Technical Analysis classroom

May 7, 2014

This is a discussion topic or guest posting submitted by a Stock Gumshoe reader. The content has not been edited or reviewed by Stock Gumshoe, and any opinions expressed are those of the author alone.

This thread came about due to a request for more technical analysis info. Its to be hoped that even old dogs can learn new tricks. Certainly they can teach us puppies how to yap!
Enjoy.

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71 Comments on " Technical Analysis classroom"

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Alan Harris
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Alan Harris
May 7, 2014 6:24 pm

So? Whats a moving average and whats the difference between that and an EMA?

sheryl2725
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sheryl2725
May 7, 2014 7:02 pm

Logged in

hipockets
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May 8, 2014 1:29 am

Thanks for starting this thread, Alan. I will try to help on the simple things.

lesbaker
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lesbaker
May 8, 2014 4:09 am

Thanks Alan

Eddy9
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Eddy9
May 8, 2014 5:48 am

Merci Alan for starting this new thread.

tennisplayer2
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tennisplayer2
May 8, 2014 6:59 am
blinddaytrader
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blinddaytrader
May 8, 2014 4:14 pm
Really have to second the pointer to those Investopedia articles (there’s a series) on moving averages (EMAs, SMAs, and other kinds). Best stuff you’re likely to find for getting a full picture in a short time,.. When I was writing my own functions for generating moving averages in a private analysis system I put together, I read a large quantity of stuff that’s out there on creating MAs, and Investopedia puts a lot of knowledge in an accessible compact place. If you do want to roll your own for some strange reason (yeah, I admit it: I’m strange), or just… Read more »
Alan Harris
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Alan Harris
May 8, 2014 4:39 pm

Yeah…. but is an MA really of any significance in terms of me making money? Certainly it cn be drawn on a graph….so can my body temperature, and investopedia will tell you what an MA means. But is it just another line on my forehead. Why/is it useful?

bwd1up
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bwd1up
May 8, 2014 8:15 am

Thanks Allan

Warner
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Warner
May 8, 2014 10:10 am

log, Thanks Allan

justirregular
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May 8, 2014 11:28 am

Just checking in. Thanks Alan!

Alan Harris
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Alan Harris
May 8, 2014 4:56 pm

WTF is Fibonacci…..RSI…etc ? Yes I can get the answers from Investopidia….but will they definitely help me to make money?

Margaret Kittelson
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May 9, 2014 2:53 am
Alan – When I’m deciding what stock to buy, I rely strongly on the trend-line pattern. Right now, a lot of stocks appear to be right at the edge of forming my favorite pattern. This pattern forms when a trend-line has fallen down a long hill into a low valley, then starts to climb up the next hill. The problem is….the stocks are camped out in the valley, sound asleep in their tents I think. So I’m waiting for a few of them to start hiking up that next hill. Positive action will be my signal to buy. The other… Read more »
Alan Harris
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Alan Harris
May 9, 2014 4:48 am
Thanks Margaret. I recently posted to the weight loss thread: ‘The golden rule offered by all the great investors is ‘Timing is everything’. Beni was originally recco’ed here at $0.68; it shot up to $2; now its $1.’ Has that movement changed the science one iota??? Of course not. Would you be worried about that $1 price if you had bought at 0.68? Nope!! Would you be bricking it if you bought at $2? Yep!!! So my advice to anyone with IBS is not to doubt/research the science (coz yourll never truly understand the minutia). Either accept that there are… Read more »
bwd1up
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bwd1up
May 9, 2014 2:08 pm

test, not getting email

hipockets
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May 9, 2014 8:00 pm
On another thread, Clomu asked about the validity of technical analysis (candlesticks, specifically, I think). Alan, our CEO, asked me to copy it to this thread, so here it is. Maybe I’ll get a raise! :>) =========================================== As so many people have asked about so many experts, “If he is so good, why ain’t he rich?” My understanding about any school of technical analysis is that (a) It tries to give a pictorial indication of the overall sentiment about a stock ( or a sector or the market ) of all investors at the present moment; (b), At best, the… Read more »
Alan Harris
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Alan Harris
May 9, 2014 8:49 pm

Completely off topic: I have been suffering all sorts of spyware/malware recently and spent hours and hours trying to rid myself of the nuisance. I tried 3 anti spyware progs, to no avail. So I complained and they sent these FREE links. Suddenly they are all gone and my computer is running like the day bought it. The load/download speed is amazing, my fan is quiet and the machine is no longer overheating….OH JOY!!
Of course you must do your own DD before trying, but its worked for me. Hope it does for you too. Do EXACTLY what is says.
AH
http://malwaretips.com/blogs/domaiq-virus-removal/
http://malwaretips.com/blogs/pup-optional-amonetize-virus/

Leo S
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Leo S
May 9, 2014 9:08 pm

Looks OK Alan, but how do these guys get paid?

