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This Week's Lesson: Monday, February 08, 2016
A Treasure Trove of Technical Tools

While fundamentalists delve into economic and financial data to analyze the market, technicians employ indicators, so Tom Aspray details how he uses a combination of them in his daily analysis.

The starc bands are a technical tool that I use frequently. They help me determine whether a market is in a high risk buy area (overbought) or a low risk buy area (oversold). It is important to understand that just because a market is at its starc+ band, the market can still go higher but the probabilities do not favor it.

The regular formula, developed by the late Manning Stoller, adds or subtracts two times the average true range (ATR) from a six-period moving average. In his experience, a market should stay within these bands approximately 92% of the time. If instead you use three times the ATR, then prices should stay within the bands 99% of the time.

These bands are valuable on any stock, ETF, or market average but there is another tool that I use to help me determine when the overall market is overbought or oversold. This is the number of stocks in an average that are above their 50-day moving average. Of course, you can also look at this number relative to a 10- or a 200-day moving average.



Joseph Fahmy
How One Simple Trading Adjustment Made All the Difference TIPS FOR TRADERS
As a follow-up to last week's post, Joe Fahmy of illustrates how—for the first 12 of his 19 years as a trader—he would do well during market uptrends only to give back a good deal of profits during the corrections until he made this one simple adjustment.

Joe Burgoyne
Make 2016 a Year of Smart Investing with Equity Options Trading Lesson
ADVERTORIAL—Joe Burgoyne, of The Options Industry Council (OIC), thinks it's time for investors to stop being afraid every time the market moves (or doesn't). Instead, by taking advantage of these basic principles of options, investors can construct options strategies to realize many different outcomes in up, down, and sideways markets.

Trading Outlook for Today: February 08, 2016 VIDEO NETWORK
Daily Market Studies with Dan Gramza provides insights, considerations, and implications for trading futures and options on stock indexes, forex, grains, precious metals, and more.

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