Editor’s note: In Bollinger on Bollinger Bands, there were “15 Basic Rules” included, a list that has grown to 22 as John incorporated new experience and insights into his work. Bollinger Bands® were created by John Bollinger, CFA, CMT and published in 1983. They were developed in an effort to create fully-adaptive trading bands. The following rules covering the use of Bollinger Bands were gleaned from the questions users have asked most often and our experience over 30 years with Bollinger Bands. Bollinger Bands provide a relative definition of high and low. By definition price is high at the upper band and low at the lower band. That relative definition can be used to compare price action and indicator action to arrive at rigorous buy and sell decisions. Appropriate indicators can be derived from momentum, volume, sentiment, open interest, inter-market data, etc. If more than one indicator is used the indicators should not be directly

The investment community lost one of its leaders in February when Dr. Martin Zweig passed away. Dr. Zweig contributed to the acceptance of market timing in the 1980’s. He achieved success with an advisory service and managing money in private accounts and closed end mutual funds. His award recognizes that, “He was one of the first practitioners of technical analysis to validate his research with solid statistical evaluation and subject his work to the rigors of academic challenge and debate. His testing work set the rigorous standard that we now employ in evaluating papers for the Journal and the Charles Dow Award.” Dr. Zweig completed his bachelor’s degree at University of Pennsylvania’s Wharton School of Finance and then earned an MBA at the University of Miami before completing a Ph.D. in finance at Michigan State University. His doctoral thesis, written in the late 1960’s, was on relative strength. In the early 1970’s,

Editor’s note: this is an example of Susan’s work. It is interesting to see how it applies the fundamentals defined by Edwards and Magee. Dow Theory (prepared January 7, 2013) The Dow Theory is supposed to be intermediate in nature. However, the possibility of a Major Base Breakout in the Transportation Average seems to make it more significant.  A break above 13650 on the Dow Jones Industrial Average and a break above 5600 in the Transportation Average would qualify as a Dow Theory bullish signal. Russell 2000 Small Cap Index There is no other way to classify the chart than Strong. This is backed up by the growing list of individual stocks that are also very attractive. S&P Mid Cap Index This index also has had a bullish resolution to a two year Ascending Triangle. I screened the Mid Cap Indexes for buys and I added a lot. I want to highlight the majority of these emerging strong

Editor’s note: This paper was recently published at the Social Science Research Network, http://go.mta.org/3437. It presents an academic view of how technical analysis contributes to the performance of professional money managers. An experienced money manager who uses technical analysis reviewed the paper and commented that, “The really striking thing about the results is how much higher skew and kurtosis are with managers using technical analysis. So, while the returns are slightly better, the shape of the returns is very different. Positive skew basically means that the losers are small, while there are occasional big winners. More of the distribution is positive. It suggests to me that technically oriented managers are cutting their losses and letting their profits run. High kurtosis (leptokurtic) indicates a high, narrow distribution of returns. It means that a lot of trades are clustered around the mean return. It suggests to me that technical traders have a lot of

I offer this parabolic article exactly 1 year after my previous parabolic article in Technically Speaking, Mar 2012, which can be used as a reference for this article. INTRODUCTION As of this writing (February 25, 2013), the S&P 500 is precariously dancing just underneath massive resistance from the preceding towering highs of 2000 and 2007. It is only natural to conjure several, or perhaps many, realistic possibilities for the market at this juncture, such as a triple top with a crushing downtrend back to major support (with a parallel double-top for the Dow), or perhaps a lesser correction followed by a successful break of resistance and a new extended bull run. In this article, I’ll offer a parabolic perspective utilizing ‘the third’ which graphically outlines both of these possibilities by: Clearly identifying current price and all major reversals (and some minor) as harmonically tied to the low of 102.00 of Aug 1982 via fractional relationships. Extrapolating