Fin 369 - Final

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MARKET SENTIMENT

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REFERS TO THE PSYCHOLOGY OR EMOTIONS OF MARKET PARTICIPANTS

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INVESTOR PSYCHOLOGY

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HOW INVESTORS REACT EMOTIONALLY TO THE MARKET, AND HOW THESE REACTIONS AFFECT THE MARKET

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SENTIMENT

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THE NET AMOUNT OF ANY GROUP OF MARKET PLAYERS' OPTIMISM OR PESSIMISM REFLECTED IN ANY ASSET OR MARKET PRICE AT A PARTICULAR TIME

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CRASHES

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EXTRAORDINARY DECLINES IN THE MARKET

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PANICS

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EXTRAORDINARY DECLINE IN THE MARKET

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BUBBLES

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EXTRAORDINARY INCREASE IN THE MARKET

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NONCONFORMIST

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THINKING AGAINST THE MAJORITY

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SAMENESS OF THINKING

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THINKING THE SAME AS OTHERS

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IMPAIRED VOLATILITY

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LOOKED AT IN THE HOPES OF MEASURING MARKET PARTICIPANTS' ANXIOUSNESS ABOUT THE FUTURE

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CLIMAX

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OCCURS WHEN A STOCK MAKES A NEW 52-WEEK HIGH/LOW BUT THEN CLOSES BELOW/ABOVE THE PREVIOUS WEEK'S CLOSE

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DIVERGENCE

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WHEN A MARKET INDICATOR DOES NOT SUPPORT THE DIRECTION OF PRICE MOVEMENT

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POSITIVE REVERSAL

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OCCURS WHEN THE OSCILLATOR OR INDICATOR REACHES A SECOND LOW THAT IS NOT CONFIRMED BY ANOTHER NEW LOW IN PRICES

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NEGATIVE REVERSAL

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OCCURS WHEN THE OSCILLATOR REACHES A NEW HIGH BUT PRICES DO NOT

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ADVANCE

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IF A CLOSING PRICE IS ABOVE ITS PREVIOUS CLOSE

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DECLINE

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IF A STOCK CLOSES BELOW THE PREVIOUS CLOSE

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UNCHANGED

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A STOCK THAT CLOSES AT THE EXACT PRICE IT CLOSED AT THE DAY BEFORE

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BREADTH

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A specific type of indicator that uses advancing and declining issues to determine the amount of participation in the movement of the stock market

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DOUBLE DIVERGENCE

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TWO CONSECUTIVE NEGATIVE BREADTH DIVERGENCES

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OSCILLATOR

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INDICATORS THAT ARE DESIGNED TO DETERMINE WHETHER A MARKET IS OVERBOUGHT OR OVERSOLD

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EQUITY LINE

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A GRAPH OF A POTENTIAL ACCOUNT VALUE BEGINNING AT ANY TIME ADJUSTED FOR EACH SUCCESSIVE TRADE PROFIT OR LOSS

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THRUST

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WHEN A DEVIATION FROM THE NORM IS SUFFICIENTLY LARGE TO BE NOTICEABLE AND WHEN THAT DEVIATION SIGNALS THE BEGINNING OF A NEW TREND, USUALLY UPWARD

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DECENNIAL PATTERN

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A PRICE ARRANGEMENT IN THE STOCK MARKET THAT HAD SIMILAR CHARACTERISTICS EVERY TEN YEARS

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EVENT TRADING

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WHEN EITHER A NEWS ANNOUNCEMENT IS DUE, A SURPRISE NEWS ANNOUNCEMENT OCCURS, OR A HOLIDAY IS SOON TO OCCUR

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STAGFLATION

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INFLATION, COUPLED WITH HIGH UNEMPLOYMENT

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YIELD CURVE

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A GRAPHICAL RELATIONSHIP OF THE YIELD ON BONDS WITH VARIOUS LENGTHS OF TIME TO MATURITY

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INVERTED YIELD CURVE

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OCCURS WHEN SHORT-TERM INTEREST RATES RISE ABOVE LONG-TERM RATES

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PIVOT

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A REVERSAL POINT

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OPENING GAP

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WHEN THE OPENING PRICE FOR THE DAY IS OUTSIDE THE RANGE OF THE PREVIOUS DAY

