Introduction to Technical Analysis Part 2

Introduction to Technical Analysis

 Part 2

Market movements:

Dow and hamlten and dow jones Characterized three types of price movements of the Dow Jones: basic movements, secondary movements and daily fluctuations. Moving the elections last time
months ago of a few to several years and represent the broad underlying trend of the market. Secondary school (or reaction) movements of the last few weeks
To a few months and move counter to the primary trend. Daily fluctuations can move with or against the primary trend and last from a few
Hours to a few days, but usually no more than a week.

Basic movements:

Represent the basic trend of the market movements of the broad underlying and can last from a few to months many years. this movements typically
Referred to as bull markets fails. When the underlying trend , it will remain valid until the contrary is proved. hamlten thought that the length
The duration of the trend were impossible selection significantly. hamlten studied rates and came to some general instructions for the length and duration, but warned of an attempt
Applying this  as bases for prediction.

Secondary movements:

Movements were secondary to reverse the underlying trend and reactionary in nature. In a bull market a secondary move is considered correct. failing market market,
Secondary movements, calls for meetings of the reaction at times. Partly a Dow theory, the outline of Coca-Cola used to portray the meetings of the reaction (or movements
Secondary) within a bear trend is essential. Under the scheme, which depicts a correction within a primary bull trend.

September / September - 96, record the DJIA new high level, thus establishing the underlying trend as rising. Of the basin to reach the
Peak, primary advance rose 1988 points. During the progress of the September / September - 96 to March / March - 97, the DJIA is failing
For more than two consecutive two weeks. When end of March / March, after three consecutive weeks of fails, it became clear that THIS move was in a class
And daily fluctuations can be considered a secondary move. Note hamlten some characteristics that were common in many secondary movements in both bull
faling and markets. this characteristics should not be interpreted as bases, but rather a loose transactions to be used in conjunction with the methods
Other analysis. The first three properties to the example provided above.

Based on historical observation, speculated that the movements hamlten secondary track 1 second
; 1988 = 5170 - Quantity of idealism. In fact, the secondary move in early 1997 retracing about 42% of the primary move. (7158
= 842 842/1988 = 42.35%) 0.6316 --7 158

hamlten also noted that the secondary movements tend to be faster and sharper than the previous primary move. Only by comparing the optical, we
(38% = 5170/1988)%, we can see that the secondary move was sharper, which the former primary advance. Primary move offers 38
%) = 11.7 7158/842%) and lasted from July / July - 96 to March / March - 97, about 8 months. see secondary move correct 11.7
And lasted just five weeks.
At end of the secondary move, there is usually dull period just before full time. Small price movement, fail in size, or a group of
Marking the two they can this stupid. Under the scheme a daily focus in April / April - 97 and the low level of the secondary move outlined above.

Elliott Wave Theory:

According to Elliott wave theory, stock prices tend to move in a predetermined number of waves consistent with the Fibonacci series. Specifically, the
Elliott described the market movments in five distinct waves on the top and three distinct on the downside. The basic shape of the wave

In a major bull move. The two waves represent or four 'cure,' or upwaves waves one, three and five represents the 'momentum', or minor
Simple in a major bear move, downwaves bull move in the main. Lucy waves covered the letters represent a minor downwaves
Bear in simple wave. upwave while B represents one
Elliott suggested that the band is found in many levels, the meaning can be a there  waves within waves. For clarity, THIS means that
Planned on not only the primary wave pattern, but also can represent what occurs just between points 2 and 4. Of Planning below shows how
Fundamental waves can crash in smaller waves.

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