A market trend is a perceived tendency of financial markets to move in a particular direction over time. These trends are classified as secular for long time frames, primary for medium time frames, secondary for short time frames. Traders attempt to identify market trends using technical analysis, a framework which characterizes market trends as predictable price tendencies within the market when price reaches support and resistance levels, varying over time. A trend can only be determined in hindsight; the terms "bull market" and "bear market" describe upward and downward market trends and can be used to describe either the market as a whole or specific sectors and securities. The names correspond to the fact that a bull attacks by lifting its horns upward, while a bear strikes with its claws in a downward motion. A secular market trend is a long-term trend that lasts 5 to 25 years and consists of a series of primary trends. A secular bear market consists of larger bear markets. In a secular bull market the prevailing trend is upward-moving.
The United States stock market was described as being in a secular bull market from about 1983 to 2000, with brief upsets including the crash of 1987 and the market collapse of 2000–2002 triggered by the dot-com bubble. In a secular bear market, the prevailing trend is downward-moving. An example of a secular bear market occurred in gold between January 1980 to June 1999, culminating with the Brown Bottom. During this period the market gold price fell from a high of $850/oz to a low of $253/oz. A primary trend lasts for a year or more. A bull market is a period of rising prices; the start of a bull market is marked by widespread pessimism. This point is when the "crowd" is the most "bearish"; the feeling of despondency changes to hope, "optimism", euphoria, as the bull runs its course. This leads the economic cycle, for example in a full recession, or earlier. An analysis of Morningstar, Inc. stock market data from 1926 to 2014 found that a typical bull market "lasted 8.5 years with an average cumulative total return of 458%", while annualized gains for bull markets range from 14.9% to 34.1%.
India's Bombay Stock Exchange Index, BSE SENSEX, had a major bull market trend for about five years from April 2003 to January 2008 as it increased from 2,900 points to 21,000 points, more than a 600% return in 5 years. Notable bull markets marked the 1925–1929, 1953–1957 and the 1993–1997 periods when the U. S. and many other stock markets rose. A bear market is a general decline in the stock market over a period of time, it is a transition from high investor optimism to widespread investor pessimism. According to The Vanguard Group, "While there's no agreed-upon definition of a bear market, one accepted measure is a price decline of 20% or more over at least a two-month period."A smaller decline of 10 to 20% is considered a correction. Once a market enters correction or bear market territory, it isn't considered to have exited that territory until a new high is reached. An analysis of Morningstar, Inc. stock market data from 1926 to 2014 found that a typical bear market "lasted 1.3 years with an average cumulative loss of −41%", while annualized declines for bear markets range from −19.7% to −47%.
A bear market followed the Wall Street Crash of 1929 and erased 89% of the Dow Jones Industrial Average's market capitalization by July 1932, marking the start of the Great Depression. After regaining nearly 50% of its losses, a longer bear market from 1937 to 1942 occurred in which the market was again cut in half. Another long-term bear market occurred from about 1973 to 1982, encompassing the 1970s energy crisis and the high unemployment of the early 1980s, yet another bear market occurred between March 2000 and October 2002. Recent examples occurred between October 2007 and March 2009, as a result of the financial crisis of 2007–2008. See 2015 Chinese stock market crash. A market top is not a dramatic event; the market has reached the highest point that it will, for some time. It is identified retrospectively, as market participants are not aware of it at the time it happens, thus prices subsequently fall, either or more rapidly. William J. O'Neil and company report that since the 1950s a market top is characterized by three to five distribution days in a major market index occurring within a short period of time.
Distribution is a decline in price with higher volume than the preceding session. The peak of the dot-com bubble occurred on March 24, 2000; the index closed at 4,704.73. The Nasdaq peaked at 5,132.50 and the S&P 500 at 1525.20. A recent peak for the broad U. S. market was October 9, 2007. The S&P 500 index closed at 1,565 and the Nasdaq at 2861.50. A market bottom is a trend reversal, the end of a market downturn, the beginning of an upward moving trend, it is difficult to identify a bottom while it is occurring. The upturn following a decline is short-lived and prices might resume their decline; this would bring a loss for the investor who purchased stock during a misperceived or "false" market bottom. Baron Roth
An open-high-low-close chart is a type of chart used to illustrate movements in the price of a financial instrument over time. Each vertical line on the chart shows the price range over one unit of time, e.g. one day or one hour. Tick marks project from each side of the line indicating the opening price on the left, the closing price for that time period on the right; the bars may be shown in different hues depending on whether prices fell in that period. The Japanese candlestick chart and OHLC charts show the same data, i.e. the opening, high and closing prices during a particular time frame. Day traders, who by default have to watch the price movements on a chart, prefer to use the Japanese candlesticks, because they show the "live action" price movements by expanding and contracting the candlestick's body, easier to grasp than the standard OHLC bar. Therefore, for dynamic real-time chart analysis, Japanese candlesticks offer advantages over standard OHLC bars. However, for technical analysis of static charts, such as after-market analysis of historical data, the OHLC bars have clear advantages over the Japanese candlesticks: the OHLC bars do not require color or fill pattern to show the Open and Close levels, they do not create confusion in cases when, for example, the Open price is lower than the Close price, but the Close price for the studied bar is lower than the Close price for the previous bar, i.e. the bar to the left on the same chart.
