Where are your risks?
Traders talk about and think about risk all the time, and for good reason: this is a risky business! A lot of things can go wrong, and some of those…
What happens after a big down day in stocks?
So the stock market sold off hard yesterday. If you were living under a big enough rock you might have missed it, but now the doom and gloomers, the technicians…
Understanding the uncertainty of our market predictions
Most of us who write about financial markets look to the future. Yes, there is a place for theory, and any theory lies on a firm foundation of what has…
Using spread charts
This is another post in the small series on tracking, understanding, and trading relative performance. In previous posts, we looked at two ways to track relative performance as a percent…
Multi-asset relative strength comparisons
My previous post looked at the concept of comparing relative strength of two assets by comparing returns from a specific point in time. In that post, I suggested using a…
Showing relative performance: simple charts
Yesterday, I discussed some reasons why traders might want to consider looking at, or trading, the relative performance between markets. Today, let's look at a simple way to display that…
The most important thing you need to know about commodities
The marketplace is constantly evolving. One of the biggest changes over the past decade is the proliferation of Exchange Traded Products (ETPs) that allow stock traders to trade commodities (and…
What’s luck got to do with it?
Let's cut straight to the punchline: the answer is, "it turns out, quite a lot." Continuing on this week's series that attempts to break down important technical trading ideas into…
Reader question: Sentiment analysis?
Reader Tom asks: I have been reading your blog for a few weeks and I don't see any mention of sentiment. I also see you trade futures but you do…
That trend indicator, is it helping or hurting?
Continuing from my previous post on moving averages, let's take a look at using a moving average as a trend indicator. Again, here is some material from the unpublished part…
Moving averages: digging deeper
Ok, so I'll warn you up front: this one's going to be a little bit difficult. The response to my post on the 200 day moving average in the DJIA…
Does the 200 day moving average “work”?
This is one of those technical questions that does not have a quick, simple answer. The best answer is "no, not really, and almost certainly not in the way most…
Where the wild things are? No, where the open is.
The open, in many ways, is the most important price of the day; action off the open can often define the character of the entire session and even have implications…
Market stats: how to catch a common error
Financial markets are highly uncertain, and every decision we make is ruled by the iron fist of probability. For traders and investors, statistics, whether expressed explicitly or learned implicitly from…
Bad statistics lead to bad decisions: the first day of the month effect
It is easy to calculate statistics, and it seems like, more and more, we are bombarded with market statistics from every side. The problem is that many of those statistics…
Is the current bull market overextended? A historical perspective:
There is a lot of talk about the "historic bull market" we are in. Fundamental analysts raise valuation concerns, while technicians point to a myriad of factors, usually making the…