Alan Harris
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Alan Harris
May 9, 2014 9:10 pm

if youre not paying, why worry?

Leo S
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Leo S
May 9, 2014 9:22 pm

The point being: “Free” on the internet is a red flag to me. I hope your trust is justified and your computer stays “fixed”. Regards, and thanks for all you do.

Alan Harris
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Alan Harris
May 9, 2014 9:34 pm

Theres a pro version too…so pay if it makes you feel better.?

Alan Harris
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Alan Harris
May 9, 2014 10:25 pm

All I can tell you is that I used the free version, and it worked wonders. Your call…..no guarantees.

Elliot
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June 11, 2014 2:06 pm

Alan, this seems like a strange post. It sounds like a spam message (as if your account was hacked and someone was using it to post spam).

hipockets
Irregular
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May 9, 2014 8:57 pm
On another recent post, Alan mentioned the American Bulls (AB for short) — http://www.americanbulls.com/. It provides free daily candlestick charts on almost all U.S. stocks and many foreign ones, and it has websites for stocks in other countries. In addition to the charts, it makes daily intra-day buy and sell recommendations based on its charts. Alan had mentioned it a few months ago, and I spent hundreds of hours working with it. A big positive for candlesticks is that the chart presents much more information than a simple line chart. A big negative is that one has to learn the… Read more »
greenfire67
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May 11, 2014 2:47 pm

Sorry, I’m behind a little. Spring is busy time.
Instead of trying to explain with text, videos work wonders. I follow Eric Muathe on SA and for free, this is great educational material. I may post random sources of info which I find helpful. Watch how Eric, Joseph Hentges, and others analyze charts;

https://www.youtube.com/watch?v=r-OC2i5pSFs
http://seekingalpha.com/author/eric-muathe

https://www.youtube.com/watch?v=z4TDQHuExy0&list=TLWH1bU2r8ZnvqGOdgud9y2GhFdWS_JI7k

http://seekingalpha.com/article/2188703-where-is-the-market-headed-now-leveraged-etfs-tell-the-story

Alan Harris
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Alan Harris
May 11, 2014 7:37 pm
Im truly sorry, but I think youre wrong. I (we all) are privy to a zillion internet videos/sites that can teach us. But life is too short to watch a zillion. What I want to know is that YOU invested n hours in watching/considering this stuff, and this is what you came away with. The alternative is for 336 of us to watch the same video. Then whats the purpose of this thread? We learn from each others experiences…we have 1000 eyes and ears. If we gain just one nugget from each members research, that saves us all reading that… Read more »
greenfire67
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May 13, 2014 10:17 am

I love you Allan! But no, I couldn’t explain in 10 hrs what Joseph Hentges shows us in 5 minutes.

greenfire67
Irregular
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May 13, 2014 11:17 am

Just to note; I am an info junkie. Source material makes ALL the difference, make or break ya. The info, obviously not reviewed, is some of the best I’ve found in yrs.
I’m not retired, so to blog for days is not an option. Don’t care to review? Your loss.
If I could only follow 2 people, Dr.K & Joseph Hentges.
“watch and learn”
https://www.youtube.com/watch?v=ClmucvckEt4&list=TLWH1bU2r8ZnvqGOdgud9y2GhFdWS_JI7k

Don’t get all Janet on me or I’ll whip out my Cannon and smack ya in da face wit it. lol
I still love ya Allan. Maybe you could review the info first, then critique it.

