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Annotation. Technical Analysis and Stock Market Profits, is a worthy addition to any technical analyst's personal library or any market library. His "pioneering research" represents one of the finest works ever produced on technical analysis, and this book remains an example of the highest order of analytical quality and incisive trading wisdom. Originally devised as a practical course for investors, it is as alive, vital and instructional today as the day it was written. It paved the way for Robert Edwards and John Magee's best-selling Technical Analysis of Stock Trends - a debt which is acknowledged in their foreword: 'Part One is based in large part on the pioneer researches and writings of the late Richard Schabacker.' Schabacker presents technical analysis as a totally organized subject and comprehensively lays out the various important patterns, formations, trends, support and resistance areas, and associated supporting technical detail. He presents factors that can be confidently relied on, and gives equal attention to the blemishes and weaknesses that can upset the best of analytical forecasts. Factors which investors would do well to absorb and apply when undertaking the fascinating game of price, time and volume analysis About the Series Editor......Page 6 Table of Contents......Page 8 Editor's Introduction......Page 12 Preface to First Edition......Page 20 Study I: Technical Approach to Stock Trading......Page 22 An ‘‘Advanced Course’’......Page 24 Stocks Eligible for Charting......Page 25 Charts as the ‘‘Complete Memory’’......Page 26 Technical Chart Action – the New Science......Page 27 Reasons for Contrary Technical Action......Page 28 Summary of the Technical Approach......Page 29 No Easy Road to Profits......Page 30 Newspapers which Publish Charts......Page 31 Services Selling Daily Charts......Page 32 Advantages of Making Your Own Charts......Page 33 Number of Charts Necessary......Page 34 Chart Paper......Page 35 Constructing the Scale......Page 36 Plotting the Price Data......Page 37 Shifting the Volume Chart......Page 38 Holidays on the Time Scale......Page 39 Helpful Notes on ‘‘Fundamentals’’ May Be Added......Page 40 Starting a New Sheet......Page 41 Stock Price Movements......Page 42 Intermediate Movements......Page 43 Major Trends Shown on Monthly Charts......Page 44 Importance of Minor Movement Study......Page 48 Study II: Important Reversal Formations......Page 50 Public vs. the Insiders......Page 52 Why the Public Usually Loses......Page 53 How to Become an Insider......Page 54 Charts Detecting Professional Operations......Page 55 Turns Are Most Important......Page 56 Why Volume Increases on Reversals......Page 57 Volume Needed to Overcome Momentum......Page 58 Examples of One-Day Reversal......Page 59 Price and Volume Must Be Considered Together......Page 60 Volume Showing Insiders Crossing the Public......Page 61 Introductory Review......Page 62 Description of Head and Shoulders......Page 63 Typical Volume in Head and Shoulders......Page 64 ‘‘Breaking the Neck’’......Page 66 Varying Width of Shoulders......Page 68 Warning in Drooping Shoulder......Page 71 Action on Ascending Neck Lines......Page 72 Head and Shoulders Bottoms......Page 73 Examples of Head and Shoulders Bottom Reversals......Page 74 Flat Shoulders......Page 78 Uncompleted Head and Shoulders Patterns......Page 79 Patterns in Weekly and Monthly Charts......Page 81 Measuring Extent of Movement......Page 82 Logic of Chart Patterns......Page 84 Logic of Head and Shoulders Reversal......Page 85 Study III: Important Reversal Formations Continued......Page 86 Definition of the Common Turn......Page 88 Chart Example of the Rounding Top......Page 89 Chart Patterns in the Averages......Page 91 Volume on Rounding Turns......Page 92 The Triangle or Coil......Page 95 Triangle Unreliable as a Reversal......Page 96 Denotes Continuation More Often than Reversal......Page 97 Examples of Triangular Reversal......Page 98 Break-out Confirmed