New Thinking in Technical Analysis: Trading Models from the Masters

318 Pages·2000·10.05 MB·English

by  Rick Bensignor

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P raise for
1 New Thinking in Te chnical A n a l y s i s
2
3 Trading
Models
from
the
Masters

4
Edited by Rick Bensignor
5
6
7 “While single chapters can be read as an independent unit, when taken together
8 they form an excellent foundation of the most valued principles of technical
9 a n a l y s i s ,as Bensignor gets this incredible group of experts to describe in detail how they
10 actually do what they do.”
11 Bridge Tr a d e r
12
13 “A straightforward, user- f r i e n d l y, application-rich presentation of market
14 dynamics forecasting, enhanced with more than 170 charts and illustrations.”
15 Technical Analysis of Stocks & Commodities
16
17 “It has been a long time, perhaps a generation, since technical analysis has no longer been
18 considered witchcraft or voodoo. But the evolving and changing nature of the market has
19 forced reconsideration of even the best tools. Rick Bensignor, an outstanding technician
20 himself, has brought together a superlative group of technicians and money man-
21 agers who rely on technical indicators. This book is a must for all investors and traders
22 who are interested in a technical approach to the market.”
23 A L F R E DH. K I N G O N
24 Former Assistant Secretary of the Treasury and Secretary of the Cabinet
25 and former research director and money manager
26
27 “An excellent mix of classic and new concepts in technical analysis. Investors, as
28 well as short-term traders, will find interesting and useful material in this book.”
29 G A I LM. D U D A C K, C M T
30 Managing Director and Chief Equity Strategist
31 UBS Wa r b u r g
32
33 “The recent support for technical trading rules among respected academics makes this
34 a must-read volume. ”
35 W I L L I A ML. S I L B E R, P H.D.
36 Professor of Finance and Economics
37 Stern School of Business, New York University
“Rick Bensignor has gathered together twelve of the top individuals in the field of technical 1
analysis. Their methods and vast experience will open your mind to new opportunities. ” 2
E D WA R DJ. S O L A R I 3
Vice President and Senior Foreign Exchange Advisor 4
BMO Nesbitt Burns 5
6
“A compendium of methodologies from recognized practitioners in technical analysis, N e w 7
T h i n k i n gpresents precise strategy platforms for today’s traders.” 8
9
L O U I S EYA M A D A
Managing Director and head of Technical Research 10
Salomon Smith Barney 11
12
“The increasing importance of technical analysis in the contemporary marketplace is dra- 13
matically highlighted by this new compendium from a dozen top technical analysts. Tr a d i- 14
tional techniques are presented side-by-side with current innovations, giving the reader 15
a broad view of technical analysis. ” 16
J O H NB O L L I N G E R, C FA, C M T 17
President and founder, Bollinger Capital 18
19
“New Thinking in Technical Analysis will someday be viewed as a classic because it 20
opens the eyes of veteran traders to new methods. Rick deserves a lot of credit for having 21
the foresight to put this book together. ” 22
23
B I L LA B R A M S
Former Specialist on the New York Stock Exchange 24
25
“Rick Bensignor has put together a significant new book filled with methodologies from 26
some of the best names in the trading business. ” 27
28
B E N N E T TM O S T E L
Senior Vice President 29
Prudential Securities 30
31
“Baseball legend Yogi Berra once commented, ‘You can observe a lot by just looking.’ Wi t h 32
New Thinking,Rick Bensignor has scored a home run in that the collaborative wisdom of 33
the assembled team offers a valuable insight for new entrants and market veterans alike.” 34
35
J A S O NP E R L
Associate Director and Technical Analyst 36
UBS Warburg (London) 37
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New
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Te ch n i c a l
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A n a l y s i s 16
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New Thinking
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First edition published 2000
9 10
Bensignor, Rick, editor
New thinking in technical analysis: trading models from the masters /edited by Rick Bensignor;
contributing authors, Linda Bradford Raschke . . . [et al.].
p. cm. — (Bloomberg professional library)
Includes index.
ISBN 1-57660-049-1 (alk. paper)
1. Investment analysis. I. Bensignor, Rick. II. Bradford Raschke, Linda. III. Series
HG4529.N49 2000
332.6—dc21 00-057179
CIP

Book Design by LAURIE LOHNE/DESIGN IT COMMUNICATIONS
1
2
3
4
5
6
7
8
Fifty
years
ago
most
investors
suffered
from
a
lack
of
useful
information
and
9
approached
the
stock
market
with
a
certain
fear
because
of
it.
Today
the
investment
10
environment
is
overloaded
with
information,
and
a
major
problem
facing
investors
11
is
sifting
the
useful
from
the
useless.
Another
issue
is
that
good
companies
aren’t
12
always
good
stocks
and
bad
companies
sometimes
are
profitable
investments.
Time
13
is
limited
and
we
are
all
searching
for
a
way
to
understand
complex
material
14
quickly
and
draw
conclusions
from
it.
15
Over
the
years
I
have
found
technical
analysis
helpful
to
me
both
as
an
investor
16
and
as
a
strategist.
It
enables
me
to
grasp
the
psychological
factors
that
are
so
17
important
in
determining
the
market’s
or
a
stock’s
performance.
Rick
Bensignor
18
has
assembled
an
impressive
group
of
expert
practitioners
whose
chapters
will
help
19
both
the
layman
and
the
professional
understand
the
origins,
development,
and
20
current
applications
for
technical
analysis.
It
is
not
sorcery;
it
is
a
valuable
craft.
21
If
you
apply
the
lessons
well,
technical
tools
will
help
you
make
more
money
in
the
22
stock
market
in
good
times
and
limit
your
losses
when
times
get
rough.
23
24
25
B
Y
R
O
NR.
W
I
E
N 26
Chief
U.S.
Investment
Strategist 27
Morgan
Stanley
28
29
30
31
32
33
34
35
36
37
1 Contents
2
3
4
5 About
the
Contributors
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1 SWING TRADING AND UNDERLYING PRINCIPLES OF
10
T E C H N I CAL A NA LY S I S 1
11
12 Linda Bradford Raschke
13 Influential
Thinkers
in
Technical
Analysis.
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14 General
Principles
of
Price
Behavior.
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15
A
Trend
Is
More
Likely
to
Continue
Than
Reverse..........................................................17
16
Momentum
Precedes
Price ................................................................................................18
17
Trends
End
in
a
Climax......................................................................................................19
18
The
Market
Alternates
between
Range
Expansion
and
Range
Contraction ..................20
19
20 Creating
Swing
Charts.
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21 The
Three
Types
of
Trades .
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22 Retracements........................................................................................................................23
23
Tests......................................................................................................................................25
24
Breakouts..............................................................................................................................26
25
Trade
Management.
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26
27
28 2 F O R E CASTING TRENDS USING INTERMARKET A NA LY S I S 29
29 John Murphy
30 Basic
Principles .
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31
Commodities
versus
Bonds ................................................................................................31
32
CRB
Index
versus
Rates ......................................................................................................31
33
Oil
versus
Rates....................................................................................................................33
34
Bonds
versus
Stocks ............................................................................................................33
35
36 Intermarket
Sector
Effect.
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37 Transports
Hurt
By
Rising
Oil............................................................................................37