Technical Analysis The Complete Resource for Financial Market Technicians Second.pdf

1、TECHNICALANALYSISThis page intentionally left blank Download at TECHNICALANALYSISTHECOMPLETERESOURCEFORFINANCIALMARKETTECHNICIANSSECONDEDITIONCharles D.Kirkpatrick II,CMTJulie Dahlquist,Ph.D.,CMTCharles D.Kirkpatrick II,CMTJulie Dahlquist,Ph.D.,CMTDownload at Vice President,Publisher:Tim MooreAssoci

2、ate Publisher and Director of Marketing:Amy NeidlingerExecutive Editor:Jim BoydEditorial Assistant:Pamela BolandOperations Manager:Gina KanouseSenior Marketing Manager:Julie PhiferPublicity Manager:Laura CzajaAssistant Marketing Manager:Megan ColvinCover Designer:Chuti PrasertsithManaging Editor:Kri

3、sty HartProject Editor:Betsy HarrisCopy Editor:Karen AnnettProofreader:Kathy RuizIndexer:Erika MillenCompositor:Bronkella PublishingManufacturing Buyer:Dan Uhrig 2011 by Pearson Education,Inc.Publishing as FT PressUpper Saddle River,New Jersey 07458FT Press offers excellent discounts on this book wh

4、en ordered in quantity for bulk purchases or special sales.For moreinformation,please contact U.S.Corporate and Government Sales,1-800-382-3419,.For sales outside the U.S.,please contact International Sales at .Company and product names mentioned herein are the trademarks or registered trademarks of

5、 their respectiveowners.All rights reserved.No part of this book may be reproduced,in any form or by any means,without permission inwriting from the publisher.Printed in the United States of AmericaFirst Printing November 2010ISBN-10:0-13-705944-2ISBN-13:978-0-13-705944-7Pearson Education LTD.Pearso

6、n Education Australia PTY,Limited.Pearson Education Singapore,Pte.Ltd.Pearson Education Asia,Ltd.Pearson Education Canada,Ltd.Pearson Educacin de Mexico,S.A.de C.V.Pearson EducationJapanPearson Education Malaysia,Pte.Ltd.Library of Congress Cataloging-in-Publication DataKirkpatrick,Charles D.Technic

7、al analysis:the complete resource for financial market technicians/Charles D.Kirkpatrick and JulieDahlquist.2nd ed.p.cm.Includes bibliographical references and index.ISBN 978-0-13-705944-7(hbk.:alk.paper)1.Technical analysis(Investment analysis)2.Investment analysis.I.Dahlquist,Julie R.,1962-II.Titl

8、e.HG4529.K564 2011332.632042dc222010032991Download at T Thriwi it th h t th he e u un nd de er rs st ta an nd di in ng g t th ha at t n ne ei it th he er r t th he e a au ut th ho or r n no or r t th he e p pu ub bl li is sh he er r i is s e en ng ga ag ge ed d i in nhi is s b bo oo ok k i is s s so

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12、r re ef fu ul ll ly y a an nd d a ap pp pr ro op pr ri ia at te el ly y.TmTh he e a au ut th ho or r a an nd d t th he e p pu ub bl li is sh he er r d di is sc cl la ai im li ia ab bi il li it ty y,l lo os ss s,o or r r ri is sk k r re es su ul lt ti in ng g d di ir re ec ct tl ly y o or r i in nd d

13、i ir re ec ct tl ly y,f fr ro oman ny y l m t th he e u us se e o or r a ap pp pl li ic ca at ti io on n o of f a an ny y o of f t th he ec co on nt te en nt ts s o of f t th hi is s b bo oo ok k.Download at This page intentionally left blank Download at To Elliemy precious wife,long-term love and c

14、ompanion,and best friend.CharlieTo Richard,Katherine,and Sepp.JulieDownload at This page intentionally left blank Download at C CONTENTSONTENTSAcknowledgments.xxivAbouAcknowledgments.xxivAbout t the Authors.xxvithe Authors.xxviPart I:IntroductionPart I:Introduction1 1 I INTRODUCTION TO NTRODUCTION T