by Volume......Page 99 Break-out may Come Quickly......Page 100 Varieties of Triangular Tops......Page 101 Early Break-out Reliable......Page 103 Triangular Bottom Reversals......Page 104 Wave Movement Following Apex......Page 108 More Reliable as Forecasters......Page 109 The Descending Triangle as a Reversal......Page 110 Out-of-Line Movements......Page 112 Effect of General Market on Individual Issues......Page 114 Ascending Triangle Reversals......Page 115 The Wedge Formation......Page 116 Up-turned and Down-turned Wedges Compared......Page 120 Summary of the Triangle Reversal Group......Page 123 Probable Causes for Triangles......Page 124 Study IV: Important Reversal Formations Continued......Page 126 Relation to Preceding Price Movement......Page 128 Examples of Double Top Reversals......Page 129 Shorter Intervals Between Tops......Page 133 Multiple Tops and Bottoms......Page 135 An Illustration of a False Double Top......Page 138 Double Tops and Bottoms on Long-range charts......Page 140 Double Tops and Bottoms in the Averages......Page 142 The Complex Pattern – a Reliable Forecaster......Page 145 The Double Head and Shoulders Top......Page 146 Variations as in Simple Head and Shoulders......Page 147 Head and Multiple Shoulders Types......Page 148 Complex Bottoms in Same Varieties as Tops......Page 150 The Broadening Top – a Rare and Intricate Pattern......Page 153 Chart Example of the Broadening Top......Page 154 Completion of the Pattern......Page 156 Ending Bull Markets......Page 157 Distinction Between ‘‘Long’’ and ‘‘Short’’ Trading......Page 159 Broadening Formations Which Fail......Page 161 A Brief Review......Page 162 As has previously been not......Page 158 Study V: Minor Reversal Formations......Page 164 The Inverted Triangle......Page 166 The Symmetrical Inverted Triangle......Page 167 A More Typical and Less Profitable Example......Page 169 Difficulty of Trading on Inverted Triangles......Page 171 Explanation for Inverted Triangles......Page 173 Examples of Diamond Reversals......Page 175 The Rectangle as a Reversal......Page 177 Rectangular Bottom Reversals......Page 180 The Rectangle as a Top Reversal......Page 182 Break-out of Dormancy......Page 185 Relative Dormancy in an Active Stock......Page 186 The Island Formation......Page 189 The Island Formation Described......Page 190 Gaps Should Form at Same Level......Page 192 Other Island Manifestations......Page 193 Continuation Formations Next......Page 196 Study VI: Major Continuation Formations......Page 198 Inside Operations and Intermediate Chart Patterns......Page 200 The Market Writes Its Own Forecast......Page 201 Upward Continuation Triangles......Page 202 Examples in Preceding Illustrations......Page 204 Right-angle Continuation Triangles......Page 205 True Right-angles Triangles as Continuations......Page 207 False Moves Studied Later......Page 209 Inverted Triangles as Continuations......Page 211 Almost a Broadening Top......Page 212 Right-angle Inverted Triangles More Reliable......Page 213 The Rectangle as a Continuation......Page 216 Examples of Rectangles in an Up-trend......Page 219 Rectangles in Chrysler, 1935......Page 220 Examples in the 1931 Bear Market......Page 222 Flags and Pennants – Dependable Signals......Page 225 Examples of Flags in Upward Movements......Page 226 Upward Flying Flags in Up-trends......Page 228 Flags and Pennants in Weekly Charts......Page 231 An Illustration in Crown Cork and Seal......Page 233 Often the Only Helpful Indication......Page 235 Review of Continuation Patterns......Page 236 Their Application in Practical Trading......Page 237 Formations Which Change Their Nature......Page 238 Study VII: Miscellaneous Intermediate Patterns and Phenomena......Page 240 But First Some General Considerations......Page 242 The Drooping Bottom......Page 243 Drooping Bottom Offers Quick Profits......Page 245 Examples Without Previous Break-outs Very Rare......Page 247 Trading on the Accelerating Patterns......Page 248 The Horn as a Continuation Formation......Page 250 