the use of sentiment indicators and flow of fund analysis.
Technical analysis in the futures markets is a much purer form of price analysis.
Chapter 2 Dow Theory
Charles Dow and his partner Edward Jones founded Dow Jones & Company in 1882.
Dow theory still forms the cornerstone of the study of technical analysis.
Basic tenets of Dow theory
1. The average discount everything.
2. The market has three trends.
3. Major trends have three phases.
4. The averages must confirm each other.
5. Volume must confirm the trend.
6. A trend is assumed to be in effect until it gives definite signals that it has reversed.
Dow relied exclusively on closing prices.
Chapter 3 Chart Construction
The bar chart shows the open, high, low, and closing prices. The tic to the right of the vertical bar is the closing price. The opening price is the tic to the left of the bar.
In the line chart, only the closing price is plotted for each successive day.
Point and figure chart - x column shows rising prices; o column shows falling prices.
Candlestick chart
Weekly and monthly charts compress the price action to allow for much longer range trend analysis.
Chapter 4 Basic Concepts of Trend
The important point to remember here is that the breaking of the third line is the valid trend reversal signal.
It's interesting to note that how often the number three shows up in the study of technical analysis and the important role it plays in so many technical approaches.
In general, most important up trendlines tend to approximate an average slope of 45 degrees.
If a trendline is too steep, it usually indicates that prices are advancing too rapidly and that the current steep ascent will not be sustained.
If a trendline is too flat, it may indicate that the uptrend is too weak and not to be trusted.
As in the case of the basic trendline, the longer the channel remians intact and the more often it is successfully tested, the more important and reliable it becomes.
The failure to reach the upper end of the channel is often an early warning that the lower line will be broken.
As a general rule of thumb, the failure of any move within an established price channel to reach one side of the channel usually indicates that the trend is shifing, and increases the likelihood that the other side of the channel will be broken.
Once a breakout occurs from an existing price channel, prices usually travel a distance equal to the width of the channel.
It should always be kept in mind that of the two lines, the basic trendline is by far the more important and the more reliable.
Usually, a minimum retracement is about 33% and a maximum about 66%. What this means is that, in a correction of a strong trend, the market usually retraces at least a third of the previous move.
The maximum retracement parameter is 66%, which becomes an especially critical area. If the prior trend is to be maintained, the correction must stop at the two-thirds point.
Gann and Fibonacci lines are used in the same way as speedlines. They are supposed to provide support during downward corrections. When one line is broken, pricess will usually fall to the next lower line.
The breakaway gap usually occurs at the completion of an important price pattern, and usually signals the beginning of a significant market move. Ater a market has completed a major basing pattern, the breaking of resistance often occurs on a breakway gap.
Breakaway gaps usually occur on heavy volume.
After the move has been underway for awhile, somewhere around the middle of the move, prices will leap forward to form a second type of gap (or a series of gaps) called the runaway gap (measuring gap). This type of gap reveals a situation where the market is moving offerotlessly on moderate volume.
The Exhaustion Gap. The final type of gap appears near the end of a market move. Near the end of an uptrend, prices leap forward in a last gasp.
The Island Reversal. Sometimes after the upward exhaustion gap has formed, prices will trade in a narrow range for a couple of days or a couple of weeks before gapping to the downside.
Chapter 5 Major Reversal Patterns
Price patterns are pictures or formations, which appear on price charts of stocks or commodities, that can be classifies into different categories, and that have predictive value.
TWO TYPES OF PATTERNS: REVERSAL AND CONTINUATION
1. A prerequisite for any reversal pattern is the existence of a prior trend.
2. The first signal of an impending trend reversal is often the breaking of an important trendline.
3. The larger the pattern, the greater the subsequent move.
4. Topping patterns are usually shorter in duration and more volatile than bottoms.
5. Bottoms usually have smaller price ranges and take longer to build.
6. Volume is usually more important on the upside.
Topping patterns are usually shorter in duration and are more volatile than bottoms.
The completion of each pattern should be accompanied by a noticeable increase in volume.
THE HEAD AND SHOULDERS REVERSAL PATTERN
Most of the other reversal patterns are just variations of the head and shoulders.