15、O T TECHNICAL ECHNICAL A ANALYSIS NALYSIS.3.32 2 T THE HE B BASIC ASIC P PRINCIPLE OF RINCIPLE OF T TECHNICAL ECHNICAL A ANALYSISNALYSISTTHE HE T TREND REND.9.9How Does the Technical Analyst Make Money?How Does the Technical Analyst Make Money?.10What Is a Trend?10What Is a Trend?.11How Are Trends I

16、dentified?11How Are Trends Identified?.12Trends Develop from Supply and Demand 12Trends Develop from Supply and Demand.14What Trends Are There?14What Trends Are There?.15What Other Assumptions Do Technical Analysts Make?15What Other Assumptions Do Technical Analysts Make?.17Conclusion 17Conclusion.1

17、9Review Questions 19Review Questions.2020Download at 3 3H HISTORY OF ISTORY OF T TECHNICAL ECHNICAL A ANALYSIS NALYSIS.23.23Early Financial Markets and Exchanges Early Financial Markets and Exchanges.23Modern Technical Analysis 23Modern Technical Analysis.26Current Advances in Technical Analysis 26C

18、urrent Advances in Technical Analysis.30304 4T THE HE T TECHNICAL ECHNICAL A ANALYSIS NALYSIS C CONTROVERSY ONTROVERSY.33.33Do Markets Follow a Random Walk?Do Markets Follow a Random Walk?.3535Fat Tails.36Drawdowns.37Proportions of Scale.39Can Past Patterns Be Used to Predict the Future?Can Past Pat

19、terns Be Used to Predict the Future?.40What About Market Efficiency?40What About Market Efficiency?.4141New Information.42Are Investors Rational?.46Will Arbitrage Keep Prices in Equilibrium?.47Behavioral Finance and Technical Analysis Behavioral Finance and Technical Analysis.49Pragmatic Criticisms

20、of Technical Analysis 49Pragmatic Criticisms of Technical Analysis.50What Is the Empirical Support for Technical Analysis?50What Is the Empirical Support for Technical Analysis?.52Conclusion 52Conclusion.52Review Questions 52Review Questions.5353Part II:Markets and Market IndicatorsPart II:Markets a

21、nd Market Indicators5 5A AN N O OVERVIEW OF VERVIEW OF MMARKETS ARKETS.57.57In What Types of Markets Can Technical Analysis Be Used?In What Types of Markets Can Technical Analysis Be Used?.58Types of Contracts58Types of Contracts.5959Cash Market.60Derivative Markets.62Swaps and Forwards.66x Contents

22、Download at How Does a Market Work?How Does a Market Work?.66Who Are the Market Players?66Who Are the Market Players?.68How Is the Market Measured?68How Is the Market Measured?.6969Price-Weighted Average.70Market Capitalization Weighted Average.71Equally Weighted(or Geometric)Average.72Conclusion Co

23、nclusion.73Review Questions 73Review Questions.73736 6 D DOW OW T THEORY HEORY.75.75Dow Theory Theorems Dow Theory Theorems.7878The Primary Trend.80The Secondary Trend.81The Minor Trend.81Concept of Confirmation.82Importance of Volume.83Criticisms of the Dow Theory Criticisms of the Dow Theory.85Con

24、clusion 85Conclusion.86Review Questions 86Review Questions.86867 7S SENTIMENTENTIMENT.89.89What Is Sentiment?What Is Sentiment?.90Market Players and Sentiment 90Market Players and Sentiment.91How Does Human Bias Affect Decision Making?91How Does Human Bias Affect Decision Making?.92Crowd Behavior an

25、d the Concept of Contrary Opinion 92Crowd Behavior and the Concept of Contrary Opinion.95How Is Sentiment of Uninformed Players Measured?95How Is Sentiment of Uninformed Players Measured?.9696Sentiment Indicators Based on Options and Volatility.97Polls.102Other Measures of Contrary Opinion.107Unquan

26、tifiable Contrary Indicators.116Historical Indicators.117Contents xiDownload at How Is the Sentiment of Informed Players Measured?How Is the Sentiment of Informed Players Measured?.118118Insiders.118Sentiment in Other Markets Sentiment in Other Markets.124124Treasury Bond Futures Put/Call Ratio.124T

