Market breadth indicators are based on the number of stocks going up or down and the Advance-Decline (A-D) Line is the simplest way to measure breadth. Every day, the number of stocks that closed higher (advancing… Read More

Markets move in cycles of varying lengths. Some indicators, like the relative strength index (RSI), are based on that idea. RSI was designed by J. Welles Wilder for the commodity markets and some traders believe that commodities… Read More

Markets move in cycles of varying lengths. Some indicators, like the relative strength index (RSI), are based on that idea. RSI was designed by J. Welles Wilder for the commodity markets and some traders believe that commodities move in line with a 28-day cycle. In fact, some traders, including Wilder, believed that the phase of the moon had a large effect on commodity market prices. Default values for calculating RSI are set to 14 days, one-half of the cycle length or… Read More

Markets move in cycles of varying lengths. Some indicators, like the relative strength index (RSI), are based on that idea. RSI was designed by J. Welles Wilder for the commodity markets and some traders believe that commodities move in line with a 28-day cycle. In fact, some traders, including Wilder, believed that the phase of the moon had a large effect on commodity market prices. Default values for calculating RSI are set to 14 days, one-half of the cycle length or about one-half the length of a lunar month.#-ad_banner-# I’m not convinced a lunar calendar can help anyone time trades, but the idea of cycle analysis does make sense. In particular, there is a business cycle where the economy alternates between contraction and expansion. This cycle varies in length but averages about four years. Martin Pring recognized the importance of considering several cycles and developed an indicator he called Know Sure Thing (KST) to look at short-term, intermediate-term and long-term cycles.  “I’ve learned after all my years trading… Read More

The stock market consolidated its gains last week while waiting for news. Earnings announcements this week could push prices out of their two-week trading range. Traders… Read More

The CBOE Volatility Index (VIX) is a widely followed sentiment indicator. When VIX is high, it indicates that traders are worried about… Read More

Market prices move in trends and traders can make, and more importantly, keep large profits if they are on the right side of the trend. Keeping profits requires investors to move out of markets that are falling and switch to… Read More

Over the years, technical analysts have developed a number of indicators to help them identify market turning points. One of the most popular is the relative strength index (RSI). Like most indicators,… Read More

While there are hundreds of technical indicators available, many of them give the same signals, and using several that are similar adds little value to your analysis process. The wide variety of indicators may disguise the reality that most indicators simply apply different mathematical techniques to closing prices in their… Read More

Occasionally, I sort stocks by price-to-earnings (P/E) ratios looking for trading opportunities. This idea is well-known to value investors who often start their investment selection process with low P/E stocks.#-ad_banner-# I think it… Read More

Stock market volatility has fallen to a six-month low, and an increase in volatility should be expected. As volatility expands, we should learn the direction of the next major trend. Volatility Contraction Points to a Big Move Prices ended last week… Read More