Hirsch - Stock Traders Almanac 2014

Copyright 2014 by John Wiley & Sons, Inc. All rights reserved.

Published by John Wiley & Sons, Inc., Hoboken, New Jersey

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ISBN: 978-1-118-65945-8 (cloth)

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This Forty-Seventh Edition is respectfully dedicated to:

John L. Person

John is a 34-year market veteran and industry icon, a brilliant speaker, educator, author, and a crack trader. He started on the floor of the Chicago Mercantile Exchange in 1979. He was the first ever to use the powerful combination of candlesticks and pivot points. His Person's Pivots and other technical indicators are on numerous trading platforms, including TD Ameritrade, TradeStation, Trade Navigator, and others.

We first became acquainted with John in 2002 at the New York Traders Expo, but it was not until we hit it off at the February 2007 Expo that we began exploring ways we could work together. John's deep knowledge of market history, cycles, seasonality, economics, stocks, options, futures, forex, and, most of all, technical analysis was mind-blowing. Our similar musical and movie tastes made it that much easier to work together. John and his wife, Mary, are gracious hosts and a joy to work with.

In 2009, we joined forces to revamp and produce the Commodity Trader's Almanac in what has become an invaluable partnership. For the past five years we have improved, tweaked, and beefed up the CTA. For 2014, it is morphing into a quarterly digital-only product. We look forward to its continued success. On page 36 we share some highlights.

On page 52 we have selected John's latest opus, Mastering the Stock Market: High Probability Market Timing & Stock Selection Tools as the Best Investment Book of the Year. On page 22 we impart some of John's trading tools and techniques.

Find out more at http://www.personsplanet.com/ .

INTRODUCTION TO THE FORTY-SEVENTH EDITION

We are pleased and proud to introduce the Forty-Seventh Edition of the Stock Trader's Almanac . The Almanac provides you with the necessary tools to invest successfully in the twenty-first century.

J. P. Morgan's classic retort, Stocks will fluctuate, is often quoted with a wink-of-the-eye implication that the only prediction one can make about the stock market is that it will go up, down, or sideways. Many investors agree that no one ever really knows which way the market will move. Nothing could be further from the truth.

We discovered that while stocks do indeed fluctuate, they do so in well-defined, often predictable patterns. These patterns recur too frequently to be the result of chance or coincidence. How else do we explain that since 1950 all the gains in the market were made during November through April, compared to a loss May through October? (See page 48.)

The Almanac is a practical investment tool. It alerts you to those little-known market patterns and tendencies on which shrewd professionals enhance profit potential. You will be able to forecast market trends with accuracy and confidence when you use the Almanac to help you understand:

• How our presidential elections affect the economy and the stock marketjust as the moon affects the tides. Many investors have made fortunes following the political cycle. You can be sure that money managers who control billions of dollars are also political cycle watchers. Astute people do not ignore a pattern that has been working effectively throughout most of our economic history.
• How the passage of the Twentieth Amendment to the Constitution fathered the January Barometer. This barometer has an outstanding record for predicting the general course of the stock market each year, with only seven major errors since 1950, for a 88.9% accuracy ratio. (See page 16.)
• Why there is a significant market bias at certain times of the day, week, month, and year.

Even if you are an investor who pays scant attention to cycles, indicators, and patterns, your investment survival could hinge on your interpretation of one of the recurring patterns found within these pages. One of the most intriguing and important patterns is the symbiotic relationship between Washington and Wall Street. Aside from the potential profitability in seasonal patterns, there's the pure joy of seeing the market very often do just what you expected.

The Stock Trader's Almanac is also an organizer. Its wealth of information is presented on a calendar basis. The Almanac puts investing in a business framework and makes investing easier because it:

• Updates investment knowledge and informs you of new techniques and tools.
• Is a monthly reminder and refresher course.
• Alerts you to both seasonal opportunities and dangers.
• Furnishes a historical viewpoint by providing pertinent statistics on past market performance.
• Supplies forms necessary for portfolio planning, record keeping, and tax preparation.

The WITCH icon signifies THIRD FRIDAY OF THE MONTH on calendar pages and alerts you to extraordinary volatility due to the expiration of equity and index options and index futures contracts. Triple-witching days appear during March, June, September, and December.