Technical Analysis and Charting

Top 67. Mar 24, 1999 4:15 PM

» TONYBRIG - h&h

Dan

Does it mean that the chartist after completing
the H&H formation expects it to fall? If it
breaks support or the other shoulder?
And does the chartist consider the general market
or an independent factor?
What kind of STATS are available out there as far
as predicability.........percentages??

V.B.O.L.H.H.

-- posted by TONYBRIG

Top 68. Mar 25, 1999 8:05 AM

» DanG_6 - H&S

Tony: A head-and-shoulders is a bearish chart pattern to a chartist if the final downthrust of the right shoulder closes 3% below the "neckline" (the line drawn across the bottoms of the 2 shoulders and the head). The 3% is suggested by Magee for individual stocks, but if I remember correctly, for indices only 1% is required. To an "academic" a head-and-shoulders is totally meaningless, as their studies have shown very little or no predictability for chart patterns. They could be right, but I have never examined any specific study in detail to see if the patterns they based their conclusions on would actually be considered the patterns a chartist's eye would see when looking at a price and volume bar chart. Remember that the academics told us for decades that small caps outperformed large caps in the long run. Then just recently another ivory tower chap said the original study was flawed as it used a faulty data base. So you pays your money and takes your choice. Personally I don't use chart patterns by themselves as having predictive value, but when accompanied by extreme high valuation and a quick speculative run-up in price far above what would be considered "normal" from past chart history, then a head-and-shoulders makes me take notice. Do they always work? Of course not. But what does? They have saved me from disaster more than once, so I will continue to use them in spite of studies to the contrary.
- Dan

-- posted by DanG_6

Top 69. Mar 25, 1999 8:21 AM

» KirkL - H&S, EMH and Small Caps Debunked

What made the H&S pattern interesting is how close it resembled a "perfect example" and will be a good, fun thing to watch to see if anything developes.

re the Dan's statement: " Remember that the academics told us for decades that small caps outperformed large caps in the long run. Then just recently another ivory tower chap said the original study was flawed as it used a faulty data base.

Dan is 100% right. I full dissection and explanation of why it is wrong is given in my favorite investment book

The last chapter and much of the whole book also makes toast of the EMH which is only accurate in the very large sense, but inefficiencies and wrong interpretation of data is always there for us to profit from.

<img src=http://www.amazon.com/covers/0/68/481/350/0684813505.m.gif height="140" width="92">	Contrarian Investment Strategies : The Next Generation: Beat the Market by Going Against the Crowd by David N. Dreman: Click picture to order
	Review All stock-market investors embrace the motto "Buy low, sell high." Few act accordingly. This book teaches you how. Your job is to execute!

…

-- posted by KirkL

Top 70. Mar 26, 1999 7:34 AM

» DanG_6 - Applying Dreman

Kirk:
I too enjoyed David Dreman's original book "Contrarian Investment Strategy" (1979), but haven't read the new edition. I remember trying to apply the strategy way back when (before I had a PC), going down the nearly 2000 stock listings in the WSJ searching for the low PE stocks. That was tough sledding and probably the biggest reason I gave up. But now that we have computer power, it should be much easier to sort large lists of stocks for low PEs. Do you or anyone know of a good source of reasonably priced data with which to accomplish this? (I know I could subscribe to the on-line version of Value Line and run a PE screen on their 1700 stocks, but they want an arm and a leg for that service.) Any other suggestions of sites or services that would do the job would be greatly appreciated.
- Dan

-- posted by DanG_6

Top 71. Mar 26, 1999 8:42 AM

» KirkL - Website

Dan
Fidelity at http://stocks.fidelity.com/index.shtml lets you screen stocks for p/e and many other things like Market Cap, div yield, eps growth, etc.

You'll have to nagigate over to the "Stock Evaluation" sectin as my direct links all have my name inside them.

Kirk

-- posted by KirkL

Top 72. Mar 26, 1999 10:32 AM

» DanG_6 - Stock Screen

Kirk: Thanks for that Fidelity Site. It does require one to have an account in order to use the stock screen feature, but that got me to digging into my own broker's site (Jack White). There I found a similar feature, so I'm now a happy camper! Thanks again.
- Dan

-- posted by DanG_6

Top 73. Mar 26, 1999 4:25 PM

» TONYBRIG - Thanks Dan

I got it!
What I was trying to figure out tho was
if any STATS were published as far as the
percentage of this pattern working.
As so much is made about stochastics etc.
I would like to see the probabilities. It may
give one a better idea.
Of course if things change then it has to be
chucked in my opinion.
So much talk is made of the A/D line that many]
BEARS use this as a basis for a correction.
Yet is has been going on for a long time.
If the A/D line improves to the Bull side then
what? Another huge Bull-Run?

BOLHH

-- posted by TONYBRIG

Top 74. Mar 26, 1999 6:44 PM

» KirkL - A/D debunked once and for all

Consider all stocks in the market go to a penny except for BOWG where all money drives it to $1E23

A/D line would be terrible.

Me... I would sell BOWG then and buy ANY of the other stocks since they only have one direction to go.... especially if they are delivering earnings that I can buy for a penney.

You can construct many examples either way...

10 companies make money, 9000 lose money get current A/D line.

Now consider these 10 get so pricey that they really don't make money (pay $130 for $0.22 earnings like AOL) and you can buy $2 of earnings for $30 everywhere else.... eventually the A/D will turn.

-- posted by KirkL

Top 75. Mar 26, 1999 7:18 PM

» Mike_8 - Stock Searching

Dan G... you may also want to check out http://powerinvestor.com

They offer software and a yearly subscription for internet downloads for about $90.00. This software will search for Pe along with many other categories.

They also have a program called Power Tech that will do Technical Analysis on different stocks. That is being given away free with Power Investor subscription.

-- posted by Mike_8