A simple variant on the OHLC chart is the HLC high-low-close chart that identifies the range of the time unit's price action and the end result of the time unit's price action. In technical analysis OHLC charts are combined with charts of other types such as line charts, column charts, range areas. Video describing the parts of the OHLC chart, determining uptrends/downtrends and reversals. Sources cited Visit the main overall explanation for Technical analysis, translated into many languages
Prentice Hall is a major educational publisher owned by Pearson plc. Prentice Hall publishes print and digital content for the higher-education market. Prentice Hall distributes its technical titles through the Safari Books Online e-reference service. On October 13, 1913, law professor Charles Gerstenberg and his student Richard Ettinger founded Prentice Hall. Gerstenberg and Ettinger took their mothers' maiden names—Prentice and Hall—to name their new company. Prentice Hall was acquired by Gulf+Western in 1984, became part of that company's publishing division Simon & Schuster. Publication of trade books ended in 1991. Simon & Schuster's educational division, including Prentice Hall, was sold to Pearson by G+W successor Viacom in 1998. There were two or more authors, their books turned up missing. One book'The Roof Builder's Handbook' is still being sold in 2018 for as much as $230 per new copy, but the author William C. McElroy was told by Pearson that all new books were either destroyed or went missing in 1995.
Some 2,385 copies are missing. Prentice Hall is the publisher of Magruder's American Government as well as Biology by Ken Miller and Joe Levine, their artificial intelligence series includes Artificial Intelligence: A Modern Approach by Stuart J. Russell and Peter Norvig and ANSI Common Lisp by Paul Graham, they published the well-known computer programming book The C Programming Language by Brian Kernighan and Dennis Ritchie and Operating Systems: Design and Implementation by Andrew S. Tanenbaum. Other titles include Dennis Nolan's Big Pig, Monster Bubbles: A Counting Book, Wizard McBean and his Flying Machine, Witch Bazooza, Llama Beans, The Joy of Chickens. A Prentice Hall subsidiary, Reston Publishing, was in the foreground of technical-book publishing when microcomputers were first becoming available, it was still unclear who would be buying and using "personal computers," and the scarcity of useful software and instruction created a publishing market niche whose target audience yet had to be defined.
In the spirit of the pioneers who made PCs possible, Reston Publishing's editors addressed non-technical users with the reassuring, mildly experimental, Computer Anatomy for Beginners by Marlin Ouverson of People's Computer Company. They followed with a collection of books, by and for programmers, building a stalwart list of titles relied on by many in the first generation of microcomputers users. Prentice Hall International Series in Computer Science Prentice Hall website Prentice Hall School website Prentice Hall Higher Education website Prentice Hall Professional Technical Reference website
In engineering and science, dimensional analysis is the analysis of the relationships between different physical quantities by identifying their base quantities and units of measure and tracking these dimensions as calculations or comparisons are performed. The conversion of units from one dimensional unit to another is somewhat complex. Dimensional analysis, or more the factor-label method known as the unit-factor method, is a used technique for such conversions using the rules of algebra; the concept of physical dimension was introduced by Joseph Fourier in 1822. Physical quantities that are of the same kind have the same dimension and can be directly compared to each other if they are expressed in differing units of measure. If physical quantities have different dimensions, they cannot be expressed in terms of similar units and cannot be compared in quantity. For example, asking whether a kilogram is larger than an hour is meaningless. Any physically meaningful equation will have the same dimensions on its left and right sides, a property known as dimensional homogeneity.
Checking for dimensional homogeneity is a common application of dimensional analysis, serving as a plausibility check on derived equations and computations. It serves as a guide and constraint in deriving equations that may describe a physical system in the absence of a more rigorous derivation. Many parameters and measurements in the physical sciences and engineering are expressed as a concrete number – a numerical quantity and a corresponding dimensional unit. A quantity is expressed in terms of several other quantities. Compound relations with "per" are expressed with division, e.g. 60 mi/1 h. Other relations can involve powers, or combinations thereof. A set of base units for a system of measurement is a conventionally chosen set of units, none of which can be expressed as a combination of the others, in terms of which all the remaining units of the system can be expressed. For example, units for length and time are chosen as base units. Units for volume, can be factored into the base units of length, thus they are considered derived or compound units.
