How to Spot High-Probability Trading Opportunities
Discover the Dynamics of Using Moving Averages
The “moving average” is a technical indicator which has stood the test of time. Nearly 25 years ago, Robert Prechter described this indicator in his famous essay, “What a Trader Really Needs to be Successful.” What he said then remains true today:
“…a simple 10-day moving average of the daily advance-decline net, probably the first indicator a stock market technician learns, can be used as a trading tool, if objectively defined rules are created for its use.”
Indeed, “objectively defined rules” are vital to the successful use of moving averages. And as you might imagine, advanced rules and guidelines work to the benefit of more advanced technicians. Continue reading
DJIA’s 200-Day Moving Average: Will the Dow stay above or below this demarcation line?
By Elliott Wave International
Moving averages are one of the most widely followed indicator in technical analysis.
Simply put, when the price of an index or stock stays above a particular price moving average line on a chart, that price level serves as support — a level where buyers reside.
If the price falls below a moving average line and “can’t” break through from the underside, this price level is a line of resistance — a price level where sellers hover.
That’s an easy explanation of moving averages for you.
8 Technical Indicators Point Down from Here
Back in March of 2009 at the peak of bearishness when almost everyone else was predicting the end of the world (or at least the end of the stock market) Robert Prechter took an extremely contrarian position and called for a rally from that point. And that is precisely what we got. Looking back that call seems almost prophetic. He called that bottom based on eight indicators which he said lined up on the bullish side.
Now In the April 2010 issue of his Elliott Wave Theorist he said these eight have now switched to bearish. Not one to mince words, he specifically predicted that the peak was due to roll-over between April 15 and May 7th. Considering the events on May 6th and 7th he is once again sounding prophetic. This is extremely important, the media would have you believe that the events of May 6th were the result of a typo. Prechter says it is imperative that you act now to protect yourself.
Because of the critical importance of this prediction, for those of you who don’t subscribe to EWT we are providing an excerpt from the April issue. And For a limited time, you can also visit Elliott Wave International to download the full 10-page April issue, free.
The following article is excerpted from Robert Prechter’s April 2010 issue of the Elliott Wave Theorist. Tim McMahon, Editor
What Do These 8 Technical Indicators Mean For The Markets?
May 7, 2010
By Robert Prechter, CMT
Technical Indicators
It is rare to have technical indicators all lined up on one side of the ledger. They were lined up this way—on the bullish side—in late February-early March of 2009. Today they are just as aligned but on the bearish side. Continue reading
How Elliott Wave Principle Can Improve Your Trading
The Wave Principle identifies trend, countertrend, maturity of a trend — and more.
by Editorial Staff
The following article is an excerpt from Elliott Wave International’s Trader’s Classroom Collection.
Every trader, every analyst and every technician has favorite techniques to use when trading. But where traditional technical studies fall short, the Wave Principle kicks in to show high probability price targets and, just as importantly, how to distinguish high probability trade setups from the ones that traders should ignore. Continue reading
What is the “Elliott Wave Principle”?
In the 1930s, Ralph Nelson Elliott, a corporate accountant by profession, studied price movements in the financial markets and observed that certain patterns repeat themselves. He offered proof of his discovery by making astonishingly accurate stock market forecasts. What appears random and unrelated, Elliott said, will actually trace out a recognizable pattern once you learn what to look for. Elliott called his discovery “The Elliott Wave Principle,” and its implications were huge. He had identified the common link that drives the trends in human affairs, from financial markets to fashion, from politics to popular culture. Continue reading