Alan Harris
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Alan Harris
May 13, 2014 1:13 pm

I dont have the knowledge to critique it (yet) thats why I was asking you to do it. But fair enough, if this isnt just some random cut and paste link, and you truly feel its worth our time to create a foundation, thats good enough for me. Ill read and thanks for the pointer.

capndave040
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capndave040
May 12, 2014 12:31 pm
I was a licensed broker back in the 80’s with a Series 3, 63, and 7 licenses. I hated the business because I had to think about my money first and your money next. I worked for “highly reputable ” firms who are still in business today and that’s where I first heard the phrase “lipstick on a pig” among other self serving rationalizations about why brokers win and customers lose. I trade for myself only and do not give any advice. With that said, IMHO, the only method that works most of the time is one that combines a… Read more »
Alan Harris
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Alan Harris
May 12, 2014 2:52 pm
It helps a great deal ! Im always confused when people talk about ‘affordable losses’ coz its a moving target. Losing 10% when you’ve paid off the mortgage and kids, while still earning more than you spend…. I understand. But losing 10% when your outgoings are negative, and income has ceased is mad gambling. There is no general right %. In fact % doesn’t come into it. Disposable $ is the limit…..and even that hurts if you aint got any. Would you be so good as to describe RSI or whatever. I know I can look it up on wiki.… Read more »
capndave040
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capndave040
May 12, 2014 6:31 pm
Alan, thanks for the kind words. Since I believe that so-called “rational” markets are an oxymoron, I see the market as being in a constant state of flux with a “real” price only a “belief” in some “unknown” future. Human emotion being what it is, the price waxes and wanes constantly from euphoria to despair and everything in between. Most of the technical trading world is targeted at calculating just this overbought/oversold relationship. RSI and stochastics both measure the level of that emotion in terms of a moving average of closing prices over variable time periods with the hope of… Read more »
justirregular
Member
72
May 12, 2014 7:07 pm

capndave040, Thank You Very much for your thoughts and Ideas. Love your picks too!
I do not have any money to buy Gild Or AKAO! Wanted too! Good luck to you!

greenfire67
Irregular
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May 13, 2014 10:24 am

Capndave,
Thanks for the post. I also use MFI, money flow index, which mimics the MACD.

greenfire67
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May 13, 2014 12:48 pm
omcdac1
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omcdac1
May 13, 2014 1:51 pm

Great Place to share valuable info.
Thanks Alan and everyone who is contributing.

greenfire67
Irregular
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May 13, 2014 9:23 pm

Alan,
I think I’ve found a set videos that may get your attention. Zecco Zirens teach fundamental analysis. Enjoy;
https://www.youtube.com/watch?v=K_7JrmF90ek

Elliot
Irregular
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June 11, 2014 2:12 pm

Alan, I am confused by your persona on this thread, as on other threads you seem to be rather well-versed in technical analysis. I remember you saying somewhere that clearly RGDO was a sell when it crossed below its 30 day sma, and it would not become a buy again until it crossed back up. Maybe I’m going crazy and this was someone else. Or maybe you are just “playing dumb” on here to help facilitate teaching by others. Idk.

Alan Harris
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Alan Harris
November 14, 2014 4:23 am

Opps….missed this post till now. Yes Im a great believer that the MA’s are an excellent indicator of general market sentiment. So v simply, I buy when the price crosses up above the MA and sell when it crosses below. Im sure there are fancier systems, but its a v simplistic strategy thats served me well.
Trust me, Im not just playing dumb…..Im the real deal !

lululeman
Irregular
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November 14, 2014 11:34 am

Good morning Alan,
Which particular MAs have been better indicators for med to long term trades for you? Im watching GILD and CELG trying to decide where a good entry point might be. Im neither long nor short. Stock or option. Thanks for sharing…..Lulu

Alan Harris
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Alan Harris
November 14, 2014 1:40 pm
I use three. 10+20 for trading. 20+50 for investing. The shorter of the two gives you a clue to whats developing. The longer tells you whats already mostly happened. By watching the two converge/diverge (I call it balooning) you get a good idea of the market sentiment. Its a lot like MACD….which I also add to the mix at standard settings. Try this. Set up a yahoo 1 yr graph with 10 (coloured blue) +20 (coloured red) mA. You can use ANY ticker, it really doesnt matter. Place a sheet of paper over your screen to blank out the graph.… Read more »
Alan Harris
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Alan Harris
November 14, 2014 1:43 pm

Wow I made 1k Thumbs….Im humbled guys.

lululeman
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November 14, 2014 2:12 pm