The left and right shoulders (A and E) are at about the same height. The head (C) is higher than either shoulder. Notice the higher volume on each peak. The pattern is completed on a close under the neckline (line 2). The minimum objective is the vertical distance from the head to the neckline projected downward from the breaking of the neckline. A return move will often occur back to the neckline, which should not recross the neckline once it has been broken.
THE IMPORTANCE OF VOLUME
As a general rule, the second peak (the head) should take place on lighter volume than the left shoulder.
The most important volume signal takes place during the third peak (the right shoulder). Volume should be noticeably lighter than on the previous two peaks. Volume should then expand on the breaking of the neckline, decline during the return move, and then expand again once the return move is over.
FINDING A PRICE OBJECTIVE
In general, most valid double tops or bottoms should have at least a month between the two peaks or troughs. Some will even be two or three months apart.
The saucer bottom shows a very slow and very gradual turn from down to sideways to up.
Saucer bottoms are usually spotted on weekly or monthly charts that span several years. The longer they last, the more significant they become.
Spikes are the hardest market turns to deal with because the spike (or V pattern) happens very quickly with little or no transition period.
Chaper 6 Continuation Patterns
Continuatoin patterns are usually shorter term in the duration and are more acurately classified as near term or intermediate patterns.
There are three types of triangles - symmetrical, ascending, and descending.
The symmetrical triangle is also called a coil.
The ascending triangle has a rising lower line with a flat or horizontal upper line.
The descending triange has the upper line declining with a flat or horizontal bottom line.
As a general rule, prices should break out in the direction of the prior trend somewhere betwen two-thirds to three-quarters of the horizontal width of the triangle.
The accending triangle is bullish and the descending triangle is bearish. The symmetrical triangle, by contrast, is inherently a neutral pattern.
The triangle is considered an intermediate pattern, meaning that it usually takes longer than a month to form, but generally less than three months.
The expanding pattern, therefore, is usually a bearish formation. It generally appears near the end of a major bull market.
The flag and pennant represent brief pauses in a dynamic market move. In fact, one of the requirements for both the flag and pennant is that they be preceded by a sharp and almost straight line move.
Flags and pennants are among the most reliable of contiuation patterns and only rarely produce a trend reversal.
A bullish pennant resembles a small symmetrical triangle, but usually lasts no longer than three weeks. Volume should be light during its formation.
The wedge formation is similar to a symmetrical triangle both in terms of its shape and the amount of time it talkes to form.
The wedge pattern has a noticeable slant either to the upside or the downside. As a rule, like the flag pattern, the wedge slants against the prevailing tend. Therefore, a falling wedge is considered bullish and a rising wedge is bearish.
The rectangle is sometimes referred to as a trading range or a congestion area.
Chapter 7 Volume and Open Interest
Technicians believe that volume precedes price, meaning that the loss of upside pressure in an uptrend or downside pressure in a downtrend actually shows up in the volume figures before it is manifested in a reversal of the price trend.
On Balance Volume. A running cumulative total is then maintained by adding or subtracting each day's volume based on the direction of the market close.
It is the direction of the OBV line (its trend) that is important and not the actual numbers themselves.
It's when the volume line fails to move in the same directoin as prices that a divergence exists and warns of a possible trend reversal.
1. Rising open interest in an uptrend is bullish.
2. Declining open interst in an uptrend is bearish.
3. Rising open interest in a downtrend is bearish.
4. Declining open interest in a downtrend is bullish.
1. Toward the end of major market moves, where open interest has been increasing throughout the price trend, a leveling off or decline in open interest is often an early warning of a change in trend.
2. A high open interest figure at market tops can be considered bearish if the price drop is very sudden.
3. If open interest builds up noticeably during a sideways consolidation or a horizontal trading range, the ensuing price move intensifies once the breakout occurs.
4. Increasing open interest at the completion of a price pattern is viewed as added confirmation of a reliable trend signal.
In the case of a blowoff at market tops, prices suddenly begin to rally sharply after a long advance, accompanied by a large jump in trading activity and then peak abruptly. In a selling climax bottom, prices suddenly drop sharply on heavy trading activity and rebound as quickly.
The put/call ratio is usually viewed as a contrary indicator. A very high ratio signals an oversold market. A very low ratio is a negative warning of an overbought market.
