Robert D. Edwards - Technical Analysis of Stock Trends

Technical Analysis of Stock Trends

Eleventh Edition

Technical Analysis of Stock Trends

Eleventh Edition

Robert D. Edwards

John Magee

W. H. C. Bassetti

Routledge

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Library of Congress Cataloguing-in-Publication Data

Names: Edwards, Robert D. (Robert Davis), 1893- author. | Magee, John, 1901- author. | Bassetti, W. H. C., author.

Title: Technical analysis of stock trends / Robert D. Edwards, John Magee, W.H.C. Bassetti.

Description: Eleventh Edition. | New York : CRC Press, [2018] | Revised edition of the authors Technical analysis of stock trends, c2013. | Includes bibliographical references and index.

Identifiers: LCCN 2018010151 | ISBN 9781138069411 (hardback : alk. paper)

Subjects: LCSH: Investment analysis. | Stock exchanges--United States. | Securities--United States.

Classification: LCC HG4521 .E38 2018 | DDC 332.63/20420973--dc23

LC record available at https://lccn.loc.gov/2018010151

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Figure 0.1 DOW 25000! What a birthday present for the 11th edition! The Dow continues to set records since March of 2009, as vividly illustrated by this chart.

Contents

Beyond Edwards & Magee

I would be remiss if I did not note the passing of two important figures in the discipline of technical analysisRichard Arms Jr. and Professor Hank Pruden of Golden Gate University. Well liked and admired they leave large gaps in the community. The article here by Arms is literally his last contribution to the field. Long the central figure in San Francisco, Hank Pruden, much loved and admired leaves the entire field with an enormous gap. He was my particular friend and mentor. He will be infinitely missed.

The reader is advised to read the prefaces to previous editions. They are of a piece with the internal text and some practicesof notation and treatment may not make sense otherwise. Those who think gender should be catered to will find my previous comments on that issue. Why repeat it here?

Let me address the central question focused on by this new edition: This book has studiously ignored an entire field of technical analysisnumber driven and statistical analysis. This has left previous new readers without the guidance they need if they are uneasy with the qualitative method as invented (or discovered) by Edwards & Magee. That lack is resolved by . There the new reader will find number-driven material presented from the point of view of an Edwards & Magee analyst. There also the reader will find presentations of tools by their creatorsa very special treat, and extremely educational. I venture to say any analyst will have his field of vision broadened by Mike Moodys presentation of Point and Figure charting and the tools of Richard Arms, two prominent analysts for whom many of us, especially we chartists, have not given their work the study it deserves.

The list of acknowledgments is as long as a Hollywood awards night. I will shorten it by pointing out previously acknowledged colleagues, assistants, and supporters in previous prefaces. Generally speaking, it is the usual suspects. Some especially merit additional mention here: Nehemiah Brown III, my much-valued and sometime graduate student helps me keep my spreadsheets rational and accurate. My old friend Mark Wainwright (a Tuck graduate) helps me solve technological problems. Part of the pleasure of preparing a new edition comes from interacting with these bright and capable people.

I have not mentioned Ralph Vince (a formidable figure) or Chris Glon, Richard Arms, and Mike Moody.

My efforts have been made easier by the support of Chip Anderson of stockcharts.com, an invaluable resource. I am also indebted to thinkorswim. If I mention them often it is a measure of their importance to my workand not a paid promotion.

W. H. C. Bassetti

San Francisco, California

June 15, 2018

A 10th milestone

Sixty-three years. Sixty-three years and Technical Analysis of Stock Trends still towers over the discipline of technical analysis like a mighty redwood. An evergreen sequoia. And now a 10th edition. It is a propitious moment to refresh it for the new millennium, to prune its solecisms and obsolescence, and to further develop the sometimes prescient work of its originators.

With this premise in mind, I have attempted to make the book shorter, simpler, and more usable in the modern context. I know there are still manual chartists out there. Occasionally they are ecstatic when they find thatas a profit-losing serviceI still have TEKNIPLAT chart paper in my attic. Like travelers in the desert finding an oasis.

But they are the 1%. Everyone else uses software, desktop or internet to do his charting (See note About Gender in the Preface to the eighth edition.). So, I have excised the material on manual charting from the new edition. Budding manual chartists may always turn to the eighth and ninth editions. I have also deleted Magees chapters on Composite Leverage (. I repeat, Magees thinking and practical work predated much modern portfolio management and volatility theory. Additionally, Modern Portfolio Theory has still not caught up to his work on trend analysis and risk. All this material is available in previous editions.