Chart Interpretation


Hindenburg Omen Chart for Dec. 4 CNBC Interview


AAPL MSFT & POMO Charts for Feb 27th CNBC interview


Apple, RCA & MSFT Charts for CNBC Segment


More on How NOT To Use Indicators

The assault on technical analysis continues, from people who do not understand it and do not care to take time to learn how to do things properly.  I wrote previously about a blogger who likes to write dismissive articles about technical… more

Short Term Price Oscillator

end of closing price minus a 5% Trend (also known as a 19-day EMA minus a 39-day EMA).  For the STPO, we use a 50% and 20% Trend.   The 50% Trend is a very fast EMA, with a 50% smoothing… more

Tom’s Tool Box

Every technician needs to have more than one tool in his toolbox. This is because some tools only work in certain types of markets, and every technical indicator will be wrong some of the time. So it is useful to follow… more

20/40-Week Cycle Phase Shift

My understanding is that the software you are using assumes that the subject cycles always exist, albeit with some variability in their actual timing, and does not account for wholesale behavior changes like the phase shift hypothesis I put forward. It… more

Is There a 40.68-month Cycle?

The Foundation for the Study of Cycles (FSC) has done a lot of work with that cycle over the years.  Some other people contend that more recently the period has averaged 38-39 months. My own analysis of it has convinced me… more

Nature of the Linear Progression Across the Liquidity Spectrum

Please allow me the license to restate your question, the better to provide an answer to it.What I believe you are asking is whether the "physics" that describe the movements of prices in one market are the same as in other… more

Rydex Asset Numbers

We were among the earliest adopters of using Rydex fund asset levels as a sentiment indicator.  The first person we are aware of to start doing this was Steve Todd, of the Todd Market Forecast (see also our article on "The… more

Fibo Retracement Phenomenon

This is an excellent question, and I have read about a couple of those studies you mention, one which used several decades of DJIA history to look for evidence that Fibonacci retracement levels showed importance for the DJIA's movements.  One study… more

“Is you is, or is you ain’t, in an uptrend?”

Many years ago, I did a combined speaking engagement with fellow newsletter writers Steve Todd (The Todd Market Forecast) and Peter Mauthe before an AAII group in San Diego.  During the Q&A, someone asked each of us to identify our favorite… more

40-Week Cycle Length

It is a confusing piece of language that is responsible for the conflict, and you are justified in being confused about this. What we refer to as the 40-week cycle is not necessarily exactly 40 weeks in length.  It is also… more

New Use for Correlation Coefficients

Attached is a chart showing a fairly new indicator I developed.   I don't know if anyone else has ever thought of doing this before. To construct it, I first calculate the 50-day correlation coefficient of each of the 30 Dow stocks… more

Is a January Decline Bearish? (20/40-week Cycle)

I would like to share a chart that may put the market's recent dip into better perspective.  The lower indicator in this attached chart shows a representation of the composite 20/40-week cycle.  The 40-week cycle is also known as the 9-month… more

Oscillator Breaking Zero

There are several different issues simultaneously wrapped up in your question, and I will try to address a few of them. First, taking the Oscillator down to zero is not that hard to do under the current conditions (high Summation Index). … more

Fishhook Rules

This is an excellent question you pose.  I am not sure I can definitively provide all of the rules to the standard of testibility, but here goes. A fishhook formation is named because of the shape of the indicator as it… more

Trend Line Touch points

Great question.  My position is that for certain purposes, your thesis about a broken line being invalidated is a proper one.  What I have seen in my own studies, though, is that broken lines can be subsequently reestablished as valid even… more