Out-of-line Movements......Page 254 Sometimes Resembles a True Break-out......Page 255 The Interpretation of the Out-of-line Action......Page 256 The Out-of-line from a Symmetrical Triangle......Page 259 The Zig-zag Movement......Page 260 Recurrent Patterns of Price Action......Page 261 The Scallop – an Opportunity and a Warning......Page 263 The Price Gap – an Interesting but Often Puzzling Phenomenon......Page 266 Gaps More Common in Thin Markets......Page 268 The Common Gap – Soon Covered......Page 270 Apparent Break-away Gaps that Are Later Closed......Page 271 Difficulty of Immediate Classification......Page 272 Continuation and Exhaustion Gaps......Page 273 Characteristics of the Exhaustion Gap......Page 275 An Exhaustion Gap of Only Temporary Effect......Page 276 Reviewing the Island Formation......Page 277 An Abnormal Island Reversal......Page 278 Limited Forecast of Islands Within Patterns......Page 280 Summary of the Gap Study......Page 281 Gap Implications to be Studied Later......Page 282 Study VIII: Trend Line Action......Page 284 Examples of Long-term Trend Lines......Page 286 The Theory of Trend Lines......Page 287 Practical Uses of Trend Lines......Page 288 Trial and Error Method in Establishing Lines......Page 290 Practicing on the Chart......Page 291 Patterns Appearing Within Trends......Page 293 Completing the Picture in Baltimore and Ohio......Page 295 Trading on the Simple Primary Trend Line......Page 297 Establishing Parallel Trend Lines......Page 299 Playing the Major Trend......Page 300 Trend Lines Help to ‘‘Let Profits Run’’......Page 301 Horizontal Trading Areas......Page 304 What Constitutes a Significant Break......Page 305 Fanning Trend Lines and Flattening Trends......Page 307 Patterns Help in Interpretation of Trend Lines......Page 308 Practical Use of the Throw-back......Page 310 Trend Lines on Logarithmic Scale......Page 311 GENERAL REVIEW OF VOLUME......Page 312 Volume Characteristics Previously Discussed......Page 314 Typical Volume Action on Reversals......Page 315 Volume Action at Temporary Halts in Trends......Page 316 Volume as an Indication of Continuation......Page 317 Relation of Volume Action to Basic Trend......Page 318 THE DOW THEORY......Page 319 The Major Tenets of the Dow Theory......Page 320 Application to Stock Trading......Page 321 Study IX: Suport and Resistance Levels......Page 322 Deciding Upon Our Terminology......Page 324 Logical Explanation for Reversal Levels......Page 325 The Memory Factor Comes into Play......Page 326 Degree of Reliability of Supply and Demand Levels......Page 327 And Old Tops Become New Bottoms......Page 328 Value of Weekly Charts in Forecasting......Page 329 Levels Established During the Bear Market......Page 331 Forecasting the Next Steps in General Electric......Page 332 Resistance and Support Levels in Intermediate Trends......Page 333 Negative Usefulness of Minor Support Levels......Page 335 Trend Lines Defining Support and Resistance......Page 337 The Cradle – a Strong Resistance Point......Page 338 Support and Resistance Lines on Multiple Formations......Page 340 Support and Resistance Set Up by Symmetrical Triangles......Page 342 The Symmetrical Triangle Forms a Cradle......Page 344 A Third Significant Level......Page 346 Support and Resistance at Gaps......Page 347 A Second Opportunity to Buy or Sell......Page 348 How Long Are Previous Levels Valid......Page 349 The Half-way Intermediate Movement Theory......Page 350 A Good Place to Take Profits......Page 351 Use of Support and Resistance Levels in Short Selling......Page 352 Study X: Measuring Rules and Formations......Page 354 Back History of Support and Resistance......Page 356 Trend Lines as Measuring Indications......Page 357 Measuring Implications of Patterns Themselves......Page 358 Testing the Head and Shoulders Measuring Formula......Page 359 Measuring Implications of Triangles......Page 360 The Flag Rule Does Not Forecast A Reversal......Page 361 Examples of Half-mast Congestions......Page 362 Reliability of the Half-mast