Chapter 8 Long Term Charts
Anyone who is not consulting these longer range charts is missing an enormous amount of valuable price information.
The proper order to follow in chart analysis is to begin with the long range and gradually work to the near term.
Chapter 9 Moving Averages
The moving average is a follower, not a leader. It never anticipates; it only reacts.
The longer averages work better as long as the trend remains in force, but a shorter average is better when the trend is in the process of reversing.
The most widely used triple crossover system is the popular 4-9-18-day moving average combination.
A buying alert takes place in a downtrend when the 4 day crosses above both the 9 and the 18. A confirmed buy signal occurs when the 9 day then crosses above the 18.
Bollinger Bands are placed two standard deviations above and below the moving average, which is usually 20 days.
The simplest way to use Bollinger Bands is to use the upper and lower bands as price targets.
Bollinger Bands expand and contract based on the last 20 days' volatility.
The 4 week rule is used primarily for futures trading.
1. Cover short positions and buy long whenever the price exceeds the highs of the four preceding full calendar weeks.
2. Liquidate long positions and sell short whenever the price falls below the lows of the four preceding full calendar weeks.
Chapter 10 Oscillators and Contrary Opinion
The oscillator is extremely useful in nontrending markets where prices fluctuate in a horizontal price band, or trading range, creating a market situation where most trend-following systems simply don't work that well.
The oscillator is only a secondary indicator in the sense that it must be subordinated to basic trend analysis.
1. The oscillator is most useful when its value reaches an extreme reading near the upper or lower end of its boundaries. The market is said to be overbought when it is near the upper extreme and oversold when it is near the lower extreme. This warns that the price trend is overextended and vulnerable.
2. A divergence between the oscillator and the price action when the oscillator is in an extreme position is usually an important warning.
3. The crossing of the zero (or midpoint) line can give important trading signals in the direction of the price trend.
Market momentum is measured by continually taking price differences for a fixed time interval.
If the prices are rising and the momentum line is above the zero line and rising, this means the uptrend is accelerating.
Buy position should only be taken on crossings above the zero line if the market trend is up.
To measure the rate of change, a ratio is constructed of the most recent closing price to a price a certain number of days in the past.
Plotting the difference between the two averages as a histogram.
These histogram bars appear as a plus or minus value around a centered zero line. This type of oscillator has three uses:
1. To help spot divergences.
2. To help identity short term variations from the long term trend, when the shorter average moves too far above or below the longer average.
3. To pinpoint the crossings of the two moving averages, which occur when the oscillator crosses the zero line.
Commodity Channel Index (CCI) - compares the current price with a moving average over a selected time span; then normalizes the oscillator values by using divisor based on mean deviation.
CCI readings over +100 are considered overbought and under -100 are oversold.
Relative strength (RS) is determined by dividing the up average by the down average.
RSI=100*(up average)/(up average+down average)
RSI movements above 70 are considered overbought, an oversold condition would be a move under 30.
The 80 level becomes the overbought level in bull markets and the 20 level the oversold level in bear market.
A top failure swing occurs when a peak in the RSI (over 70) fails to exceed a previous peak in an uptrend, followed by a downside break of a previous trough.
A bottom failure swing occurs when the RSI is in a downtrend (under 30), fails to set a new low, and then proceeds to exceed a previous peak.
Divergence between the RSI and the price line, when the RSI is above 70 or below 30, is a serious warning that should be heeded.
Any strong trend, either up or down, usually produces an extreme oscillator reading before too long. In such cases, claims that a market is overbought or oversold are usually premature and can lead to an early exit from a profitable trend.
Stochastic oscillator is based on the observation that as prices increase, closing prices tend to be closer to the upper end of the price range. In downtrends, the closing price trends to be near the lower end of the range.
%K = 100 [(C - L14) / (H14-L14)]
C - latest close; L14 - lowest low for the last 14 periods; H14 - highest high for the same 14 periods
A very high reading (over 80) would put the closing price near the top of the range, a low reading (under 20) near the bottom of the range.
The second line (%D) is a 3 period moving average of the %K line - fast stochastics.
Taking 3 period average of %D - slow stochastics.
The major signal to watch for is a divergence between the D line and the price of the underlying market when the D line is in an overbought or oversold area.
