Technical Analysis: Power Tools for Active Investors (paperback)

Unlike most technical analysis books, Gerald Appel's Practical Power Tools! offers step-by-step instructions virtually any investor can use to achieve breakthrough success in the market. Appel illuminates a wide range of strategies and timing models, demystifying even advanced technical analysis the first time. Among the models he covers: NASDAQ/NYSE Relative Strength, 3-5 Year Treasury Notes, Triple Momentum, Seasonality, Breadth-Thrust Impulse, and models based on the revolutionary MACD techniques he personally invented. Appel covers momentum and trend of price movement, time and calendar cycles, predictive chart patterns, relative strength, analysis of internal vs. external markets, market breadth, moving averages, trading channels, overbought/oversold indicators, Trin, VIX, major term buy signals, major term sell signals, moving average trading channels, stock market synergy, and much more. He presents techniques for short-, intermediate-, and long-term investors, and even for mutual fund investors.

Table of Contents:
Foreword. Acknowledgments. Introduction. The No-Frills Investment Strategy. Picking the Right Investment Vehicles.       Risk: Reward Comparisons Between More Volatile and Less Volatile Equity Mutual Fund Portfolios       Gain/Pain Ratios       Drawdown: The Measure of Ultimate Risk       The End Result: Less Is More       Changing Your Bets While the Race Is Still Underway       Relative Strength Investing     Testing the Relative Strength Investment Strategy: A 14-Year Performance Record of Relative Strength Investing      Results of Quarterly Reranking and Quarterly Rebalancing (1990-2003)       Buy-and-Hold Results: The Standard & Poor's 500 Benchmark       Increasing the Risk: Maintaining a Portfolio of Somewhat More Aggressive Mutual Funds       Observations       Upping the Ante: The Effects of Applying the Concepts of       Relative Strength Selection to a Still More Volatile Portfolio of Mutual Funds       General Observations       A Quick Review of Relative Strength Investing       Summing Up Two Quick-and-Dirty Stock Market Mood Indicators.     Identifying High- and Low-Risk Investment Climates     The Nasdaq/New York Stock Exchange Index Relative Strength Indicator     The Maintenance and Interpretation of the Nasdaq/NYSE Index Relative Strength Indicator     Observations     Measuring the Market Mood with the Intermediate Monetary Filter     The Monetary Model     The Ingredients     The Calculation and Rules of the Intermediate Monetary Filter     Observations     Combining the Two Indicators     Point and Counterpoint     Observations     A Final Long-Term Statistic     Summing Up Moving Averages and Rates of Change: Tracking Trend and Momentum.     The Purpose of Moving Averages     The Intermediate-Term Moving Average     The Long-Term 200-Day Moving Average     Using Weekly-Based Longer-Term Moving Averages     Moving Averages and Very Long-Term Moving Averages     Moving Averages: Myths and Misconceptions     Using Moving Averages to Identify the Four Stages of the Market Cycle     Stage 1     Patterns of Moving Averages During Stage 1     Stage 2     Patterns of Moving Averages During Stage 2 Advances     Stage 3     Patterns of Moving Averages During Stage 3 Distribution Periods     Stage 4     The Rate of Change Indicator: How to Measure and Analyze the Momentum of the Stock Market     The Concept and Maintenance of the Rate of Change Indicator     Constructing Rate of Change Measurements     Bull Market and Bear Market Rate of Change Patterns     Adjusting Overbought and Oversold Rate of Change Levels for Market Trend     Looking Deeper into Levels of the Rate of Change Indicator     The Triple Momentum Nasdaq Index Trading Model     Maintenance Procedure     Notes Regarding Research Structure     Rate of Change Patterns and the Four Stages of the Stock Market Cycle More Than Just Pretty Pictures: Power Tool Chart Patterns.     The Concept of Synergy     Powerful Chart Formations     Example 1     Example 2     Example 3     The Wedge Formation: Times to Accumulate and Times to Distribute Stocks     The Wedge Formation     Declining Wedge Formations     Appropriate Strategies     Synergy in Chart Patterns     Head and Shoulder Formations     Using the Head and Shoulder Formation to Establish Downside Price Objectives     At Market Bottoms, the Inverse Head and Shoulder Formation     Confirmation by Measures of Market Momentum     Volume Spikes Are Very Bullish If the Stock Market Has Been in Decline     The Selling Climax     Support and Resistance Levels     Support Zones     Support Zones     Resistance Zones     Example: The 1999-2003 Stock Market Climate (Chart 4.4)     Market Downtrends     Major Trend Synergy in Action     Tricks with Trendlines     Inverse Trendline Support and Resistance Zones     Channel Support and Resistance     Early Warnings Provided by Channel Patterns     Extended Channel Support     Rising Resistance Zones     False Breakouts and Breakdowns: Key Market Patterns     A Significant Sell Signal     A Significant Buy Signal     The Key Political, Seasonal, and Time Cycles: Riding the Tides of Market Wave Movements.     