Sometimes the names of units obscure the fact. For example, a newton is a unit of force; the newton is defined as 1 N = 1 kg⋅m⋅s−2. Percentages are dimensionless quantities, since they are ratios of two quantities with the same dimensions. In other words, the % sign can be read as "hundredths", since 1% = 1/100. Taking a derivative with respect to a quantity adds the dimension of the variable one is differentiating with respect to, in the denominator. Thus: position has the dimension L. In economics, one distinguishes between stocks and flows: a stock has units of "units", while a flow is a derivative of a stock, has units of "units/time". In some contexts, dimensional quantities are expressed as dimensionless quantities or percentages by omitting some dimensions. For example, debt-to-GDP ratios are expressed as percentages: total debt outstanding divided by annual GDP – but one may argue that in comparing a stock to a flow, annual GDP should have dimensions of currency/time, thus Debt-to-GDP should have units of years, which indicates that Debt-to-GDP is the number of years needed for a constant GDP to pay the debt, if all GDP is spent on the debt and the debt is otherwise unchanged.
In dimensional analysis, a ratio which converts one unit of measure into another without changing the quantity is called a conversion factor. For example, kPa and bar are both units of pressure, 100 kPa = 1 bar; the rules of algebra allow both sides of an equation to be divided by the same expression, so this is equivalent to 100 kPa / 1 bar = 1. Since any quantity can be multiplied by 1 without changing it, the expression "100 kPa / 1 bar" can be used to convert from bars to kPa by multiplying it with the quantity to be converted, including units. For example, 5 bar × 100 kPa / 1 bar = 500 kPa because 5 × 100 / 1 = 500, bar/bar cancels out, so 5 bar = 500 kPa; the most basic rule of dimensional analysis is that of dimensional homogeneity. 1. Only commensurable quantities may be compared, added, or subtracted. However, the dimensions form an abelian group under multiplication, so: 2. One may take ratios of incommensurable quantities, multiply or divide them. For example, it makes no sense to ask whether 1 hour is more, the same, or less than 1 kilometer, as these have different dimensions, nor to add 1 hour to 1 kilometer.
However, it makes perfect sense to ask whether 1 mile is more, the same, or less than 1 kilometer being the same dimension of physical quantity though the units are different. On the other hand, if an object travels 100 km in 2 hours, one may divide these and conclude that the object's average speed was 50 km/h; the rule implies that in a physically mea
Head and shoulders (chart pattern)
On the technical analysis chart, the Head and shoulders formation occurs when a market trend is in the process of reversal either from a bullish or bearish trend. Head and Shoulders formation consists of a left shoulder, a head, a right shoulder and a line drawn as the neckline; the left shoulder is formed at the end of an extensive move. After the peak of the left shoulder is formed, there is a subsequent reaction and prices slide down to a certain extent which occurs on low volume; the prices rally up to form the head with normal or heavy volume and subsequent reaction downward is accompanied with lesser volume. The right shoulder is formed when prices move up again but remain below the central peak called the Head and fall down nearly equal to the first valley between the left shoulder and the head or at least below the peak of the left shoulder. Volume is lesser in the right shoulder formation compared to the left shoulder and the head formation. A neckline is drawn across the bottoms of the head and the right shoulder.
When prices break through this neckline and keep on falling after forming the right shoulder, it is the ultimate confirmation of the completion of the Head and Shoulders Top formation. It is quite possible that prices pull back to touch the neckline before continuing their declining trend; this formation is the inverse of a Head and Shoulders Top and indicates a change in the trend and the sentiment. The formation is upside down in which volume pattern is different from a Shoulder Top. Prices move up from first low with increase volume up to a level to complete the left shoulder formation and falls down to a new low, it follows by a recovery move, marked by somewhat more volume than seen before to complete the head formation. A corrective reaction on low volume occurs to start formation of the right shoulder and a sharp move up that must be on quite heavy volume breaks though the neckline. Another difference between the Head and Shoulders Top and Bottom is that the Top Formations are completed in a few weeks, whereas a Major Bottom takes a longer, as observed, may prolong for a period of several months or sometimes more than a year.
