The Introduction to the Magee System of Technical Analysis

290 Pages·2002·5.23 MB·English

by  W.H.C. Bassetti

THE INTRODUCTION TO THE
M A G E E
SYSTEM
O F T E C H N I C A L
A N A LY S I S
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THE INTRODUCTION TO THE
M A G E E
SYSTEM
O F T E C H N I C A L
A N A L Y S I S
JOHN MAGEE
in a new edition by W.H.C. Bassetti
St. Lucie Press
Boca Raton London New York Washington, D.C.
AMACOM
American Management Association
New York • Atlanta • Boston • Kansas City • San Francisco
Washington, D.C. • Brussels • Mexico City • Tokyo • Toronto
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Library of Congress Cataloging-in-Publication Data
Catalog record is available from the Library of Congress
This book contains information obtained from authentic and highly regarded sources. Reprinted material
is quoted with permission, and sources are indicated. A wide variety of references are listed. Reasonable
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AUTHORS
John Magee (1901–1987), a graduate of MIT and a leading expert on
technical analysis, was the founder of the well-known charting and advi-
sory firm of John Magee, Inc. Magee pioneered the concept of analyzing
the stock market from an engineering point of view and became known
as the Father of Technical Analysis. With Robert Edwards, he coauthored
the best selling book, Technical Analysis of Stock Trends. Now in its 8th
edition, it is considered the definitive work in the field and has more than
one million copies in print.
W. H. C. Bassetti, editor and co-author of this book and the 8th edition
of Technical Analysis of Stock Trends, is an honors graduate of Harvard.
His experience spans the modern history of the markets, beginning as a
student and client of John Magee in the 1960s through the electronic
markets of the present. He was formerly a principal in California’s first
licensed commodity advisor, CEO of Blair Hull’s Options Research, Inc.,
managing partner of a market maker, and president of an options arbitrage
manager. He is presently Adjunct Professor of Finance and Economics at
Golden Gate University, where he teaches technical analysis of stock
trends.
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A SPECIAL
ACKNOWLEDGMENT
Anyone who has engaged in research on issues long dead knows what
a nightmare it is to pursue data on the New Haven, or astoundingly(!)
IBM before 1968. In fact, if IBM has digital data on its stock prices prior
to 1968, I was unable to find it within that corporation (or anywhere else).
On the other hand a veritable treasure trove of old data is kept at M.C.
Horsey and Company Inc., P.O. Box 2597, Salisbury, MD 21802. On hand-
kept ledger cards. M.C. Horsey publishes this data on very long-term
monthly charts in “The Stock Picture.” I am most indebted to them for
use of their IBM data and recommend them to seekers after wisdom and
truth who can’t find it in real time data.
Special appreciation goes to makers of software packages utilized in
preparation of this and previous editions:
AIQ Systems Metastock
P.O. Box 7530 Equis International, Inc.
Incline Village, NV 89452 3950 S. 700 East, Suite 100
702-831-2999 Salt Lake City, UT 84107
www.AIQ.com 800-882-3040
www.equis.com
TradeStation
Omega Research
14257 SW 119th Avenue
Miami, FL 33186
305-485-7599
www.tradestation.com
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ACKNOWLEDGMENTS
First of all, to that irrepressible Maine–iac and distinguished technical
analyst Richard McDermott; surfer of the markets, sometime president of
John Magee Inc., editor of the first edition of this book and delightful
raconteur.
To my invaluable research and editorial assistants, Don Carlos Bassetti y
Doyle and Don Pancho Samuelito Bassetti y Doyle who have contributed
significantly to this edition. Thanks for the Peaches. Also, the fish.
To my publisher at CRC Press, Drew Gierman and his production staff,
especially Pat Roberson, whose professionalism is exemplary, and Michele
Berman, who is an excellent, close reader.
To Blair Hull and his staff for generous and helpful support.
To Professor Hank Pruden of Golden Gate University for many favors
and kindnesses in the preparation of this and other books.
Members of the Market Technicians Association, especially Shelley, Ed
Polokoff, and Jon Knotts at Prophetfinance.com.
And as always, to that modest gentleman, tireless teacher, and master
of the craft, John Magee.
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