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Credit: @BarChart ; read more patterns here In technical analysis, the open and close price of a market/stock price are important.  For example, Candlestick Analysis is mostly focused on the relationship between the open and the close. The open reflects the reaction to news overnight or pre-market .  The close reflects the reaction after the open . In general, a move higher after a weak open is positive and a move lower after a strong open is negative.  As a rule of thumb, you can use Candlestick to: Look for bullish hollow red at the market bottom Look for bearish solid black at the market top In this article, we will discuss the significance of first half hour in the opening and last half hour in the closing of stock trading. Accumulation and Distribution Here we will use Accumulation/Distribution as general terms (vs. a momentum  indicator ), which means whether investors are generally "accumulating," or buying, or "distributing," or selling, a cert...

The percentage of stocks trading above a specific moving average (or the degree of participation) is a breadth indicator that measures internal strength or weakness in the underlying index. The 50-day moving average is used for the short-medium term timeframe , while the 150-day and 200-day moving averages are used for the medium-long term timeframe . Signals can be derived from overbought/oversold levels, crosses above/below 50% and bullish/bearish divergences. $SPXA50R $SPXA50R   (S&P 500 %Above 50-day SMA) is a breadth indicator that measures the degree of participation and is used for the short-medium term timeframe . Participation would be deemed relatively weak if the S&P 500 moved above its 50-day moving average and only 40% of stocks were above their 50-day moving average . Conversely, participation would be deemed strong if the S&P 500 moved above its 50-day moving average and 60% or more of its components were also above their 50...

Updated Figure 1 on 02/25/2022 (Courtesy of stockcharts.com ) Updated Figure 2 on 02/25/2022 (Courtesy of stockcharts.com ) (Original article posted on 03/18/2018) Very basic forms of technical analysis—like trendlines, support and resistance, and flag/pennant formations—are pretty useful. Not because they work, but because people believe they work, so they work. Also, much of algorithmic trading is based on trading these sorts of technical formations. [4] In this article, we will cover the topics of using new 52-week highs and lows on the NYSE to monitor the internal strength or weakness of broad stock market. Figure 1.  $NYHL on 03/16/2018 $NYHL [1] Net New 52-Week Highs ( $NYHL; see Figure 1) is a simple breadth indicator found by subtracting new lows from new highs. “New lows” is the number of stocks recording new 52-week lows. “New highs” is the number of stocks making new 52-week highs. This indicator provides an immediate score for internal strength or wea...

(Updated 11/22/2021) When Jeremy Grantham was asked the below question: So you've called the Japanese bubble, the tech bubble, and the GFC. Is there a template to help uncover bubbles? And maybe, how were those bubbles different and how were they the same? His answer was: I think they're perfectly straightforward. They're intellectually easy and psychologically disastrously difficult. They're easy because in most cases they're so extreme . It's like how you notice the Himalayas when you're standing in Northern India. I mean, they come out of the plane and they soar up, you can't miss these things. 1928, '29 was just such a massive rally. So the sheer price rise you can't miss. Secondly, just to make it easier, the great bubbles have always tended to rise faster and faster towards the end , and that's a kind of defining feature also. And then thirdly, they have all been accompanied by massive, public, obvious crazy behavior where the headline...