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Technical Analysis: Power Tools for Active Investors

Book Description

Unlike most technical analysis books, Gerald Appel's Practical Power Tools! offers step-by-step instructions virtually any investor can use to achieve breakthrough success in the market. Appel illuminates a wide range of strategies and timing models, demystifying even advanced technical analysis the first time. Among the models he covers: NASDAQ/NYSE Relative Strength, 3-5 Year Treasury Notes, Triple Momentum, Seasonality, Breadth-Thrust Impulse, and models based on the revolutionary MACD techniques he personally invented. Appel covers momentum and trend of price movement, time and calendar cycles, predictive chart patterns, relative strength, analysis of internal vs. external markets, market breadth, moving averages, trading channels, overbought/oversold indicators, Trin, VIX, major term buy signals, major term sell signals, moving average trading channels, stock market synergy, and much more. He presents techniques for short-, intermediate-, and long-term investors, and even for mutual fund investors.

Table of Contents

  1. Copyright
  2. Financial Times Prentice Hall
  3. Financial Times Prentice Hall Books
  4. Foreword
  5. Acknowledgments
  6. About the Author
  7. Introduction
  8. The No-Frills Investment Strategy
    1. Part I: Picking the Right Investment Vehicles
    2. Risk: Reward Comparisons Between More Volatile and Less Volatile Equity Mutual Fund Portfolios
    3. Drawdown: The Measure of Ultimate Risk
    4. The End Result: Less Is More
    5. Changing Your Bets While the Race Is Still Underway
    6. Relative Strength Investing
    7. Increasing the Risk: Maintaining a Portfolio of Somewhat More Aggressive Mutual Funds
    8. Upping the Ante: The Effects of Applying the Concepts of Relative Strength Selection to a Still More Volatile Portfolio of Mutual Funds
    9. A Quick Review of Relative Strength Investing
    10. Summing Up
  9. Two Quick-and-Dirty Stock Market Mood Indicators
    1. Identifying High- and Low-Risk Investment Climates
    2. The Nasdaq/New York Stock Exchange Index Relative Strength Indicator
    3. Measuring the Market Mood with the Intermediate Monetary Filter
    4. The Monetary Model
    5. Combining the Two Indicators
    6. Summing Up
  10. Moving Averages and Rates of Change: Tracking Trend and Momentum
    1. The Purpose of Moving Averages
    2. Moving Averages: Myths and Misconceptions
    3. Using Moving Averages to Identify the Four Stages of the Market Cycle
    4. The Rate of Change Indicator: How to Measure and Analyze the Momentum of the Stock Market
    5. The Triple Momentum Nasdaq Index Trading Model
    6. Rate of Change Patterns and the Four Stages of the Stock Market Cycle
  11. More Than Just Pretty Pictures: Power Tool Chart Patterns
    1. The Concept of Synergy
    2. Powerful Chart Formations
    3. The Wedge Formation: Times to Accumulate and Times to Distribute Stocks
    4. Synergy in Chart Patterns
    5. Head and Shoulder Formations
    6. Support and Resistance Levels
    7. Tricks with Trendlines
    8. Channel Support and Resistance
    9. False Breakouts and Breakdowns: Key Market Patterns
  12. Political, Seasonal, and Time Cycles: Riding the Tides of Market Wave Movements
    1. Calendar-Based Cycles in the Stock Market
    2. Time Cycles: Four Days to Four Years
    3. Segments of Market Cycles
    4. Lengths of Market Cycles
    5. The 18-Month Market Cycle with a Rate of Change Confirming Indicator
    6. T-Formation: The Ultimate Cyclical Power Tool?
    7. In Summary
  13. Bottom Fishing, Top Spotting, Staying the Course: Power Tools That Combine Momentum Oscillators with Market Breadth Measurements for Improved Market Timing
    1. A Quick Review of Where We Have Been
    2. The “Internal” as Opposed to the “External” Stock Market
    3. Measures of Market Breadth
    4. The New York Stock Exchange Advance-Decline Line
    5. Breadth Patterns at Bull Market Highs
    6. Using a Somewhat More Sensitive Rate of Change Measure of the Advance-Decline Line
    7. The Weekly Impulse Continuation Signal
    8. The Weekly Impulse Signal
    9. The Daily-Based Breadth Impulse Signal
  14. Volume Extremes, Volatility, and VIX: Recognizing Climactic Levels and Buying Opportunities at Market Low Points
    1. Market Tops: Calm Before the Storm; Market Bottoms: Storm Before the Calm
    2. TRIN: An All-Purpose Market Mood Indicator
    3. The Volatility Index (VIX) and Significant Stock Market Buying Zones
    4. The Major Reversal Volatility Model
  15. Advanced Moving Average Convergence-Divergence (MACD): The Ultimate Market Timing Indicator?
    1. Scope of Discussion
    2. The Basic Construction of the Moving Average Convergence-Divergence Indicator
    3. Using Divergences to Recognize the Most Reliable Signals
    4. Improving MACD Signals by Using Different MACD Combinations for Buying and Selling
    5. Synergy: MACD Confirmed by Other Technical Tools
    6. MACD Through the Years: Long Term, Short Term, and Intraday
    7. The Amazing Ability of the MACD to Identify Significant Market Low Points Following Severe Stock Market Declines
    8. MACD and the Four Stages of the Market Cycle
    9. Reviewing Rules and Procedures Associated with the MACD Indicator
    10. Converting the Daily Breadth Thrust Model into an Intermediate Entry
  16. Moving Average Trading Channels: Using Yesterday’s Action to Call Tomorrow’s Turns
    1. The Basic Ingredients of the Moving Average Trading Channel
    2. Moving Average Trading Channels in Operation
    3. The Evolution of Phases Within the Moving Average Trading Channel
    4. Moving Average Channels and the Major Trend
    5. How to Construct a Price/Moving Average Differential Oscillator
    6. A Review of the Key Rules Associated with Moving Average Trading Band Trading
  17. Putting It All Together: Organizing Your Market Strategies
    1. The First Step: Define the Major Trend and Major Term Cycles of the Stock Market
    2. The Second Step: Check Out Market Mood Indicators and Seasonal Cycles
    3. The Third Step: Establish the Direction and Strength of the Current Intermediate Trend and Try to Project the Time and Place of the Next Intermediate-Term Reversal Area
    4. The Fourth Step: Fine-Tune Your Intermediate-Term Studies with Studies Based on Shorter-Term Daily—or Even Hourly—Market Readings
    5. Lessons I Have Learned During 40 Years as a Trader
    6. Recommended Reading and Resources
  18. Index