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RUNAWAY GAPS

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GAPS THAT OCCUR ALONG A TREND

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MEASURING GAPS

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GAPS THAT OCCUR ALONG A TREND

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EVENT DECLINE

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OCCURS WHEN SOMETHING NEGATIVE, SUCH AS A BAD NEWS ANNOUNCEMENT, COMES OUT

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ONE-BAR REVERSAL

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WHEN A TRADING BAR HIGH IS GREATER THAN THE PREVIOUS BAR HIGH AND THE CLOSE IS DOWN FROM THE PREVIOUS BAR CLOSE

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PIPE FORMATION

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OCCURS AT THE END OF A TREND, UPWARD OR DOWNWARD, BUT EXTENDS THE REVERSAL OVER TWO BARS

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BOUNDED

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THE OSCILLATOR SWINGS BACK AND FORTH WITHIN CERTAIN BOUNDS OR LIMITS

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FAILURE SWING

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TYPE OF BREAKOUT FROM AN OVERBOUGHT OR OVERSOLD ZONE

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NEGATIVE FAILURE SWING

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OCCURS WHEN THE OSCILLATOR BREAKS DOWN OUT OF AN OVERBOUGHT ZONE, CREATES A REVERSAL POINT, PULLS BACK BUT FAILS TO REENTER THE ZONE, AND BREAKS BACK DOWN BELOW THE EARLIER REVERSAL POINT

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POSITIVE FAILURE SWING

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OCCURS WHEN AN OSCILLATOR BREAKS UP OUT OF AN OVERSOLD ZONE, CREATES A REVERSAL POINT, PULLS BACK BUT FAILS TO REENTER THE ZONE, AND THEN BREAKS UP ABOVE THE EARLIER REVERSAL POINT

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SUMATION

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THE ADDING TOGETHER OF MULTIPLE COSINE WAVES

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FOCAL POINTS

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OCCUR WHEN THREE OR MORE HALF-CYCLE, CENTERED, MOVING AVERAGES CROSS AT ROUGHLY THE SAME LOCATION

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MOTIVE IMPULSE WAVE

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UPWARD PRICE MOVEMENT

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LEADING DIAGONAL

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DIAGONAL THAT APPEARS IN WAVE 1

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ENDING DIAGONAL

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DIAGONAL THAT APPEARS IN WAVE 5

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THROW-OVER

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WHEN THE FIFTH SUBWAVE BREAKS OUT OF THE DIAGONAL'S BOUNDS FOR A SHORT PERIOD BEFORE REVERSING

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BETA

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A measure of the volatility, or systematic risk, of a security or a portfolio in comparison to the market as a whole

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ALPHA

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A measure of performance on a risk-adjusted basis

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PROFIT FACTOR

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THE ABSOLUTE VALUE OF THE RATIO OF GROSS PROFIT TO GROSS LOSS

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SHARPE RATIO

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A COMMON MEASURE OF THE RETURN VERSUS RISK OF A PORTFOLIO

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MAXIMUM DRAW-DOWN

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THE MAXIMUM AMOUNT THAT THE EQUITY CURVE CORRECTED FROM APEAK

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RETURN RE-TRACEMENT RATIO

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THE AVERAGE ANNUALIZED COMPOUNDED RETURN DIVIDED BY MR OR WORST LOSS AT LOW POINT FROM ANY TIME PRIOR

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STERLING RATIO

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THE ARITHMETIC AVERAGE OF ANNUAL NET PROFIT DIVIDED BY AVERAGE ANNUAL MAXIMUM DRAWDOWN

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SORTINO RATIO

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SIMILAR TO SHARPE RATIO, BUT CONSIDERS ONLY DOWNSIDE VOLATILITY

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EQUITY CURVE

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SHOWS THE LEVEL OF EQUITY PROFIT IN AN ACCOUNT OVER TIME

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UNDERWATER CURVE

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DISPLAYS THE DRAWDOWN FROM EACH SUCCESSIVELY HIGHER PEAK IN EQUITY