A bearish divergence occurs when the D line is over 80 and forms two declining peaks while prices continue to move higher.
A bullish divergence is present when the D line is under 20 and forms two rising bottoms while prices continue to move lower.
Assuming all of these factors are in place, the actual buy or sell signal is triggered when the faster K line crosses the slower D line.
%R = 100 [(H14 - C) / (H14-L14)]
The place to start your market analysis is always by determining the general trend of the market.
The danger in placing too much importance on oscillators by themselves is the temptation to use divergence as an excuse to initiate trades contrary to the general trend.
Give less attention to the oscillator in the early stages of an important move, but pay close attention to its signals as the move reaches maturity.
Moving Average Convergence/Diergence (MACD)
The faster line (called the MACD line) is the difference between two exponentially smoothed moving averages of closing prices (usually the last 12 or 26 days or weeks). The slower line (called the signal line) is usually a 9 period exponentially smoothed average of the MACD line.
A crossing by the faster MACD line above the slower signal line is a buy signal. A crossing by the faster MACD line below the slower signal line is a sell signal.
An overbought condition is present when the lines are too far above the zero line. An oversold condition is present when the lines are too far below the zero line.
A negative, or bearish, divergence exists when the MACD lines are well above the zero line (overbought) and start to weaken while prices continue to trend higher (market top).
A positive, or bullish, divergence exists when the MACD lines are well below the zero line (oversold) and start to move up ahead of the price line (market bottom).
The MACD histogram consists of vertical bars that show the difference between the two MACD lines.
When the histogram is over its zero line (positive) but starts to fall toward the zero line, the uptrend is weakening. When the histogram is below its zero line (negative) and starts to move upward toward to zero line, the downtrend is losing its momentum.
To use weekly signals to determine market direction and the daily signals to fine-tune entry and exit points.
Contrary Opinion adds the important third dimension to market analysis-the psychological-by determining the degree of bullishness or bearishness among participants in the various financial markets.
The principle of Contrary Opinion holds that when the vast majority of people agree on anything, they are generally wrong. A true contrarian will first try to determine what the majority are doing and then will act in the opposite direction.
Consensus Index of Bullish Market Opinion - 75% as overbought and 25% as oversold.
If the overwhelming sentiment of market traders is on one side of the market, there simply isn't enough buying or selling pressure left to continue the present trend.
The 80%, who are holding much smaller positions per trader, are considered to be weaker hands who will be forced to liquidate those longs on any sudden turn in prices.
A contrarian position can usually be considered when the bullish consensus numbers are above 90% or under 20%.
The higher the open interest figures are, the better the chance that the contrarian positions will prove profitable. Wait for the open interest number to begin to flatten out or to decline before taking actin.
Contrary Opinion works better when most of the open interest is held by speculators, who are considered to be weaker hands. It is not advisable to trade against large hedging interests.
The failure of prices to react to bullish news in an overbought area is a clear warning that a turn may be near. The first adverse news is usually enough to quickly push prices in the other direction.
Chapter 11 Point and Figure Charting
The point and figure chart is a study of pure price movement.
The larger the number of boxes required for a reversal, the less sensitive the chart becomes. By using larger box size, fewer signals are given.
The 1 box reversal is generally used for very short term activity and the 3 box for the study of the intermediate trend. The 5 box reversal, because of its severe condensation, is used for the study of long term trends.
The principle of the horizontal count is based on the premise that there is a direct relationship between the width of a congestion area and the subsequent move once a breakout occurs.
The horizontal line to account across is near the middle of the congestion area. A more precise rule is to use the line that has the least number of empty boxes in it(the line with the most number of filled in x's and o's).
3 point reversal chart
If the last column is an x column, then look at the high price for the day.
When daily high price is not high enough to fill the next x box, look at the low price to determine if a 3 box reversal has occurred in the other direction.
In an uptrend, the bullish support line is drawn at at 45 degree angle upward to the right from under the lowest column of o's.
In a downtrend, the bearish resistance line is drawn at a 45 degree angle downward to the right from the top of the highest column of x's.
1. A simple buy signal can be used for the covering of old shorts and/or the initiation of new longs.
2. A simple sell signal can be user for the liquidation of old longs and/or the initiation of new shorts.
3. The simple signal can be used only for liquidation purposes with a complex formation needed for a new commitment.
4. The trendline can be used as a filter. Long positions are taken above the trendline and short positions below the trendline.
