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

Top Five Investing Mistakes Made Preparing for Retirement

by Greg Morris

After 20 years in the money management business I saw these mistakes all too often.  Fortunately, this time, I’m not reciting the mistakes I have made in the past.  I certainly made some, but not these.  I’ll share those another time.   1 – The biggest and probably most common mistake is not beginning the process soon enough.  That doesn’t really sound like a pre-retirement mistake, but sadly when most folks start, it is too late.  It is difficult when young to think 40+ years down the road, but you must.  Prior to age 40 Read More 

Dancing with the Trend

Top 5 Investing Mistakes You Make When Young

by Greg Morris

I am not young anymore, so am going to reveal mistakes I made in the first half of my investing lifetime; about 1972 – 1990.  Sadly, I did not learn lessons quickly so repeated some of them.  These are not in any particular order.  A better title might be True Confessions.   1. Believing that I was right and the market was wrong.  I don’t know whether this is ignorance, arrogance, or what.  More than likely it is just lack of experience.  I would spend hours looking at charts and convincing myself what was going to happen; place a small trade, and Read More 

Dancing with the Trend

Will You Know When the Market Peaks?

by Greg Morris

The first thing you must realize is that you won’t know it is peaking until the decline is well underway.  Market tops are extremely difficult to identify.  That might seem hard to believe if you watch the financial media as those 'experts' are calling the top multiple times a day; like they have been doing for years.  And yes, they keep getting invited back.  With the art of hindsight, I have charted the past two bear market tops.  We can refer to them as bear market tops now, but back then you could not.  In Chart A, the March 2000 top is shown with data Read More 

Dancing with the Trend

A Reading List

by Greg Morris

In the 1970s there were very few books on technical analysis.  Now there a many great books available in the field of technical analysis and finance.  However, I’m going to keep these lists short and focused.  These lists contains many other wonderful books on technical analysis, finance, and behavioral analysis, but if I had to pick a library of only four books, this is it – Getting Started List. Getting Started List Kirkpatrick, Charles D. and Dahlquist, Julie R., 2016, Technical Analysis, Pearson Education, Upper Saddle River, NJ.  Read More 

Dancing with the Trend

You Need to Understand What Market Breadth Offers

by Greg Morris

Early in writing these articles I talked a lot about market internals or market breadth.  As a refresher, I’ll review the basics and then offer an opinion on why breadth is so important. Breadth Components Breadth components are readily available from newspapers, online sources, etc. and consist of daily and weekly statistics.  They are: Advances, Declines, Unchanged, Total Issues, Up Volume, Down Volume, Total Volume (V), New Highs, and New Lows.  From one day to the next, any issue can advance in price, decline in price, or remain unchanged.  Also any issue can Read More 

Dancing with the Trend

Know Thyself IV

by Greg Morris

This is the fourth article dealing with cognitive biases that totally screw up your decision making.  The first article, Know Thyself, covered anchoring, confirmation bias, herding, hindsight bias, overconfidence, and recency.  The second article, Know Thyself II, covered availability, calendar effects, cognitive dissonance, disposition effect, and loss aversion/risk aversion.  The third article, Know Thyself III, covered Communal Reinforcement, Endowment Effect, Halo Effect, Overreaction, Prospect Theory, Self-Attribution, and Self-Deception. Most of my education on Read More 

Dancing with the Trend

Academia

by Greg Morris

I’m on record in my book, “Investing with the Trend,” and probably in this blog of stating that Financial Academia is nothing more than the marketing department for Wall Street.  When I do presentations about technical analysis and / or money management, I always begin with this slide: Slide A That is usually an attention getter.  I state that this formula is what Academia wants you to think modern finance is about.  I’ll get back to that at the end of the article. My formal education was in aerospace engineering.  Read More 

Dancing with the Trend

Filtering the Noise III

by Greg Morris

First of all, I must apologize for my lack of creativity for these article titles.  The previous two “Filtering the Noise” and “Filtering the Noise II” were about moving averages and suggesting a better way to use a relationship between two moving averages, similar to the ubiquitous MACD.  In this creatively named article I will attempt to explain my process for finding the shorter-term average using detrending.  If you recall from the previous articles, once you have the shorter-term average, you then know the longer term one and the signal value.  Instead of rewriting Read More 

Dancing with the Trend

Filtering the Noise II

by Greg Morris

The first article of Filtering the Noise dealt with smoothing the data with moving averages.  Here I want to discuss a really popular concept popularized by an indicator called Moving Average Convergence Divergence or MACD.  MACD is a concept using two exponential averages developed by Gerald Appel. It was originally developed as the difference between the 12 and 26 day exponential averages; the same as a moving average crossover system with the periods of the two averages being 12 and 26. The resulting difference, called the MACD line, is then smoothed with a nine-day Read More 

Dancing with the Trend

Filtering the Noise

by Greg Morris

I have mentioned many times I that I basically only work with daily market data.  I do not have the personality to deal with intraday data and weekly data is only good for long term use.   I do have a few weekly data indicators that I use as overlays to my trend model, but the bulk of then are daily.  One of the concepts I think you must deal with when using daily data is to come up with a method that removes the noise.  Noise in this instance is very short term fluctuations in price. One of the most popular is the moving average; and it comes in many Read More 

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