Technical Analysis

Charles D. Kirkpatrick II, CMT, is President, Kirkpatrick & Company, Inc., Kittery, Maine--a private firm specializing in technical research; editor and publisher of the Market Strategist newsletter. Adjunct Professor of Finance, Brandeis University International School of Business, Waltham, Massachusetts. Director and Vice President, Market Technicians Association Educational Foundation, Cambridge, Massachusetts--a charitable foundation dedicated to encouraging and providing educational courses in technical analysis at the college and university level. Past editor, Journal of Technical Analysis, New York, New York--the official journal of technical analysis research. Past director, Market Technicians Association, New York, New York--an association of professional technical analysts. In his life in the stock and options markets, Mr. Kirkpatrick has been a hedge fund manager, investment advisor, advisor to floor and desk traders and portfolio managers, institutional stock broker, options trader, desk and large-block trader, lecturer and speaker on aspects of technical analysis to professional and academic groups, expert legal witness on the stock market, owner of several small businesses, owner of an institutional brokerage firm, and part owner of a CBOE options trading firm. His research has been published in Barron’s and elsewhere. In 1993 and 2001, he won the Charles H. Dow Award for excellence in technical research, and in 2009, he won the MTA award for his contributions to technical analysis. Educated at Phillips Exeter Academy, Harvard College (A.B.) and the Wharton School of the University of Pennsylvania (M.B.A.), he was also a decorated combat officer with the 1st Cavalry Division in Vietnam. He currently resides in Maine with his wife, Ellie, and their various domestic animals.   Julie R. Dahlquist, Ph.D., received her B.B.A. in economics from University of Louisiana at Monroe, her M.A. in Theology from St. Mary’s University, and her Ph.D. in economics from Texas A&M University. Currently, she is a senior lecturer, Department of Finance, at the University of Texas at San Antonio College of Business. Dr. Dahlquist is a frequent presenter at national and international conferences. She is the coauthor (with Richard Bauer) of Technical Market Indicators: Analysis and Performance (John Wiley & Sons). Her research has appeared in Financial Analysts Journal, Journal of Technical Analysis, Managerial Finance, Applied Economics, Working Money, Financial Practices and Education, Active Trader, and in the Journal of Financial Education. She serves on the Board of the Market Technicians Association Educational Foundation, on the editorial board of the Southwestern Business Administration Journal, and as a reviewer for a number of journals, including the Journal of Technical Analysis. She resides in San Antonio with her husband, Richard Bauer, and their two children, Katherine and Sepp.  

Part I     Introduction     1

1     Introduction to Technical Analysis     3

2     The Basic Principle of Technical Analysis--The Trend     9

3     History of Technical Analysis     23

4     The Technical Analysis Controversy     33

Part II     Markets and Market Indicators     55

5     An Overview of Markets     57

6     Dow Theory     75

7     Sentiment     89

8     Measuring Market Strength     131

9     Temporal Patterns and Cycles     163

10     Flow of Funds     177

Part III     Trend Analysis     197

11     History and Construction of Charts     199

12     Trends--The Basics     223

13     Breakouts, Stops, and Retracements     255

14     Moving Averages     275

Part IV     Chart Pattern Analysis     299

15     Bar Chart Patterns     301

16     Point-and-Figure Chart Patterns     335

17     Short-Term Patterns     359

Part V     Trend Confirmation     405

18     Confirmation     407

Part VI     Other Technical Methods and Rules     447

19     Cycles     449

20     Elliott, Fibonacci, and Gann     477

Part VII     Selection     501

21     Selection of Markets and Issues: Trading and Investing     503

Part VIII     System Testing and Management     527

22     System Design and Testing     529

23     Money and Risk Management     559

Part IX     Appendices     579

A     Basic Statistics     581

B     Types of Orders and Other Trader Terminology     607

Bibliography     611

Index     637