27、reasury Bond COT Data.125Treasury Bond Primary Dealer Positions.125T-Bill Rate Expectations by Money Market Fund Managers.126Hulbert Gold Sentiment Index Hulbert Gold Sentiment Index.128Conclusion128Conclusion.128Review Questions128Review Questions.1291298 8 MMEASURING EASURING MMARKET ARKET S STREN

28、GTH TRENGTH.131.131Market Breadth Market Breadth.133133The Breadth Line or Advance-Decline Line.134Double Negative Divergence.136Traditional Advance-Decline Methods That No Longer Are Profitable.138Advance-Decline Line to Its 32-Week Simple Moving Average.139Breadth Differences.140Breadth Ratios.146

29、Breadth Thrust.147Summary of Breadth Indicators.148Up and Down Volume Indicators Up and Down Volume Indicators.149149The Arms Index.149Ninety Percent Downside Days(NPDD).15210-to-1 Up Volume Days and 9-to-1 Down Volume Days.153Net New Highs and Net New LowsNet New Highs and Net New Lows.154154New Hi

30、ghs Versus New Lows.155High Low Logic Index.156Hindenburg Omen.157Using Moving Averages Using Moving Averages.157157Number of Stocks above Their 30-Week Moving Average.157Very Short-Term Indicators Very Short-Term Indicators.159159Breadth and New Highs to New Lows.159Net Ticks.160ConclusionConclusio

31、n.161Review Questions161Review Questions.162162xii ContentsDownload at 9 9 T TEMPORAL EMPORAL P PATTERNS AND ATTERNS AND C CYCLESYCLES.163.163Periods Longer than Four Years Periods Longer than Four Years.164164Kondratieff Waves,or K-Waves.16434-Year Historical Cycles.166Decennial Pattern.168Periods

32、of Four Years or Less Periods of Four Years or Less.169169Four-Year or Presidential Cycle.170Election Year Pattern.171Seasonal Patterns.172January Signals January Signals.174174January Barometer.174January Effect.174Events Events.175Conclusion175Conclusion.175Review Questions175Review Questions.1761

33、7610 10 F FLOW OF LOW OF F FUNDSUNDS.177.177Funds in the Marketplace Funds in the Marketplace.178178Money Market Funds.178Margin Debt.179Secondary Offerings.180Funds Outside the Security MarketFunds Outside the Security Market.181181Household Financial Assets.182Money Supply.183Bank Loans.184The Cos

34、t of Funds The Cost of Funds.185185Short-Term Interest Rates.185Long-Term Interest Rates(or Inversely,the Bond Market).187Money Velocity.187Misery Index.188Fed PolicyFed Policy.190190Fed Policy Futures.191The Federal Reserve Valuation Model.192Three Steps and a Stumble.193Yield Curve.194Contents xii

35、iDownload at ConclusionConclusion.195Review Questions195Review Questions.196196Part III:Trend AnalysisPart III:Trend Analysis1111H HISTORY AND ISTORY AND C CONSTRUCTION OF ONSTRUCTION OF C CHARTS HARTS.199.199History of Charting History of Charting.201What Data Is Needed to Construct a Chart?201What

36、 Data Is Needed to Construct a Chart?.204What Types of Charts Do Analysts Use?204What Types of Charts Do Analysts Use?.206206Line Charts.207Bar Charts.210Candlestick Charts.211What Type of Scale Should Be Used?What Type of Scale Should Be Used?.213213Arithmetic Scale.213Semi-Logarithmic Scale.214Poi

37、nt-and-Figure Charts Point-and-Figure Charts.215215One-Box(Point)Reversal.216Box Size.217Multibox Reversal.217Time.218Arithmetic Scale.220Logarithmic Scale.220ConclusionConclusion.220Review Questions220Review Questions.2212211212T TRENDSRENDSTTHE HE B BASICS ASICS.223.223TrendThe Key to Profits Tren

38、dThe Key to Profits.224Trend Terminology 224Trend Terminology.225Basis of Trend AnalysisDow Theory 225Basis of Trend AnalysisDow Theory.225How Does Investor Psychology Impact Trends?225How Does Investor Psychology Impact Trends?.226How Is the Trend Determined?226How Is the Trend Determined?.227227Pe