The drawn neckline of the pattern represents a support level, assumption cannot be taken that the Head and Shoulder formation is completed unless it is broken and such breakthrough may happen to be on more volume or may not be. The breakthrough should not be observed carelessly. A serious situation can occur; when a stock drifts through the neckline on small volume, there may be a wave up, although it is not certain, but it is observed, the rally does not cross the general level of the Neckline and before selling pressure increases, the steep decline occurs and prices tumble with greater volume. Most of the time Head and Shoulders are not shaped; this formation is tilted upward or downward. One shoulder may appear to droop. On many chart patterns, any one of the two shoulders may appear broader than the other, caused by the time involved in the formation of the valleys; the neckline may not be horizontal. If the neckline is ascending the only qualification of the formation lies in the fact that the lowest point of the right shoulder must be noticeably lower than the peak of the left shoulder.
Head and Shoulders is an useful tool after its confirmation to estimate and measure the minimum probable extent of the subsequent move from the neckline. To find the distance of subsequent move, measure the vertical distance from the peak of the head to the neckline. Measure this same distance down from the neckline beginning at the point where prices penetrate the neckline after the completion of the right shoulder; this gives the minimum objective of how far prices can decline after the completion of this top formation. If the price advance preceding the Head and Shoulders top is not long, the subsequent price fall after its completion may be small as well; this type of Head and Shoulders pattern head. It is known as Multiple Head and Shoulders pattern. Analyzing Chart Patterns: Head And Shoulders at investopedia.com
In finance, Fibonacci retracement is a method of technical analysis for determining support and resistance levels. They are named after their use of the Fibonacci sequence. Fibonacci retracement is based on the idea that markets will retrace a predictable portion of a move, after which they will continue to move in the original direction; the appearance of retracement can be ascribed to ordinary price volatility as described by Burton Malkiel, a Princeton economist in his book A Random Walk Down Wall Street, who found no reliable predictions in technical analysis methods taken as a whole. Malkiel argues that asset prices exhibit signs of random walk and that one cannot outperform market averages. Fibonacci retracement is created by taking two extreme points on a chart and dividing the vertical distance by the key Fibonacci ratios. 0.0% is considered to be the start of the retracement, while 100.0% is a complete reversal to the original part of the move. Once these levels are identified, horizontal lines are drawn and used to identify possible support and resistance levels.
The significance of such levels, could not be confirmed by examining the data. Arthur Merrill in Filtered Waves determined there is no reliably standard retracement: not 50%, 23.6%, 38.2%, 61.8%, nor any other. Fibonacci retracement is a popular tool that technical traders use to help identify strategic places for transactions, stop losses or target prices to help traders get in at a good price; the retracement concept is used in many indicators such as Tirone levels, Gartley patterns, Elliot Wave theory and more. After a significant movement in price the new support and resistance levels are at these lines. Unlike moving averages, Fibonacci retracement levels are static prices, they do not change. This allows quick and simple identification and allows traders and investors to react when price levels are tested; because these levels are inflection points, traders expect some type of price action, either a break or a rejection. The 0.618 Fibonacci retracement, used by stock analysts approximates to the "golden ratio".
Elliott wave principle Stevens, Leigh. Essential technical analysis: tools and techniques to spot market trends. New York: Wiley. ISBN 0-471-15279-X. OCLC 48532501. Brown, Constance M.. Fibonacci analysis. New York: Bloomberg Press. ISBN 1-57660-261-3. Posamentier, Alfred S.. The fabulous Fibonacci numbers. Amherst, NY: Prometheus Books. ISBN 1-59102-475-7. Malkiel, Burton. A random walk down Wall Street: the time-tested strategy for successful investing. OCLC 50919959. MFTA Pershikov, Viktor; the Complete Guide To Comprehensive Fibonacci Analysis on FOREX. ISBN 978-1607967606. Bhattacharya and Kumar, Kuldeep A computational exploration of the efficacy of Fibonacci sequences in technical analysis and trading. Annals of Economics and Finance, Volume 7, Issue 1, May 2006, pp. 219–230. Http://epublications.bond.edu.au/business_pubs/32/Chatterjee, Amitava, O. Felix Ayadi, Balasundram Maniam. "The Applications Of The Fibonacci Sequence And Elliott Wave Theory In Predicting The Security Price Movements: A Survey."
Journal of Commercial Banking and Finance 1: 65–76. Tai-Liang Chena, Ching-Hsue Chenga, Hia Jong Teoha. Fuzzy time-series based on Fibonacci sequence for stock price forecasting. Physica A: Statistical Mechanics and its Applications, Volume 380, 1 July 2007, Pages 377–390. Guide to Fibonacci Retracement Levels based on the Fibonacci Sequence at hotcandlestick.com Fibonacci Retracement: A Myth or Reality? at forexop.com What is Fibonacci retracement, where do the ratios that are used come from? at investopedia.com Fibonacci Retracements at stockcharts.com Number Sequence Fibonacci Retracement at tradersdaytrading.com Using the Fibonacci Line in Technical Analysis at xBinOp.com