Calendar-Based Cycles in the Stock Market     Days of the Month     Pre-Holiday Pattern     The Best and Worst Months of the Year     The Best Six-Month Period, the Worst Six-Month Period     Evaluating the Tabulations     The Presidential Stock Market Cycle     Comments     Time Cycles: Four Days to Four Years     Example of Market Cycles: The 53-Day Market Cycle     Segments of Market Cycles     The Significance of Segmentation     Distinguishing Bullish Cyclical Patterns from Bearish Patterns     Lest We Forget the Concept of Synergy...     Lengths of Market Cycles     The Very Significant and Regular Four-Year Market Cycle     An Intermediate Market Cycle with a Confirming Indicator     How the Confirming Indicator Helps the Cause     The August-September Cycle     The October-November Cycle     The November to Early January Market Cycle     The January-March Cycle       The 18-Month Market Cycle with a Rate of Change Confirming Indicator       Synergy Between Rates of Change and Cyclical Patterns       Enter the Rate of Change Indicator       For Future Readers of This Work       Day Trading with Short-Term Cycles       T-Formation: The Ultimate Cyclical Power Tool?       The Construction of T-Formations       Area 1       Area 2       Area 3       Area 4       Further Examples of T-Formations, Including the Application of Synergy       T-Formations and Mirror Patterns of Stock Movement       T-Formations and Longer-Term Time Periods       Supplemental Indicators       One Final Set of T-Formations       In Summary       Seasonal and Calendar Influences on the Stock Market       Time Cycles       T-Formations Bottom Fishing, Top Spotting, Staying the Course: Power Tools That Combine Momentum Oscillators with Market Breadth Measurements for Improved Market Timing.       A Quick Review of Where We Have Been       The "Internal" as Opposed to the "External" Stock Market       Measures of Market Breadth     New Highs and New Lows     New High/New Low Confirmations of Price Trends in the Stock Market     Positive and Negative Confirmations, 1995-2004     New Lows at a Developing Stock Market Bottom     Creating a New High/New Low Indicator to Keep You in the Stock Market When the Odds Heavily Favor the Stock Market Investor     Method of Interpretation     The Application of the New High/(New Highs + New Lows) Indicator to the Nasdaq Composite     Pre-Bear Market Comparisons       The New York Stock Exchange Advance-Decline Line       Relating to Advance-Decline Breadth Data       General Observations       Chart 6.4: The Advance-Decline Line Between 2002 and 2004       The 21-Day Rate of Change of the Advance-Decline Line     Overbought Levels     Oversold Levels       Breadth Patterns at Bull Market Highs 1997-2000: A Period of Breadth Transition       A Change in Tone       A Major Negative Breadth Divergence Followed       Using a Somewhat More Sensitive Rate of Change Measure of the Advance-Decline Line       The Ten-Day Rate of Change Indicator       The Weekly Impulse Continuation Signal       But First, an Introduction to the Exponential Moving Average       The Smoothing Constant of Exponential Averages       Example 1       Example 2       Example 3       Stabilizing the Exponential Average       Some Special Qualities of Exponential Moving Averages       The Weekly Impulse Signal The Required Items of Data Each Week       Buy and Sell Signals       General Concept of the Weekly Breadth Impulse Signal       Final Comments       The Daily-Based Breadth Impulse Signal       The Construction and Maintenance of the Daily-Based Breadth Impulse Signal       The Performance Record of the Daily Breadth Impulse Signal       The Application of the Daily-Based Breadth Impulse Signal to Trading the Nasdaq Composite Index       Caveat Volume Extremes, Volatility, and VIX: Recognizing Climactic Levels and Buying Opportunities at Market Low Points.       Market Tops: Calm Before the Storm; Market Bottoms: Storm Before the Calm       TRIN: An All-Purpose Market Mood Indicator       The Data Required to Compute TRIN       Calculating TRIN       Interpreting TRIN Levels       TRIN as a Bottom Finding Tool       The Volatility Index (VIX) and Significant Stock Market Buying Zones       The Volatility Index       Theoretical Pricing of Options       Implied Volatility       Ranges of VIX       Bullish Vibes from VIX       Summing Up       The Major Reversal Volatility Model       Calculating the Major Reversal Volatility Model       Major Market-Reversal Buy Signals     The 1970-1979 Decade     The 1979-1989 Decade     The 1989-1999 Decade     Post-1999: Mixed Results       The Ideal Scenario Advanced Moving Average Convergence-Divergence (MACD): The Ultimate Market Timing Indicator?       Scope of Discussion       The Basic Construction of the Moving Average Convergence-Divergence Indicator       Basic Concepts       Trend Confirmation       The Signal Line       Very Important Supplementary Buy and Sell Rules       Rationale for Supplementary Rules       Using Divergences to Recognize the Most Reliable Signals       Additional Examples       Improving MACD Signals by Using Different MACD Combinations for Buying and Selling       Two MACD Combinations Are Often Better Than One       MACD During Strong Market Uptrends       MACD During Market Downtrends       Modifying MACD Rules to Secure the Most from Strong Market Advances     Reviewing Chart 8.9     Market Entry Supported by Positive Divergence     Moving Averages, MACD Patterns Confirm Advance     Initial Sell Signal Not Reinforced by Any Negative Divergence     Secondary Sell Signal Confirmed by Negative