39、aks and Troughs.228xiv ContentsDownload at Determining a Trading Range Determining a Trading Range.230230What Is Support and Resistance?.230Why Do Support and Resistance Occur?.230What About Round Numbers?.232How Are Important Reversal Points Determined?.232How Do Analysts Use Trading Ranges?.236Dir

40、ectional Trends(Up and Down)Directional Trends(Up and Down).237237What Is a Directional Trend?.238How Is an Uptrend Spotted?.238Channels.243Internal Trend Lines.244Retracements.245Pullbacks and Throwbacks.247Other Types of Trend Lines Other Types of Trend Lines.247247Trend Lines on Point-and-Figure

41、Charts.248Speed Lines.248Andrews Pitchfork.249Gann Fan Lines.250ConclusionConclusion.251Review Questions251Review Questions.25125113 13 B BREAKOUTSREAKOUTS,S,STOPSTOPS,AND AND R RETRACEMENTS ETRACEMENTS.255.255BreakoutsBreakouts.255255How Is Breakout Confirmed?.256Can a Breakout Be Anticipated?.262S

42、tops Stops.263263What Are Entry and Exit Stops?.263Changing Stop Orders.264What Are Protective Stops?.264What Are Trailing Stops?.265What Are Time Stops?.268What Are Money Stops?.269How Can Stops Be Used with Breakouts?.269Using Stops When Gaps Occur.269Waiting for Retracement.270Calculating a Risk/

43、Return Ratio for Breakout Trading.271Placing Stops for a False(or“Specialist”)Breakout.272Contents xvDownload at ConclusionConclusion.273Review Questions273Review Questions.2742741414MMOVING OVING A AVERAGES VERAGES.275.275What Is a Moving Average?What Is a Moving Average?.276How Is a Simple Moving

44、Average Calculated?276How Is a Simple Moving Average Calculated?.276276Length of Moving Average.279Using Multiple Moving Averages.280What Other Types of Moving Averages Are Used?What Other Types of Moving Averages Are Used?.281281The Linearly Weighted Moving Average(LWMA).282The Exponentially Smooth

45、ed Moving Average(EMA).282Wilder Method.284Geometric Moving Average(GMA).284Triangular Moving Average.285Variable EMAs.285Strategies for Using Moving AveragesStrategies for Using Moving Averages.285285Determining Trend.285Determining Support and Resistance.286Determining Price Extremes.287Giving Spe

46、cific Signals.288What Is Directional Movement?What Is Directional Movement?.288288Constructing Directional Movement Indicators.289Using Directional Movement Indicators.289What Are Envelopes,Channels,and Bands?What Are Envelopes,Channels,and Bands?.291291Percentage Envelopes.291Bands.292Trading Strat

47、egies Using Bands and Envelopes.294Channel.295ConclusionConclusion.296Review Questions296Review Questions.297297xvi ContentsDownload at Part IV:Chart Pattern AnalysisPart IV:Chart Pattern Analysis15 15 B BAR AR C CHART HART P PATTERNS ATTERNS.301.301What Is a Pattern?What Is a Pattern?.302302Common

48、Pattern Characteristics.302Do Patterns Exist?Do Patterns Exist?.303303Behavioral Finance and Pattern Recognition.304Computers and Pattern Recognition Computers and Pattern Recognition.305Market Structure and Pattern Recognition 305Market Structure and Pattern Recognition.306Bar Charts and Patterns 3

49、06Bar Charts and Patterns.307How Profitable Are Patterns?307How Profitable Are Patterns?.308Classic Bar Chart Patterns 308Classic Bar Chart Patterns.309309Double Top and Double Bottom.309Rectangle(Also“Trading Range”or“Box”).310Triple Top and Triple Bottom.313Standard Triangles.314Descending Triangl

50、e.315Ascending Triangle.317Symmetrical Triangle(Also“Coil”or“Isosceles Triangle”).317Broadening Patterns.320Diamond Top.321Wedge and Climax.322Patterns with Rounded EdgesRounding and Head-and-Shoulders Patterns with Rounded EdgesRounding and Head-and-Shoulders.325325Rounding Top,Rounding Bottom(Also