Posts filed under “Trading”
I wish I could find a public link for this:
Merrill Lynch just put out a very cool 60 page “primer” on Technical Analysis. It covers the core concepts behind technicals, including Trends, Relative Price Analysis, Price Momentum Indicators, Reversals, The importance of volume, Support and Resistance, Market Breadth
Market Sentiment, The Fibonacci Concept, and Putting it all together.
Of course, you could always go out and buy Edwards & Magee’s Technical Analysis of Stock Trends, but you get a very different read from practitioners working at a major wire house.
I have my own PDF (which I cannot post to Scribd for work product/copyright reasons), but if anyone knows of a public link, please share!
Primer: A handbook of the basics
Market Analysis Technical Handbook
Stephen Suttmeier, CFA, CMT; Jue Xiong, CFA; MacNeil Curry, CFA, CMT
We cover the basics of Trend, Momentum and other technical indicators and
Market Analysis | United States
Merrill Lynch 14 May 2013
1/2 second of trading activity in Johnson & Johnson (symbol JNJ) on May 2, 2013
Published on May 3, 2013
“The bottom box (SIP) shows the National Best Bid and Offer. Watch how much it changes in the blink of an eye.
Watch High Frequency Traders (HFT) at the millisecond level jam thousands of quotes in the stock of Johnson and Johnson (JNJ) through our financial networks on May 2, 2013. Video shows 1/2 second of time. If any of the connections are not running perfectly, High Frequency Traders can profit from the price discrepancies that result. There is no economic justification for this abusive behavior.
Each box represents one exchange. The SIP (CQS in this case) is the box at 6 o’clock. It shows the National Best Bid/Offer. Watch how much it changes in a fraction of a second. The shapes represent quote changes which are the result of a change to the top of the book at each exchange. The time at the bottom of the screen is Eastern Time HH:MM:SS:mmm (mmm = millisecond). We slow time down so you can see what goes on at the millisecond level. A millisecond (ms) is 1/1000th of a second.
Note how every exchange must process every quote from the others — for proper trade through price protection. This complex web of technology must run flawlessly every millisecond of the trading day, or arbitrage (HFT profit) opportunities will appear. It is easy for HFTs to cause delays in one or more of the connections between each exchange.”
How Twitter is becoming your first source of investment news By Barry Ritholtz, Washington Post April 21 2013 On Monday afternoon at 2:56 p.m., three hours after the fastest runner of the Boston Marathon crossed the finish line, my Twitter feed lit up. Someone in the office yelled “Two explosions at the Boston Marathon,…Read More
“We are in the business of making mistakes. The only difference between the winners and the losers is that the winners make small mistakes, while the losers make big mistakes.” -Ned Davis “More than anything else, what differentiates people who live up to their potential from those who don’t is a willingness to look…Read More
I am fascinated by the pushback to the Goldbuggery post. It has provided an enjoyable and intriguing glimpse into the minds of a certain type of investor. The thought process of undisciplined traders, the people who invest based on a narrative is amazing (and a little sad). Our story thus far: On April 9th, I…Read More
Is it possible that a company that grew to be the dominant axe in Technology, became the largest capitalization firm in the world, and created many new categories of products, is still misunderstood by Wall Street and the Financial Press? The short answer is yes. Apple (AAPL) remains an enigma to much of the Street….Read More
Why Is Gold Crashing?
Gold has fallen off a cliff. It has fallen faster than at any time in the last 30 years.
Zero Hedge notes:
Adding insult to injury, the Shanghai Gold Exchange overnight announced that following the tumbling precious metal prices and limit down drop in early trading, it may raise trading margins for its gold and silver forward contracts.
(Margin calls tend to trigger further selling.)
Some Say It Is a Good Time to Buy
While most financial advisers are screaming “sell!”, there are some well-known contrarians.
For example, Bill Gross still recommends buying gold.
Marc Faber says:
“I love the fact that gold is finally breaking down because that will offer an excellent buying opportunity” …. “The bull market in gold is not completed.”
John Hathaway of Tocqueville Funds (with $10 billion under management) says that the selloff in gold is “a contrarian’s dream scenario”:
The evidence shows strong macro fundamentals for gold, investor sentiment at a negative extreme and compelling valuations in the mining shares. It seems like a contrarian’s dream scenario to us.
And Zero Hedge notes that – from the perspective of technical analysis – gold is the most oversold it has been in 14 years.
The Bearish Explanation
But why has gold crashed?
- “Optimism that a U.S. recovery will curb the need for stimulus”; and
- “The prospect that beleaguered members of the euro zone might be forced to sell gold to raise part of the funding, and there are much bigger holders in that category than Cyprus.”