Mastering the Stock Market: High Probability Market Timing and Stock Selection Tools

306 Pages·2013·51.732 MB·English

by  John L. Person

Mastering
the Stock
Market
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Mastering
the Stock
Market
High Probability Market
Timing & Stock
Selection Tools
JOHN L. PERSON
John Wiley & Sons, Inc
Cover image: Paul McCarthy
Cover design: © iStockphoto/blackred
Copyright © 2013 by John L. Person. All rights reserved.
Published by John Wiley & Sons, Inc., Hoboken, New Jersey.
Published simultaneously in Canada.
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Library of Congress Cataloging-in-Publication Data:
Person, John L.
The master stock trader : timing techniques to profit from seasonal & sector analysis /
John L. Person.
p. cm.
Includes index.
ISBN 978-1-118-34348-7 (cloth); ISBN 978-1-118-41659-4 (ebk);
ISBN 978-1-118-43417-8 (ebk); ISBN 978-1-118-42054-6 (ebk)
1. Stocks—Charts, diagrams, etc. 2. Investment analysis. I. Title.
HG4638.P474 2013
332.63’2042—dc23
2012026739
Printed in the United States of America.
10 9 8 7 6 5 4 3 2 1
To my loving wife Mary, my best friend and supporter.

Contents
Foreword x
Introduction xi
Chapter 1: Stock Indexes and Sectors 1
Stock-Picking Quandary 4
Exchange-Traded Funds 6
The Options Market 14
Why Use Seasonal Analysis? 18
Chapter 2: Seasonal analysis 21
Pondering the Perks 25
Not All ETFs Are Measured Equally 30
Conclusion 58
Chapter 3: Sentiment analysis 59
The AAII Sentiment Survey 60
COT Data 61
Insider Trading Information 62
COT Data Components 63
Can Traders Benefi t and Make Money from This Information? 64
How Can This Information Possibly Be of Any Help to Us? 68
Compelling Evidence 75
Conclusion: COT Option Strategy 76
Chapter 4: Comparative relative Strength 79
What Is It Used For? 79
vii
viii Contents
Creating the Charts 80
Spread Terminology 87
Automating Signals 95
Comparing Market Performance 99
Conclusion 102
Chapter 5: Breadth Studies 105
Trend-Line Analysis 107
Bearish Divergence Signals 114
Bullish Convergence Signals 119
Support and Resistance 121
Indicators and Moving Averages 125
Conclusion 135
Chapter 6: Volume analysis 137
Hindsight Is 20/20 145
Current Event Analysis 148
Individual Stocks 149
Bearish Divergence 152
Bullish Convergence 154
Selling Climax 155
Exhaustion Tops 156
Trading Patterns 157
Volume and High-Frequency Traders 161
Volume Weighted Average Price 162
Chapter 7: patterns, Indicators, and Oscillators 165
Candlesticks 166
The Doji 168
Reversal Patterns 169
Continuation Patterns 180
Conclusion: Indicator 101 201
Chapter 8: Scanning for profits 203
Scanning the Universe 204