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Glossary

VIX: The Chicago Board of Options Volatility Index. Useful for

detecting panic lows. Volatility: The tendency for prices to vary. There are many

measures of volatility. Standard deviation is one of the more

popular.

Volatility-Breakout Systems: Trading systems designed to trigger when volatility exceeds a certain level. The most interesting of these require that volatility be low to start with.

Volume: The number of transactions or the quantity of items traded in a given period.

Volume Indicators: Technical indicators designed to get to the heart of the supply-demand equation by integrating volume.

Volume-Price Trend: A variation on On Balance Volume developed by David Markstein that uses percent change in the calculation.

Volume-Weighted MACD: A version of MACD developed by Buff Dormeier that uses volume-weighted averages rather than exponential averages.

Warrants: Essentially, long-term options.

Washout: A sell-off that leads to a total lack of interest, an

abandoning of hope. Often the first stage of a base-building

process that leads to a rally. W Bottom: The most typical bottom formation. An initial low

point followed by a rally and a retest of the low. Generally in

the shape of a capital W. Wedge: A consolidation pattern typically characterized by rising

bottoms or declining tops. Weighted Moving Average: A moving average in which the

weights assigned to each day in the calculation are different. A

typical version is the front-weighted moving average in which

the most recent periods figure more heavily in the calculation

than prior periods. Whipsaw: A sell followed immediately by a buy, or vice versa.

Often expensive due to transaction costs. Wyckoff, Richard D.: A technical analyst operating in the early

part of the twentieth century whose work stands out even

after all these years.



Glossary

Yield Curve: A depiction of interest rate levels versus maturities in graphic form with short-term rates at the left and long-term rates at the right. Generally, Treasury debt is the subject. In normal times, short-term rates are lower than long-term rates. Thus, the curve rises from left to right and is said to be positively sloped.

Zigzag: An alternating pattern of advances followed by declines typically defined by some minimum price swing.



BIBLIOGRAPHY

Bollinger, John, "Volume Indicators," Bollinger Capital, 2000.

Burke, Michael, The All New Guide to the Three-Point Reversal Method of Point & Figure Construction and Formulas, ChartCraft, New Rochelle, N.Y., 1990.

Cahen, Philippe, "Analyse Technique Dynamique," Economica, 1999.

Crane, Burton, The Sophisticated Investor, Simon and Schuster, New York, 1959.

deVilliers, Victor, The Point and Figure Method of Anticipating Common Stock Price Movements, 1933, reprinted Windsor Books, New York.

Douglas, Mark, The Disciplined Trader, New York Institute of Finance, New York, 1990.



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