About the Contributors p. xiii
Acknowledgments p. xxi
Preface p. xxiii
Swing Trading and Underlying Principles of Technical Analysis p. 1
Influential Thinkers in Technical Analysis p. 2
General Principles of Price Behavior p. 16
A Trend Is More Likely to Continue Than Reverse p. 17
Momentum Precedes Price p. 18
Trends End in a Climax p. 19
The Market Alternates between Range Expansion and Range Contraction p. 20
Creating Swing Charts p. 20
The Three Types of Trades p. 23
Retracements p. 23
Tests p. 25
Breakouts p. 26
Trade Management p. 27
Forecasting Trends Using Intermarket Analysis p. 29
Basic Principles p. 29
Commodities versus Bonds p. 31
CRB Index versus Rates p. 31
Oil versus Rates p. 33
Bonds versus Stocks p. 33
Intermarket Sector Effect p. 35
Transports Hurt By Rising Oil p. 37
Other Sector Influences p. 38
Sector Rotation and the Economy p. 39
REITs Turn Up As Technology Turns Down p. 39
From Biotechs to Drugs p. 41
Commodities as Economic Indicators p. 42
Japan's Effect on U.S. Markets p. 44
The Technical Nature of Intermarket Analysis p. 44
Inverted Yield Curve Implies Weakening p. 46
The Evolving Intermarket Model p. 46
Applying Moving Averages to Point and Figure Charts p. 47
Background of Point and Figure Charting p. 48
Basics of Chart Construction p. 48
Consolidation Zones p. 50
Price Objectives p. 51
Constructing Moving Averages on Point and Figure Charts p. 52
Recognizing the Long Consolidation Breakout Pattern p. 53
Identifying Moving Average Reversals p. 53
Distinguishing between Temporary Pullbacks and Tops p. 57
Advantages of Point and Figure Charts over Bar Charts p. 59
When and How to Use the Technique p. 61
Spotting Early Reversal Signals Using Candle Charts p. 63
Constructing Candle Lines p. 64
Using Individual Candle Lines p. 65
Doji p. 66
Shadows p. 69
Hammers and Shooting Stars p. 70
Engulfing Patterns p. 74
Windows p. 76
Candles and Risk/Reward Considerations p. 78
Reading the Language of the Market with Market Profile p. 81
The Cycle of Equilibrium and Disequilibrium p. 84
Daily Profile Shapes p. 88
Normal Days p. 88
Non-Trend Days p. 89
Normal Variation of a Normal Day p. 91
Trend Days p. 92
Profiles of Equilibrium and Disequilibrium Cycles p. 93
Non-Price Control and Price Control Phases p. 97
The 4[times]4 Formation p. 98
The Four Steps of Market Activity p. 100
Using Market Profile to Create a Buy/Sell Strategy p. 109
Minus Development p. 115
Summary Principles Underlying Market Profile p. 118
Using Oscillators to Predict Trade Opportunities p. 119
Traditional Oscillator Interpretation p. 120
Importance of Duration Analysis vs. Divergence Analysis p. 120
Common Overbought and Oversold Oscillators p. 121
TD Range Expansion Index p. 122
Construction of TD REI p. 123
Using TD REI p. 125
TD DeMarker I p. 128
Construction of TD DeMarker I p. 130
Using TD DeMarker I p. 130
TD DeMarker II p. 133
Construction of TD DeMarker II p. 133
Using TD DeMarker II p. 134
Key Considerations p. 136
Using Cycles for Price Projections p. 137
Basic Steps in Generating Price Projections Using Offset Lines p. 139
Nominal Price Projections and Terminology p. 142
Key Terms and Concepts p. 143
Guidelines for Projecting When Price Extremes Will Occur p. 143
Applying Market Cycle Projections p. 145
When New Projections Are Generated p. 148
Tips on the Success Rate of Projections p. 150
Cycle Projections Are Either Met or Invalidated over Time p. 152
Offsets for Weekly, Daily, and Intraday Cycle Projections p. 156
Preliminary vs. "Confirmed" Projections p. 157
Adding Cycle Price Projections to One's Toolbox p. 161
Trading with the Elliott Wave Theory p. 163
History of Elliott Wave Theory p. 164
Description of Elliott Wave Theory p. 165
Recognizing Wave Characteristics p. 168
Applying Elliott Wave Theory p. 169
Multiple Time Frame Analysis p. 169
From Long-Term Trading to Day Trading: The U.S. Stock Market p. 172
Making Money When Your Analysis Is Wrong p. 182
U.S. Bond Market Example p. 182
Flexibility Is Key p. 184
Fine-Tuning Your Elliott Wave Theory-Based Trading p. 186
Trading Volatility in the Options Market p. 189
Can You Predict the Market? p. 189
Volatility Trading Overview p. 190
Historical Volatility p. 192
Implied Volatility p. 195
Implied Volatility as a Predictor of Actual Volatility p. 197
Spotting Implied Volatility That Is Overvalued or Undervalued p. 200
Volatility Extremes p. 201
Vega p. 205
Trading Volatility p. 207
Establishing a Delta Neutral Position p. 207
Determining Whether Volatility Is Cheap, Expensive, or Neither p. 209
Buying Volatility p. 212
Selling Volatility p. 219
Key Benefits of Volatility Trading p. 223
Enhancing Technical Analysis by Incorporating Sentiment p. 225
Proper Application of Contrary Thinking p. 226
Interrelationships of Sentiment Indicators with Technicals p. 229
Sentiment Measures p. 231
Qualitative Measures p. 232
Quantitative Measures p. 237
Sentiment at Work: A Case Study p. 253
Stock Market Backdrop p. 253
Sector Timing p. 254
Stock Selection p. 255
Results p. 256
Caveats in Using Contrarian Analysis p. 257
Measuring Investor Sentiment in Individual Stocks p. 259
How Investor Sentiment Affects Individual Stocks p. 260
The Basic Rule p. 261
Using the Index p. 263
What Makes the Advisers Too Bullish and Too Bearish? p. 265
Avoiding Pitfalls p. 268
Doing What the Majority Is Not Doing p. 269
Controlling Risk with Money Management Techniques p. 273
The Fixed Fractional Bet p. 274
Place Your Stops, Then Apply the Rules p. 275
Start with Sufficient Capital p. 276
Stay Cool p. 276
Maintain Your Discipline p. 277
Index p. 279