5. For stop protection, always risk below the last column of o's in an uptrend and over the last column of x's in a downtrend.
6. The actual entry point can be varied as follows:
a. Buy the actual breakout in an uptrend.
b. Buy a 3 box reversal after the breakout occurs to obtain a lower entry point.
c. Buy a 3 box reversal in the direction of the original breakout after a correction occurs. Not only does this require the added confirmation of a positive reversal in the right direction, but a closer stop point can now be used under the latest column of o's.
d. Buy a second breakout in the same direction as the original breakout signal.
After an uninterrupted move of 10 or more boxes, place a protective stop at the point where a 3 box reversal would occur. If the position does get stopped out, reentry can be done on another 3 box reversal in the direction of the original trend.
Advantages
1. By varying the box and reversal sizes, these charts can be adapted to almost any need. There are also many different ways these charts can be used for entry and exit points.
2. Trading signals are more precise on point and figure charts than bar charts.
3. By following these specific point and figure signals, better trading discipline can be achieved.
Chapter 12 Japanese Candlesticks
Days in which the difference between the open and close prices is great (small) are called Long Days (Short Days).
Spinning Tops (indecision) are days in which the candlesticks have small bodies with upper and lower shadows that are of greater length than that of the body.
When the open price and the close price are equal, they are called Doji lines.
The Long-legged Doji has long upper and lower shadows and reflects considerable indecision on the part of market participants.
The Gravestone Doji has only a long upper shadow and no lower shadow. The longer the upper shadow, the more bearish the interpretation.
The Dragonfly Doji is the opposite of the Gravestone Doji, the lower shadow is long and there is no upper shadow. It is usually considered quite bullish.
Once the short term (ten periods or so) trend has been determined, Japanese candle patterns will significantly assist in identifying the reversal of that trend.
Dark Cloud Cover
This is a two day reversal pattern that only has bearish implications.
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| Dark Cloud Cover |
The opposite of the Dark Cloud Cover, it has bullish implications.
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| Piercing Line |
Evening Star and Morning Star
The Evening Star is a bearish reversal candle pattern. The first day of this pattern is a long white candlestick which fully enforces the current uptrend. On the opening of the second day, prices gap up above the body of the first day. Trading on this second day is somewhat restricted and the close price is near the open price while remaining above the body of the first day. The body for the second day is small. This type of day following a long day is referred to as a Star pattern. A Star is a small body day that gaps away from a long body day. The third and last day of this pattern opens with a gap below the body of the star and closes lower with the close price below the midpoint of the first day.
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| Evening Star |
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| Morning Star |
Bullish continuation - long white day; 3 small body days (at least 2 have black bodies) trend downward; on the fifth day, long white day closes at a new high.
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| Rising 3 Method |
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| Falling 3 Method |
Filtered Candle Patterns
While the short term trend of the market must be identified before a candle pattern can exist, determination of overbought and oversold markets using traditional technical analysis will enhance a candle pattern's predictive ability.
Candle patterns are considered only when %D is in its presignal area (<20%, >80%).
Chapter 13 Elliott Wave Theory
There are three important aspects of wave theory - pattern, ratio, and time.
Pattern refers to the wave patterns or formations that comprise the most important element of the theory.
Ratio analysis is useful in determining retracement points and price objectives by measuring the relationships between the different waves.
Time relationship also exist and can be used to confirm the wave patterns and ratios (considered less reliable in market forecasting).
Elliott Wave Theory says that the stock market follows a repetitive rhythm of a five wave advance followed by a three wave decline.
Wave 1, 3, 5 - called impulse waves - are rising waves, while waves 2 and 4 move against the uptrend. Waves 2 and 4 are called corrective waves because they correct waves 1 and 3.
The three corrective waves are identified by the letters a, b, c.
Being able to determine between threes and fives is of tremendous importance in the application of this approach. That information tells the analyst what to expect next.
One of the most important rules to remember is that a correction can never take place in five waves.
A zig-zag is a three wave corrective pattern, against the major trend, which breaks down into a 5-3-5 sequence.
