Chap007 - Chapter 8 Stock Price Behavior and Market...

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Chapter 8 Stock Price Behavior and Market Efficiency Slides: 8-1 Fundamentals of Investments 8-2 Quotation 8-3 Controversy, Intrigue, and Confusion 8-4 Technical Analysis 8-5 Dow Theory, I. 8-6 Dow Theory, II. 8-7 Dow Theory, III. 8-8 Support and Resistance Levels 8-9 Market Diaries, A Collection of Technical Indicators 8-10 Technical Indicators, Notes 8-11 Charting, Relative Strength 8-12 Charting, Moving Averages 8-13 Example: 15-Day and 50-Day Moving Averages 8-14 More Chart Types 8-15 Candlestick Making, Basics 8-16 Candlestick “Formations” 8-17 Point and Figure Charts, I. 8-18 Point and Figure Charts, II. 8-19 Point and Figure Charts, III. 8-20 Chart Formations 8-21 Chart Formations, The Head and Shoulders 8-22 Other Technical Indicators 8-23 Market Efficiency 8-24 What Does “Beat the Market” Mean? 8-25 Forms of Market Efficiency, (i.e., what information is used?) 8-26 Why Would a Market be Efficient? 8-27 Are Financial Markets Efficient? 8-28 Are Financial Markets Efficient? 8-29 Some Implications if Markets are Efficient 8-30 Stock Price Behavior and Market Efficiency 8-31 The Amazing January Effect, I. 8-32 The Amazing January Effect, II. 8-33 The Market Crash in October 1987 8-34 The Performance of Professional Money Managers 8-35 Useful Internet Sites 8-36 Chapter Review, I. 8-37 Chapter Review, II.
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A-67 Chapter 8 Chapter Organization 8.1 Technical Analysis A. Dow Theory B. Support and Resistance Levels C. Technical Indicators D. Charting E. Relative Strength Charts F. Moving Average Charts G. Hi-Lo-Close And Candlestick Charts H. Point-and-Figure Charts I. Chart Formations J. Other Technical Indicators 8.2 Market Efficiency A. What does “Beat the Market” Mean? B. Forms of Market Efficiency C. Why Would a Market be Efficient? D. Are Financial Markets Efficient? E. Some Implications of Market Efficiency 8.3 Stock Price Behavior and Market Efficiency A. The Day-of-the-Week Effect B. The Amazing January Effect C. The October 1987 Crash D. Performance of Professional Money Managers 8.4 Summary and Conclusions Selected Web Sites Technical Analysis Websites: Dow Theory: www.dowtheory.com www.thedowtheory.com Glossary of terms: www.e-analytics.com Drawing charts: stockcharts.com www.bigcharts.com finance.yahoo.com Charts and other indicators: www.prophet.net www.stockta.com Chart patterns: www.chartpatterns.com Market Efficiency: Is astrology useful? ( ed. No.) www.afund.com
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Stock Price Behavior and Market Efficiency A-68 Annotated Chapter Outline 8.1 Technical Analysis Technical analysis : Techniques for predicting market direction based on (1) historical price and volume behavior, and (2) investor sentiment. The previous chapters discussed fundamental analysis; this chapter now addresses technical analysis. Technical analysts search for bullish or bearish signals, or indicators, about stock prices and market direction. The field of technical analysis is huge, with many books written on the subject. This chapter just touches on the highlights of some of the methods. Technical analysis is also very popular in futures markets. Therefore, much of this discussion also applies
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