Thank you Alan…….XO ( really a newbie SP ? )
GILD so……
Seeing the 10 SMA cross over downward thru the 20 earlier today, and the spread seems to be widening. Id sell if I was long and a day trader?
CELG so….
Looks like 10 is about to cross over the 20, a sell signal as well?
Or
Sit sideline/ hold if in correct position with trend) until see a cross over move one way or the other again?
Congrats 1K – smiles

lululeman
Irregular
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November 14, 2014 2:14 pm

Either way, when red and blue converge/diverge, its purple my favourite colour!

lululeman
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November 14, 2014 2:46 pm

Alan, did you just spank me? I will do my very best to post in the correct thread. I have simply been ‘replying’ but I understand. Oooops, sorry,

Alan Harris
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Alan Harris
November 14, 2014 3:57 pm

Its a learning curve that everyone has to go thru and I just seem to be Mr Nasty. But unless we have some order, we’ll just end up in chaos.

Alan Harris
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Alan Harris
November 14, 2014 4:09 pm
You get the idea. Best to do the paper over the screen game for the graph of the last 12months (Its difficult to believe whats being foretold about the future unless you back test the strategy to see it works in the past). I cant find a SINGLE example where the system failed in the past. Thats why I said any ticker will do. The system ‘seems’ to work irrespective. But it only works long term…..day trading still works, but the market can turn round in seconds, so you can be wrong sided very quickly. Re sit sideline: Thats a… Read more »
Alan Harris
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Alan Harris
November 14, 2014 6:17 pm

SP= share price

Alan Harris
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Alan Harris
November 14, 2014 6:27 pm

Have a look tomorrow and tell me if CELG and GILD were a sell. The system is rarely (never) wrong.

lululeman
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November 14, 2014 2:54 pm

Over what number of days…..?

Alan Harris
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Alan Harris
November 14, 2014 6:16 pm

What ‘over what number of days’? I dont understand the question.

hendrixnuzzles
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April 7, 2015 2:02 pm
Hi Alan, I’m late to the thread but wanted to mention a few things on technical analysis and a question that was not answered clearly up above on MAs and EMAs. I imagine you know this but other readers may benefit. The exponential moving average applies higher weight to more recent prices, so it is more sensitive to recent moves depending on the number of days and the factor attached to weighting. In todays world with the ability to custom design all manner of trading signals, I tend to set my day parameters on MA and EMA just a little… Read more »
biotechlong (btl)
Irregular
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November 14, 2014 7:16 pm

Food for thought for chartists plotting ahead 4-to-6 weeks: will history repeat itself?
http://finance.yahoo.com/blogs/talking-numbers/the-market-has-done-this-just-4-times-in-the-last-20-years-232157220.html

lululeman
Irregular
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November 14, 2014 9:57 pm
Good evening ‘boys’.. Lawrence, interesting video. Thats the pull back Im hoping for! Now have to do the research on what happened after those times. Thanks for posting that. Alan: Already answered, thank you. yes I agree to the statements u made above concerning fees, and missing out. SP is what I thought, one never knows with you schmardt boys tho, thot I better be sure. I will re-chart tomorrow when the brain is fresh, and report. Thank you for yr patience ( not nasty at all). I understand. Its firkin -10 here in Beautiful Okanagan Valley BC, Global warming… Read more »
lululeman
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November 14, 2014 11:05 pm

Alan
Ill look again in the am but since I u may be 3 hours ahead of me time wise ….
here is what I see.
CELG was not a sell
GILD was a sell, Nov 13, 2014
Lulu

biggdan
Member
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biggdan
November 18, 2014 2:24 am

To answer from the Payola thread about a “Shooting Star” pattern, I don’t know much more than anyone else but noted several posts on the ESPR Stocktwits page pointing out that ESPR had one today. Here is the explanation of a Shooting Star: http://en.m.wikipedia.org/wiki/Shooting_star_(candlestick_pattern)

Mark2m
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Mark2m
November 22, 2014 1:35 pm
I just would like to throw my two cents referencing technical analysis. I have been a member of stockgumshoe for many years, but I have never been involved in any of the discussions. Many years ago I joined a trading group with the sole purpose of learning and continue education in technical analysis. We were quite fortunate in those years that due to the size of the group, we managed to get the best traders in the country and off course every platform developer, chartist etc.. . The traders purpose was to drum up business for their $1K + seminars… Read more »
hipockets
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November 22, 2014 2:18 pm
Thank you for your post, Mark. (I wonder: Why are comments called a “post”?) I’m just starting to make some headway in TA, and I have to agree — keep it simple until you have experience with the simple techniques (such as moving average cross overs, chart patterns, and support and resistance points.) I have found that the basics of the simple techniques are easy to understand – but not the nuances. I chart the stocks in which I am interested daily. My method is to download the prices and volumes in one batch, and then manually update the individual… Read more »
arch1
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November 22, 2014 4:35 pm