Divergence     Use Moving Average as Back-Up Stop Signal       The Stop-Loss When Trades Prove Unsuccessful       Synergy: MACD Confirmed by Other Technical Tools       MACD Patterns Confirmed by Cyclical Studies       When the MACD Does Not Provide the Most Timely Signals       Money Management with the MACD (and Other Indicators)       An MACD Configuration That Suggests More Active Selling       MACD Through the Years: Long Term, Short Term, and Intraday       The Start of a Bull Market       An Example of the MACD Stop-Loss Signal in Action       MACD Employed for Day-Trading Purposes       MACD and Major Market Trends       The Amazing Ability of the MACD to Identify Significant Market Low Points Following Severe Stock Market Declines       MACD Patterns and Significant Market Bottoms       Initial Rally at Start of Year       Brief Decline and Well-Timed Market Re-Entry       Rally and Topping Formation       Waterfall Decline, and Then Bottoming Process       Final Shakeout and Recovery       MACD and the Four Stages of the Market Cycle       Reviewing Rules and Procedures Associated with the MACD Indicator       Creating and Maintaining Your MACD Indicator       Buy Signals       Prerequisite       Sell Signals       Converting the Daily Breadth Thrust Model into an Intermediate Entry       Buy Signals       Sell Signals       Providing That...       Summary of Results       MACD Filtered Breadth Thrust Applied to the Nasdaq Composite Index Moving Average Trading Channels: Using Yesterday's Action to Call Tomorrow's Turns.     The Basic Ingredients of the Moving Average Trading Channel     Creating the Channel     What Length of Offset Should Be Used?     Moving Average Trading Channels in Operation     Area A: The Chart Opens with a Market Downtrend     Area B: The First Recovery Rally     Area X: The Technical Picture Improves     Area D: The Upper Trading Band Is Reached     Area E: Prices Retrace to the Center Channel     Area F: Improving Market Momentum Confirmed     Bullish Indications     Area G: The Center Line of the Moving Average Trading Channel     Area H: Warning Signs     Area I to J: One Final Attempt That Fails     The Basic Concept     The Evolution of Phases Within the Moving Average Trading Channel     A Classic Topping Formation to End a Major Bull Market     Chart 9.2: The Ingredients     January 2000: The Bull Market in Nasdaq Moves Along Steadily     Area E: The Fun and Games of the Bull Market Come to an End     Area F: Trend Reversal Is Confirmed and Completed     The Development of a Bottom Formation     Moving Average Channels and the Major Trend     1996-1998: Strong Bullish Upthrust     The First Correction Stops at the Center Channel Line     Resurgence of Market Advance     Technical Warnings Develop     The Top Formation Moves Along     Major Downtrend Gets Seriously Underway     Patterns Suggest a Phasing-Out of Long Positions     Significant Downturn Is Confirmed     How to Construct a Price/Moving Average Differential Oscillator     A Review of the Key Rules Associated with Moving Average Trading Band Trading Putting It All Together: Organizing Your Market Strategies.     The First Step: Define the Major Trend and Major Term Cycles of the Stock Market     The Second Step: Check Out Market Mood Indicators and Seasonal Cycles     The Third Step: Establish the Direction and Strength of the Current Intermediate Trend and Try to Project the Time and Place of the Next Intermediate-Term Reversal Area     The Fourth Step: Fine-Tune Your Intermediate-Term Studies with Studies Based on Shorter-Term Daily-or Even Hourly-Market Readings     Remember Our Favorite Mutual Fund Selection Strategy!     Lessons I Have Learned During 40 Years as a Trader     Recommended Reading and Resources     Charting Resources     Sources for Research     Books Relating to Technical Analysis     Investment Newsletters Index.

About the Author :
About the Author Gerald Appel has, since 1973, published Systems and Forecasts, a leading technical analysis publication. Appel is legendary for his work in technical analysis and market timing, including the creation of Moving Average Convergence-Divergence (MACD), one of the field's most widely used tools. His numerous books include, among others, Winning Market Systems: 83 Ways to Beat the Market, Stock Market Trading Systems (with Fred Hitschler), New Directions in Technical Analysis (with Dr. Martin Zweig), The Big Move, and Time-Trend III. His company, Signalert Corporation, and affiliates, currently manages more than $550,000,000 in investor capital. Appel has trained thousands of traders through his world-renowned video and audio tapes, seminars, and workbooks. He recently taught a series of four-day international master classes on investing and trading strategies in partnership with Dr. Alex Elder. As Appel puts it, "I have never lost anything by giving ideas away. If people find it useful, it makes me feel good." © Copyright Pearson Education. All rights reserved.

Review :
FROM STOCK TRADER'S ALMANAC 2006:   "The best investment book of the year"   FROM SFO MAGAZINE, (www.sfomag.com)   "Wisdom gained from three decades of studying stock markets and creating timing indicators is what you will find in Gerald Appel's latest book. ... This book is a master technician's superb source of well-crafted ideas for timing indicators."                                             --George A. Schade, CMT