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| Bull market zig-zag |
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| Double zig-zag |
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| Regular Flat |
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| Expanded Flat |
Triangles usually occur in the fourth wave and precede the final move in the direction of the major trend. (also b wave)
Elliott's triangle is a sideways consolidation pattern that breaks down into five waves, each wave in turn having three waves of its own.
Corrective patterns tend to alternate. In other words, if corrective wave 2 was a simple a-b-c pattern, wave 4 will probably be a complex pattern, such as triangle. If wave 2 is complex, wave 4 will probably be simple.
Once five up waves have been completed and a bear trend has begun, that bear market will usually not move below the previous fourth wave of one lesser degree; that is, the last fourth wave that was formed during the previous bull advance.
Fibonacci numbers - 1, 1, 2, 3, 5, 8, 13, 21, 34, 55, 89, 144...
1. The sum of any two consecutive numbers equals the next higher number.
2. The ratio of any number to its next higher number approaches .618(after first four numbers).
3. The ratio of any number to its next lower number is approximately 1.618.
4. The ratio of alternate numbers approach 2.618 or its inverse, .382.
Fibonacci rations and retracements
1. One of the three impulse waves sometimes extends. The other two are equal in time and magnitude. If wave 5 extends, wave 1 and 3 should be about equal. If wave 3 extends, waves 1 and 5 tend toward equality.
2. A minimum target for the top of wave 3 can be obtained by multiplying the length of wave 1 by 1.618 and adding that total to the bottom of 2.
3. The top of wave 5 can be approximated by multiplying wave 1 by 3.236 (2x1.618) and adding that value to the top or bottom of wave 1 for maximum and minimum targets.
4. Where waves 1 and 3 are about equal, and wave 5 is expected to extend, a price objective can be obtained by measuring the distance from the bottom of wave 1 to the top of wave 3, multiplying by 1.618, and adding the result to the bottom of 4.
5. For corrective waves, in a normal 5-3-5 zig-zag correction, wave c is often about equal to the length of wave a.
6. Another way to measure the possible length of wave c is to multiply .618 by the length of wave a and subtract that result from the bottom of wave a.
7. In the case of a flag 3-3-5 correction, where the b wave reaches or exceeds the top of wave a, wave c will be about 1.618 the length of a.
8. In a symmetrical triangle, each successive wave is related to its previous wave by about .618.
Chapter 14 Time Cycle
Two conclusions by Dewey -
First, that many of the cycles of seemingly unrelated phenomena clustered around similar periods.
The second discovery was that these similar cycles acted in synchrony, that is, they turned at the same time.
The principle of Summation holds that all price movement is the simple addition of all active cycles.
The principle of Harmonicity means that neighboring waves are usually related by a small, whole number.
The principle of Synchronicity refers to the strong tendency for waves of differing lengths to bottom at about the same time.
The principle of Variation is a recognition of the fact that all of the other cyclic principles already mentioned are just strong tendencies and hot hard and fast rules.
The principle of Nominality is based on the premise that, despite the differences that exist in the various markets and allowing for some variation in the implementing of cyclic principles, there seems to be a nominal set harmonically related cycles that affect all markets.
The cycle crests act differently depending on the trend of the next longer cycle. If the trend is up, the cycle crest shifts to the right of the ideal midpoint, causing right translation. If the longer trend is down, the cycle crest shifts to the left of the midpoint, causing left translation. Therefore, right translation is bullish and left translation is bearish.
The seasonal cycle refers to the tendency for markets to move in a given direction at certain times of the year.
The strongest three month span for the stock market is November through January. February is weaker, but is followed by a strong March and April.
Chapter 15 Computers and Trading Systems
As useful as it is, the computer is only a tool. It can make a good technical analyst even better. It won't turn a poor technician into a good one.
Chapter 16 Money Management and Trading Tactics
Any successful trading program must take into account three important factors: price forecasting, timing, and money management.
1. Price forecasting indicate which way a market is expected to trend. The forecasting process determines whether the trader is bullish or bearish.
2. Trading tactics, or timing, determines specific entry and exit points. It is quite possible to be correct on the direction of the market, but still lose money on a trade if the timing is off.
