Stock Market Charts ( they are easier than you think) Michael Kahn, CMT February 2014.
-
Upload
lorenzo-hitchman -
Category
Documents
-
view
215 -
download
1
Transcript of Stock Market Charts ( they are easier than you think) Michael Kahn, CMT February 2014.
Stock Market Charts(they are easier than you
think)
Michael Kahn, CMTFebruary 2014
Who am I?
Chartered Market Technician (CMT) trained and certified in market
analysis
Columnist – Barron's OnlineNewsletter Editor – Quick Takes ProFormer charting software designer
…and beaten up enough by the markets
What do I do?
Help investors assess risk and reward.
no crystal ballno tea leavesno chicken entrails
Agenda
Just the basicsWhen the market is moving - trendWhen the market is resting - pattern
Other important stuff – volume, sentiment, time
Possible Goals
Get the feel for the market (sentiment, momentum)
What does the market say? Bullish?Manic?
Does the chart agree with the fundamentals?
Or at least not disagree?Intangibles
The FedGurus“Risk on”
Possible Goals
What part of the market is best? (relatives)
Sizebig or small
SectorsDefensive or aggressive?Traditional leaders or not?
Bonds? Gold?Maybe it is time to diversify asset classes
Technical analysis is a windsock, not a crystal ball. - Carl Swenlin
People
People tend to do similar things when faced with similar situations.
People’s behavior is the basis for chart patterns.
The chart is the chart is the chart.
(no analyst guesses and gov’t revisions)
What is Fundamental Analysis?
A method of evaluating a security that entails attempting to measure its intrinsic value by examining related economic, financial and other qualitative and quantitative factors.
-- from the CFA Institute website(and Investopedia)
What is Technical Analysis?
A method of evaluating securities by analyzing statistics generated by market activity.
-- from the Market Technicians Association website
What do they have in common?
Neither one can handle conditions that cause the market to be restricted, manipulated and otherwise not free.
Fraud Mergers Quantitative Easing
Save us Obi Ben Bernanke(sorry Janet)
Dated humor
I will make you a chart you cannot refuse
The Godfather of Technical Analysis
How I cope
Price Rules!
Price - The stuff you put in the bank
In price, there is knowledge.
Alan Shaw, CMT, Chief Technical Analyst.
Smith Barney, retiredRalph Acampora, CMT, Chief Technical Analyst, Prudential
Securities, retired
Volume is next
Volume – How much money is moving
In volume, there is truth.
Dennis Jarrett, Jarrett Research
Momentum
Momentum – How fast it got there
Which speed is profitable and most sustainable?
Structure (Patterns)
Structure – Trends and Patterns
Sentiment (Fear and Greed)
Sentiment
I feel good! Whatever She’s gonna eat us!
Tesla Oct 2013 Electronic Arts Jul 2012
We got game!
Price Volume Momentum Structure Sentiment
Looks like a cheaper place to buy
How many times have you thought, “My stock is on sale, let’s buy!”
Looks like a cheaper place to buy
Same price, different trend……could the same be on tap for 2014?
The trend said it all
It works in both directions.
What does the market have to say?
The trend said it all
It works in long-term time frames at major turning points, too.
Does something look right here?
The Big Picture a few years ago.
And today…
Log scales
Leadership
Changing? Barron’s Online November
Leadership
Changing again?
Leadership
Leadership
It’s the end of the world as we know it. – R.E.M.
Sentiment
Sentiment
Are you the last to be invited to the party?
social media stocks last year? biotech now?
Is your hair stylist giving you tips?
Are they ridiculing the bearish commentators?
Gold is going to $800!!!!!! Or for early 2009, were doom
and gloom forever?
Quiz Time
Question - What does it mean when the neighborhood tavern has CNBC on the television and not ESPN?
Quiz Time
Question - What does it mean when the neighborhood tavern has CNBC on the television and not ESPN?
Answer - the market is not at a bottom
Quiz Time
Question - What does it mean when the banks are offering new interest only mortgages?
Quiz Time
Question - What does it mean when the banks are offering new interest only mortgages?
Answer – the real estate market is not at a bottom……(sound familiar?)
Quiz Time
Question - What does it mean when there are whole aisles in the supermarket dedicated to the Atkins diet?
Quiz Time
Question - What does it mean when there are whole aisles in the supermarket dedicated to the Atkins diet?
Answer – time to buy bread and cereal stocks
Question - What does it mean when everyone is talking about the Great Depression and Financial Armageddon?
Quiz Time
Quiz Time
Question - What does it mean when everyone is talking about the Great Depression and Financial Armageddon?
Answer – It’s March 2009!
The AAII survey showed 70.27% bears on March 5. Unprecedented. And it was not the only one.
Quiz Time
Question – What does it mean when, after a five-year bull market, mutual fund company advertisements show regular people saying “we’ve got to get back into the market?”
Quiz Time
Question – What does it mean when, after a five-year bull market, mutual fund company advertisements show regular people saying “we’ve got to get back into the market?
Somebody is about to get burned again.
Up is good, down is bad.
Nice long-term base
What do you see?
How about this?
or this?
There was no need to lose it all.
There was no need to lose it all.
real trading!
If you don’t see anything, it’s not there.
If you don’t see anything, it’s not there.
Get it?
Up is good, down is bad.
Up is good, down is bad.
Up is good, down is bad.
The Real World Right Now
The Real World Right Now
Double top, bear reversal
Up is good,
Down is Bad
The real reason we do this:
To make the buy, sell or hold decision.
Not to predict the future
The Big Question
Does market analysis work anymore?
Yes! (mostly)
The Real World Right Now
Profitable Trading. Written up on the breakout. Failed this week
The Real World Right Now
Does Mikey like it?
The Real World Right Now
Does Mikey like it?
The Real World Right Now
Does Mikey like it?
The Real World Right Now
Does Mikey like it?
The Real World Right Now
The Real World Right Now
Mmmm, dividends
The Real World Right Now
End with some laughs
An ode to Quantitative Easing
Ben Lightyear.
QE to infinity and beyond!
Have another shot of Bernanke juice.
Ben Bernanke as a child
Quick Takes Prowww.QuickTakesPro.com
Getting Technical www.Barrons.comTwitter @mnkahn
Books:Beginner’s Guide to Charting Financial
Markets Copies available right
hereTechnical Analysis: Plain and Simple – 3nd
editionReal World Technical Analysis
Free Chart of the DayNo obligation………No spam……….
Sign up at the website www.QuickTakesPro.com
Conference Special on full newsletter
Sign up at the website www.QuickTakesPro.com
$10 for the first month (regular price thereafter) No further obligation, cancel any time
Twitter @mnkahn