Just a quick flyby,,, Something written for all was often fastened on a light post etc. for whole village to read,,hence post= public notice. Investable and investible are both equally good words with slight nuances of meaning,,,If you can invest in a thing it is investable,,things you are investing in are investibles,,,,clear as mud? Spell checker is a dolt.

Mark2m
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Mark2m
November 22, 2014 3:02 pm
There are multiple free sources for charts on the web, although bottom line having experienced quite a few platforms including Trade Station, E Signal, Ensign, etc.. The best program for me is Worden Telechart. There is ton’s of information, ton’s of support, plus you have the option of a real time system or with 20 minute delay. The original program TC 2000K was the best/cheapest program and I have used it for 12+ years. The learning curve is a bit steep, but well worth the opportunity to navigate. Also their latest program which is also separate is very good and… Read more »
hipockets
Irregular
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November 23, 2014 12:19 am

Thanks, Mark. That’s just the type of informtion I was looking for.

Alan Harris
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Alan Harris
November 27, 2014 2:42 pm

All (except KSS!!): Theres a new post on Jingle Bells. I urge you to read it v soon. http://www.stockgumshoe.com/2014/11/microblog-jingle-bells/#comment-3379639

Alan Harris
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Alan Harris
December 9, 2014 5:46 am

Theirre: Are you here?

SoGiAm
Irregular
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December 9, 2014 6:19 am

Gummies I don’t want to be the only bear in the room but this revelent and timely imho:
http://www.smallcapnetwork.com/The-Market-Just-Ran-Out-of-Gas-or-More-Specifically-Ran-Out-of-Buyers/s/article/view/p/mid/7/id/1716/
I think that most of us are in the same boat looking for dry gun powder and safest liquidity to temporarily exit to maximize profits now. Watch the markets carefully especially today! Best-Ben

Alan Harris
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Alan Harris
December 10, 2014 4:55 pm

All: If anyone wants to send a jinglebells greeting to KSS…heres the place http://www.stockgumshoe.com/2014/12/microblog-happy-christmas-dr-kss-from-all-us-gummies/

lululeman
Irregular
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January 9, 2015 2:41 pm
Useful links: Understanding Analysts’ Recommendations. FINRA’s guide provides some great information about how to read analysts’ ratings systems and how analysts’ recommendations should and should not factor into your investment decisions. Here are some highlights from their free guide: – Ratings tend to be inflated. Brokerage firms and investment research firms rarely ever issue “sell” and “underperform” ratings. “Buy” ratings are really “hold” ratings and “hold” ratings are really “sell” ratings. – Companies use very different ratings systems. One firm’s “buy” rating may be its top rating; however, another firm might have one or two ratings above its “buy rating.”… Read more »
lululeman
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Mark2m
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Mark2m
April 6, 2015 1:14 pm

Has this post moved, or is this dormant since no one has any interest in TA ?

hendrixnuzzles
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April 7, 2015 2:09 pm

Recently here, new subscriber.

I use candlesticks and relatively straight forward basic technical indicators…EMA, volume,
MACD over different time frames. Do not have the temperment for highly complicated technicals.

What’s on your mind ?

Mark
Guest
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Mark
April 7, 2015 2:30 pm

I have written previously Nov 22,2014 about my methods to keep it simple. I recently have come across Ichimoku Cloud while looking for a better means of trading Forex. It turns out that with equities and the scanning capabilities of my program, Ichimoku is excellent in determining Bullish/Bearish/or neutral. I wanted some insight and communicate with others that are familiar with Ichimoku. Since a simple scan seems more efficacious utilizing the cloud vs Fibonacci.

hendrixnuzzles
Irregular
2789
April 14, 2015 3:31 am

I’m not the right guy for you, never heard of Ichimoku. Know a little on Fibonacci but I find as a practical matter I am not disciplined enough to apply it. Best wishes

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