3. Money management covers the allocation of funds.
Some General Money Management Guidelines (refer primarily to futures trading)
1. Total invested funds should be limited to 50% of total capital. The balance is placed in Treasure Bills.
2. Total commitment in any one market should be limited to 10-15% of total equity.
3. The total amount risked in any one market should be limited to 5% of total equity. This 5% refers to how much the trader is willing to lose if the trade doesn't work.
4. Total margin in any market group should be limited to 20-25% of total equity.
Stop placement is an art. The trader must combine technical factors on the price chart with money management considerations. Protective stops placed too close may result in unwanted liquidation on short term market swings (noise). Protective stops placed too far away may avoid the noise factor, but result in larger losses.
That profit objective (the reward) is then balanced against the potential loss if the trade goes wrong (the risk). A commonly used yardstick is a 3 to 1 reward-to-risk ratio.
The trending portion of the position is held for the long pull. The trading portion of the portfolio is earmarked for shorter term in-and-out trading.
The worst time to increase the size of one's commitments is after a winning streak. That's much like buying into an over bought market in an uptrend. The wiser thing to do (which does against basic human nature) is to begin increasing one's commitments after a dip in equity.
Tactics on Breakouts: Anticipation or Reaction?
The trader could take a small position in anticipation of the breakout, buy some more on the breakout, and add a little more on the corrective dip following the breakout.
The Breaking of Trendlines
If the trader is looking to enter a new position on a technical sign of a trend change or a reason to exit an old position, the breaking of a tight trendline is often an excellent action signal.
Trendlines can also be used for entry points when they act as support or resistance. Buying against a major up trendline or selling against a down trendline can be an effective timing strategy.
Using Support and Resistance
The breaking of resistance can be a signal for a new long position. Protective stops can then be placed under the nearest support point.
Rallies to resistance in a downtrend or declines to support in an uptrend can be used to initiate new positions or add to old profitable ones.
Using Percentage Retracements
In an uptrend, pullbacks that retrace 40-60% of the prior advance can be utilized for new or additional long positions.
Bounces of 40-60% usually provide excellent shorting opportunities in downtrends.
Percentage retracements can be used on intraday charts.
Using Price Gaps
Buy a dip to the upper end of the gap or a dip into the gap itself. In a bear move, sell a rally to the lower end of the gap or into the gap itself.
Types of trading orders
1. The market order instructs your broker to buy or sell at the current market price.
2. The limit order specifies a price that the trader is willing to pay or accept.
3. A stop order can be used to establish a new position, limit a loss on an existing position, or protect profit.
4. A stop limit order combines both a stop and limit order.
5. The market-if-touched (M.I.T.) order is similar to a limit order, except that it becomes a market order when the limit price is touched.
Important elements of money management and trading -
1. Trade in the direction of the intermediate trend.
2. In uptrends, buy the dips; in downtrends, sell bounces.
3. Let profit run, cut losses short.
4. Use protective stops to limit losses.
5. Don't trade impulsively; have a plan.
6. Plan your work and work your plan.
7. Use money management principles.
8. Diversify, but don't overdo it.
9. Employ at least a 3 to 1 reward-to-risk ratio.
10. When pyramiding (adding positions), follow these guidelines.
a. Each successive layer should be smaller than before.
b. Add only to winning positions.
c. Never add to a losing position.
d. Adjust protective stops to the breakeven point.
11. Never meet a margin call; don't throw good money after bad.
12. Close out losing positions before the winning ones.
13. Except for very short term trading, make decisions away from the market, preferably when the markets are closed.
14. Work from the long term to the short term.
15. Use intraday charts to fine-tune entry and exit.
16. Master interday trading before trying interday trading.
17. Try to ignore conventional wisdom; don't take anything said in the financial media too seriously.
18. Learn to be comfortable being in the minority. If you're right on the market, most people will disagree with you.
19. Technical analysis is a skill that improves with experience and study. Always be a student and keep learning.
20. Keep it simple; more complicated isn't always better.
Chapter 17 The Link Between Stocks and Futures: Intermarket Analysis
Early warnings signs of inflation and interest rate trends are usually spotted in the futures pits first, which often determine the direction stock prices will take at any given time.
The premium (or spread) between S&P 500 futures over the cash index diminishes as the futures contract approaches expiration. Each day, institutions calculate what the actual premium should be - called fair value.
