Transcription
Rule #1 InvestingTechnical Indicators
Technical Indicators 3 Arrows Floors and Ceilings (FACs) Trendlines Fibonacci Retracements
Technical Indicators Where financial statements are the language ofinvesting, technical indicators are the language oftrading Technical Indicators help us see patterns
3 Arrows Used for broad based Mutual Funds and ETFs– Not for investing in individual companies Helps us see big institutional dollars sneaking in or out – we canfollow them Settings:– 10 period simple moving average (SMA)– MACD (8,17,9)– Slow Stochastics (14,5,0) 10 Year Monthly Chart
Testing the Arrows SPY – S&P 500 Index Exchange Traded Fund (ETF) Get in on 3 green arrows Get out on 3 red arrows Compare results using the arrows vs buy and hold
SPY Sep 2007 – Sep 2017
SPY Sep 2007 – Sep 2017
Arrows vs Buy and HoldSPYDATEPORTFOLIO BUYJan-00SHARES140 SELL714Sep-00Mar-021129012192134116 131,108146 158,197125 214,941203 325,620250 382,1831,604Aug-15Jul-16 101,7221,720Aug-11Feb-121101,084Dec-07Jun-09 103,5711,130Apr-05Jul-05145925Apr-02Apr-03 100,0002131,529Sep-17INNOWCAGRARROWS 100,000 382,1837.9%HOLD 100,000 178,5713.3%
Trendlines – Helpful for our Trades Helps us see the patterns that are already there – likelooking up in to the clouds and seeing a shape Nothing goes up or down in a straight line Trends:– Trending Up – higher highs and higher lows– Trending Down – lower highs and lower lows– Channeling – moving sideways
Up Trend
Down Trend
Channeling
Floors and Ceilings (FACs) At least 2 points of contact Areas where we’re not surprised when the pricesreverse – we expect it Very often Ceilings become Floors and Floorsbecome ceilings
FACs
Fibonacci Retracements Fibonacci Spiral is found all through nature, art,architecture Shows up in Stock Charts too Can use Fibonacci Retracements to help us see FACsthat may not be obvious at first glance Draw between a floor and a ceilingGenerally use a 6-9 month timeframeDay ChartLooking for a good fit
Fib Retracements
Technical Indicators Where financial statements are the language of investing, technical indicators are the language of trading Technical Indicators help us see patterns. 3 Arrows Used for broad based Mutual
