TAKE A TIP FROM THE FLEA

The first thing traders should learn from the flea is that when it is time to make a move into the market for a profit, or out to protect yourself from danger, let that move be like the flea's quick, clean and decisive. A flea never vacillates; every move has a purpose behind it. And as a result of his moves, and his quickness in making them, the flea gains a very satisfactory living for a small outlay of effort, and at a minimum risk to himself. If you don't believe his risk is small, just try to catch a flea! The flea promptly fastens himself on the most inaccessible portion of the Big Operator's back, where he can neither be reached nor shaken off. In other words, whenever and wherever the Big Operator moves, the flea moves right along with him. The Big Operator does all the work and assumes all the responsibility, while the flea feast in solid comfort! And while the Big Operator at times finds a collection of fleas on his back very annoying, and resorts to shake-outs, and other similar tricks to rid himself of them, the flea knows the tricks of the Big Operator as he should, and there is relatively small danger of being shaken off. The flea can tell by certain well known signals (resulting from manipulation) that the Big Operator is in the market, and when he sees these signals, he goes after him, and attaches himself, and rides him right through the campaign, and has the best meals and service provided free of charge (except for commissions). Richard D. Wyckoff

BOLLINGER BANDS

Bollinger Bands is a technical analysis technique in which lines are plotted two standard deviations above and below a moving average, and at the moving average itself. Because standard deviation measures volatility, these bands will be wider during increased volatility and narrower during decreased volatility. Some technical analysts consider a market which approaches the upper band to be overbought, and a market which approaches the lower band to be oversold.

CANDLES

Candles are a tool, not a system. Candle signals are unexcelled for spotting the early reversals, not to predict the extent of the move. Candles do not provide price targets, measured moves, looking for prior support and resistance areas, retracements and trend lines provided by Western technical analysis. Candlestick Chart is a form of Japanese charting that has become popular in the West. A narrow line (shadow) shows the session's price extremes (range). The shadow above the real body is called the upper shadow, and the shadow below the real body is the lower shadow. Accordingly, the peak of the upper shadow is the high of the session and the bottom of the lower shadow is the low of the session. If a candle body has no upper shadow, it is said to have a shaven head. A candle body with no lower shadow has a shaven bottom. A wider body marks the area between the open and the close. If the close is above the open, the body is not filled; if the close is below the open, the body is filled. The Japanese say the real body is the essence of the price movement. This reflects a central concept about the power of the real bodies. By looking at the height and body (filled versus unfilled) , we get an immediate visual signal whether it's the Bulls or Bears in control. Doji is a distinct trend change signal. A candlestick with a body so small that the open and close prices are equal. A Doji occurs when the open and close for that day are the same, or very close to being the same (churn). Candle patterns ...   http://www.candlesticker.com/BullishPatterns.aspx?lang=en 

TAPE TIPS

• Select only stocks that will move the soonest, fastest and farthest in Bear or Bull Markets; to limit losses and let profits run; and to make the most efficient use of investment capital (Trading in harmony with the Trend ).
• The true reason for today's fluctuations might not be known for days, weeks or months.
• Bad news generally comes out at the bottom and the good news at the top of the swings. The public usually buys on good news and sells on bad (trade on their emotions, not their judgment) Insiders and professionals do the opposite.
• Dow Theory places a high value on studying the action of the market's price movements, volume, and time based on the theory all the fundamental influences are already buried in the price before they become apparent.
• The action of the whole market tells you when the selling is better than the buying and vice versa. To become a successful trader, you must learn to judge by the action of the market. It is the action of the market which carries the greatest influence with insiders. Dow principle: The action of the market itself is the best indication of its future course.--Charts! Judge the market by the volume of transactions (light, medium, heavy) as well as the speed and momentum of the market in these various phases. Pay attention to the daily market volume and momentum particularly in the first and last hour.

TRADING SESSION

Go with the flow (trade in harmony with the market trend). The first hour of the trading session is the rudder for the day that furnishes clues about that day's direction, and the last hour is the confirmation for the day. The general rule is to sell in the first hour (prices normally spike during the first half hour), and buy in the last hour (erratic swings during the day settle in a final trading range between the high and low of the first hour). Likewise, the first Friday of the month may furnish us with clues for the month's direction, and the first month of the year may set the trend for the year.

FOUR YEAR PRESIDENTIAL CYCLE

The first year following the election year is usually a disaster (2009), and with the market bottoming around August of the second year (2010) and the rest of the year is bullish (2010), the third year is the best (2011), and the fourth year, the first half of the election year is choppy due to uncertainty and the second half is up (2012).