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

High Low Validation

by Greg Morris

This is an attempt to help validate new high and new low data and, to be honest, is still a “work in progress.”   If you consider the facts relating to new highs and new lows, you will see the necessity for this.  A new high means that the closing price reached a high that it had not seen in the last year (52 weeks).  Similarly, a new low is at a low not seen for at least a year.  Note: This makes them very different than Advances, Declines, Up Volume, and Down Volume, which are based upon the difference over the previous day.  These indicators try to identify Read More 

Dancing with the Trend

Scrambling to Safety

by Greg Morris

Once a bear market gets underway (nautical term), few will make adjustments to their portfolio. Usually it is well into the decline before most even begin to get concerned, and then they are convincing themselves that it is too late and they might sell right at the bottom.  That is certainly the siren song of most.  Market tops are extremely difficult to identify except in that wonderful world many live in called hindsight.  Especially after an extended bull market well into its 7th year. Chart A is the Nasdaq Composite with its top in March Read More 

Dancing with the Trend

Technical Analysis and Its Return to Prominence

by Greg Morris

When I started in this business, most of my analysis was done with graph paper, colored pencils, and a very expensive red LED calculator (mid-1970s).  I subscribed to Barron’s and on Sunday afternoon would sit at my desk (which looked a lot like a kitchen table) and calculated various moving averages for the NYSE Index, the advance decline line (required a calculation of its own), and about 50 active stocks that I followed.  I would diligently plot them on graph paper as if they were to be preserved as future works of art. The bookstores in the Read More 

Dancing with the Trend

The Sales Pitches of Wall Street

by Greg Morris

I am on record for saying that academic finance is the marketing department for retail (sell side) Wall Street.  Note: Sell side is the secondary market where you buy and sell stocks; versus the primary market where capital is raised.  Over the years (notice I use that phrase often?) I kept a mental record of the things that clients have asked about in regard to the stock market.  Most of the time they were asking about things they were told by their advisor or brokerage salesman.  The best way to combat this misbelieving is to offer a counter to them. Read More 

Dancing with the Trend

Information - Actionable or Observable?

by Greg Morris

Back in the days of printed newspapers, magazines, and newsletters the acquisition of news and information was easier, or so it seemed.  The reason it seemed easier is that there was much less of it.  Today, with the internet, 24-hour financial media, blogs, and every conceivable method of acquisition, information is overwhelming.  Once I realized that some information was actionable and most of the rest was categorized as observable, then things became greatly simplified.  Hopefully this article will shed some light on how to separate actionable information from the Read More 

Dancing with the Trend

Survivorship Bias

by Greg Morris

The story about Abraham Wald’s work as a member of the Statistical Research Group during World War II can shed some light into money management (widely disseminated as Abraham Wald’s Memo).  Wald was tasked with damage assessments to aircraft that returned from service over Germany, and determine which areas of the aircraft structure should be better protected.  He found that the fuselage and fuel systems of returned planes were more likely to be damaged than the engines.  He made a totally unconventional assessment: Do not focus on the areas that sustained the most damage Read More 

Dancing with the Trend

Article Summaries 4-2016 to 7-2016

by Greg Morris

Most blog authors on StockCharts.com are writing about the current markets and do an exceptional job.   I do not write about the current markets as I wanted to share my experiences after 40+ years as a technical analyst.  Not only experiences with trading and investing, but model building and money management.  I also share the details of all the Master’s degrees I have – those expensive learning experiences that hopefully I learned something from.  Since I rarely go back into the archives of other’s blogs that I read, I wondered if that is common or not.  Read More 

Dancing with the Trend

Know Thyself III

by Greg Morris

This is the third 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.  Most of my education on behavioral investing came from books by James Montier, Hersh Shefrin, and Thomas Gilovich.  Two great websites for this stuff are from Tim Richards and Martin Sewell Read More 

Dancing with the Trend

WHY the Gap Between Analysis and Action?

by Greg Morris

When I started getting interested in technical analysis, there was no internet, no Amazon, only bookstores.  The investing section was usually quite small and the technical analysis sub-section only had a few books.  Fast forward today and things have changed considerably.  Fewer bookstores and most available online.  Amazon seems to dominate.  Technical analysis books are everywhere; you have your giant bible-like tomes from Kirkpatrick, Pring, and Murphy.  There are hundreds dedicated to a single discipline and there are still many in the “get rich quick” Read More 

Dancing with the Trend

WHY Are So Many Esoteric Things Attached to Technical Analysis?

by Greg Morris

I am not sure why there are so many vague and totally subjective analysis techniques that have become part of technical analysis.  Probably because the main stream Wall Street and their marketing department, academic finance, does not follow technical analysis like they do the accepted rubbish from the ivory towers.  Early in this WHY series I tried to be convincing that technical analysis’ basic premise is the analysis of price; price that is determined in the auction marketplace. As I have stated earlier (many times in fact) I believe technical Read More 

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