Bond price move in the opposite direction of interest rate or yields. When bond prices are rising, yields are falling. That is normally considered positive for stocks. Falling bond prices, or rising yields, are considered negative for stocks.
On a short term basis, sudden changes in trend in the S&P 500 futures contract are often influenced by sudden changes in the Treasury Bond futures contract.
Commodity prices usually trend in the opposite direction of bond prices.
A rising U.S. dollar normally has a depressing effect on most commodity prices. In other words, a rising dollar is normally considered to be noninflationary. The gold market usually acts as a leading indicator for other commodity markets.
Gold mining shares can be used as leading indicators for gold prices.
The general idea is to rotate your funds into those sectors of the market whose relative strength lines are just turning up, and to rotate out of those market groups whose relative strength lines are just turning down.
Chapter 18 Stock Market Indicators
The most common way to calculate the AD (advance-decline) line is to take the difference between the number of advancing issues and the number of declining issues. The danger appears when the AD line begins to diverge from the Dow.
Historically, the AD line peaks out well ahead of the market averages, which is why it's watched so closely.
McClellan Oscillator is constructed by taking the difference between two exponential moving averages of the daily NYSE advance-decline figures.
A McClellan Oscillator reading above +100 is a signal of an overbought stock market. A reading below -100 is considered an oversold stock market.
The McClellan Summation Index is a cumulative sum of each day's positive or negative readings in the McClellan Oscillator.
In a strong market, the number of new highs should be much greater than the number of new lows.
Whenever the new highs reach an extreme, the market has a topping tendency. Whenever new lows reach an extreme, the market is near a bottom.
The Arms Index is a ratio of a ratio. The numerator is the ratio of the number of advancing issues divided by the number of declining issues. The denominator is the advancing volume divided by declining volume. On an intraday basis, a very high Arms Index reading is positive, while a very low reading is negative. The Arms Index is a contrary indicator that trends in the opposite direction of the market.
TICK measures the difference between the number of stocks trading on an uptick versus the number trading on a downtick.
A rising TICK indicator and falling Arms Index (TRIN) are positive, while a falling TICK indicator and a rising Arms Index (TRIN) are negative.
In the "Open" version of the Arms Index (Open Arms), each of the four components in the formula is averaged separately over a period of 10 days.
On the Equivolume chart, each price bar is shown as a rectangle. The height of the rectangle measures the day's trading range. The width of the rectangle is determined by that day's volume.
A CandlePower chart combines equivolume and candlesticks. The width of each candle is determined by volume.
A comparison of the Russell 2000 and the S&P 500 tells us whether the "troops" are following the "generals".
Chapter 19 Pulling It All Together - A Checklist
Technical analysis is much like putting together a giant jigsaw puzzle. Each technical tool holds a piece of the puzzle.
Technical checklist
1. What is the direction of the overall market?
2. What is the direction of the various market sectors?
3. What are the weekly and monthly charts showing?
4. Are the major, intermediate, and minor trends up, down, or sideways?
5. Where are the important support and resistance levels?
6. Where are the important trendlines or channels?
7. Are volume and open interest confirming the price action?
8. Where the 33%, 50%, and 66% retracements?
9. Are there any price gaps and what types are they?
10. Are there any major reversal patterns visible?
11. Are there any continuation patterns visible?
12. What are the price objectives from those patterns?
13. Which way are the moving averages pointing?
14. Are the oscillators overbought or oversold?
15. Are any divergences apparent on the oscillators?
16. Are contrary opinion numbers showing any extremes?
17. What is the Elliot Wave pattern showing?
18. Are there any obvious 3 or 5 ware patterns?
19. What about Fibonacci retracements or projections?
20. Are there any cycle tops or bottoms due?
21. Is the market showing right left translation?
22. Which way is the computer trend moving: up, down, or sideways?
23. What are the point and figure charts or candlesticks showing?
After you've arrived at a bullish or bearish conclusion, ask yourself the following questions.
1. Which way will this market trend over the next several months?
2. Am I going to buy or sell this market?
3. How many units will I trade?
4. How much am I prepared to risk if I'm wrong?
5. What is my profit objective?
6. Where will I enter the market?
7. What type of order will I use?
8. Where will I place my protective stop?
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