Dancing with the Trend

Greg Morris
About the author: has been a technical market analyst for over 40 years and is the author of several popular financial analysis books including Candlestick Charting Explained, Investing with the Trend and The Complete Guide to Market Breadth Indicators. Before retiring, he served as the Chief Technical Analyst and Chairman of the Investment Committee for a technical-based money management company with over $5.5 billion under management. Greg has appeared on CNBC, Fox Business, and Bloomberg Television and has also spoken at numerous financial conferences around the world.

Latest Posts

Dancing with the Trend

Zahorchak Revisited

by Greg Morris

A couple of years ago I introduced a trend following technique which I first learned in the late 1970s.  I thought this would be a good time to review it; especially since this technique is now available in StockCharts.com’s symbol catalog. A trend follower’s lament: “Only the market itself can tell you what to do.  Everything else is irrelevant.  While the irrelevant items tell you what the market ought to be doing, this may or may not be what it actually is doing.”  To determine what the market is doing compute the following: Read More 

Dancing with the Trend

The Wisdom of Montier

by Greg Morris

I honestly do not know when or where I first heard of James Montier but believe it was a turning point in my investing and money management.  Behavioral Finance / Investing is a relative newcomer to the world of investing, or at least the identification and writing about it.  The human frailties have always been here, we just didn’t have a word to describe them.  Plus, I have more than once mentioned James Montier’s latest book, “The Little Book of Behavioral Investing” in articles with the comment that you MUST read it and then plan on reading it once a year.  I first Read More 

Dancing with the Trend

Maintain a Proper Perspective

by Greg Morris

Watching the evening news can give you a misleading and often wrong perspective on the stock market.  Most commentators mention whether the Dow Jones Industrial Average was up or down and by how much, and that is just about the complete financial report, even though the Dow Jones’ 30 large blue-chip stocks do not give a good representation of the overall stock market.  It is a misguided focus. The Dow Jones Industrial Average was created by Charles Dow in 1896, originally 12 stocks, but currently consists of 30 stocks.  Because the evening news has focused on the Read More 

Dancing with the Trend

WHY Breadth?

by Greg Morris

I have written often about market internals or market breadth.  In fact, there was a whole series of articles as I was updating my “The Complete Guide to Market Breadth Indicators” book.  The articles began with CGMBI; there were 10 of them, all back near the beginning of my article list.  See links at end of this article. What you may not know is that every breadth indicator in the book is now part of StockCharts.com’s Symbol Catalog.  They all begin with !BI followed by two letters identifying the exchange they are from (NY for New York, NA for Nasdaq, and TO for Read More 

Dancing with the Trend

Aerodynamics for Investors

by Greg Morris

Oh no!  He is losing it!  I have stated a few times that the well seems to be running low; this article might confirm that.  Here is an attempt to turn basic aerodynamics into an investment process. Where:                CL is the coefficient of Lift                p is the density of air                V is the freestream Read More 

Dancing with the Trend

Gurus and Experts

by Greg Morris

Why do investors / traders like predictions?  The prediction industry is not just Wall Street, there are business forecasting companies, economic analysis and forecasting, sales forecasting, on and on.  However, Wall Street seems to have the least talent of the bunch.  Here are some reasons I think investors / traders like predictions: If the Investor loses money, they can blame the forecast.  Sad! Confidence in a forecast rises with the amount of information that goes into it. But the accuracy of the forecast stays the same Read More 

Dancing with the Trend

Fake News!

by Greg Morris

I have written about how inept the news is when it comes to the financial and stock markets before.  Since I am retired I am trying to wean myself from the news.  It isn’t easy as I’ve been a news junky for decades.  In this article, I’m going to stick to the news generated by the financial press even though I think news today has become unreliable and downright embarrassing.  I was watching a financial news show the other morning (Monday, Aug. 28) where the anchor speaks with a British accent.  He is quite good at his job but he is constantly trying to relate the Read More 

Dancing with the Trend

Misunderstanding Average

by Greg Morris

Did you hear about the six-foot tall Texan that drowned while wading across a stream that averaged only 3 feet deep?  The “World of Finance” is fraught with misleading information.  The use of average is one that needs a discussion. Figure A shows how easily it is to be confused over what is average.  And of course, this time it is intentional.  This example should put it in perspective.  You cannot relate rates of change linearly.  In Figure A, point A is 20 miles from point B. If you drive 60 mph going from point A to point B, but returning from point B to Read More 

Dancing with the Trend

Bear Market Preparedness

by Greg Morris

Here is the scenario: You believe we are near a top in the market.  I won’t bother to discuss what makes you think that, but if you do, then here is a sampling of things to consider.  I was originally going to do this in an enumerated list, but decided my rambling would be better. I know you have stops on all of your holdings, so I won’t spend much time on that.  However, just in case you don’t; this would be the time to do so.  Personally, I use a moving stop that is a percentage below a previous high price.  For example, if my model has me fully invested, that Read More 

Dancing with the Trend

What Will You do When the Bear Arrives?

by Greg Morris

I would imagine there are many readers that are fairly new to market analysis and in particular, technical analysis.  We have had 10 bear markets in the S&P 500 Index since 12/30/1927 and 15 bear markets in the Dow Jones Industrial Average since 2/17/1885.  A bear market is defined as a drop of over 20% from the previous high.  Not sure who said or claimed this, but I’m accepting it.  Our last bear market lasted from 10/9/2007 until 3/9/2009 (top to bottom).  If you have not been an investor or trader during a bear market (last 8+ years), then you have missed Read More 

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