Pattern......Page 364 The Single Gap Measuring Theory......Page 366 A Less Easily Interpreted Example......Page 368 May Be Applied Also to Two Continuation Gaps......Page 369 Dependability of Multiple Gap Rule......Page 370 FALSE MOVES AND SHAKE-OUTS......Page 371 Misleading False Moves Fortunately Rare......Page 372 The Ordinary Symmetrical Triangle False Move......Page 373 The Exceptional False Move with High Volume......Page 375 False Moves out of Rectangles......Page 377 False Moves Following Head and Shoulders......Page 378 The Shake-out on High Volume......Page 380 The Use of Stop-loss Orders Against False Moves......Page 381 The ‘‘End Run’’ – Not a False Move......Page 382 STOP-LOSS ORDERS......Page 384 The Mechanics of the Stop-loss Order......Page 385 Where to Place Stop Orders......Page 386 Applying the Principles to a Long Commitment......Page 387 The First Shift in the Stop-loss Level......Page 389 Completing the Trade in US Rubber......Page 390 The Stop Loss Order in Short Selling......Page 391 Stop-loss Orders in Short Trading are Buy Orders......Page 392 The Use of ‘‘Mental’’ Stops......Page 394 Stop-loss Orders of Little Help within Patterns......Page 395 Other Minor Uses for Stop Orders......Page 396 Study XI: Use of long-term charts, averages and groups......Page 398 The Monthly Chart......Page 400 Formations Develop on Monthly Charts......Page 401 The Uses of the Average Charts......Page 403 The Uses of Group Charts......Page 404 Lessons in Long-term Analysis......Page 407 Breaking up the Daily Time Interval......Page 408 The Minor-Move Chart......Page 409 Point and Figure Charts......Page 410 Limitations of Point or Figure Charts......Page 412 Other Special Lines of Chart Research......Page 413 The Bond Market......Page 414 An Example of Bond Chart Action......Page 415 Charts Interrupted by Exploration of Different Options......Page 417 Different Methods of Charting Options......Page 418 Close Relation Between Prices of Different Grains......Page 420 A Continuation Triangle and a Measuring Gap......Page 421 Charting the Cotton Market......Page 422 An Example of Cotton Market Charting......Page 423 Commodity Trading Has its Own Problems......Page 424 Study XII: Trading Tactics......Page 426 Some Aids In Practical Trading......Page 428 Diversification of Risk......Page 429 Capitalization and Leverage Factors......Page 430 Consistency of Swing Habits Illustrated......Page 431 Poor Stocks to Chart......Page 433 Wait for the Ideal Situation......Page 435 Regular Time for Daily Chart Consideration......Page 436 Intestinal Fortitude – a Word to the Naturally Conservative......Page 437 The Conservative vs. the Overconfident Type......Page 438 But Give the Market a Chance to Act......Page 439 Weigh Risks in Advance......Page 440 Don’t Lean Too Heavily on Outside Advice......Page 441 Judging Personal Aptitude for Chart Trading......Page 442 SUMMARY AND REVIEW......Page 443 Reviewing the Continuation Family......Page 444 The Question of Too Much Theory......Page 445 Why Charts Are Not Infallible......Page 446 A PROGRAM FOR THE BEGINNER......Page 447 1. Making Up the List......Page 448 3. Studying the Patterns......Page 450 5. Trading on Paper......Page 451 6. The Final Test......Page 452 Index of Figures by Number......Page 454 Index of Figures by Subject......Page 458 Index to Figure References......Page 461 Index of Subjects......Page 465 With a new foreword by Peter Brandt. Richard W. Schabacker's great work, Technical Analysis and Stock Market Profits, is a worthy addition to any technical analyst's personal library or any market library. His "pioneering research" represents one of the finest works ever produced on technical analysis, and this book remains an example of the highest order of analytical quality and incisive trading wisdom. Originally devised as a practical course for investors, it is as alive, vital and instructional today as the day it was written. It paved the way for Robert Edwards and John Magee's best-selling Technical Analysis of Stock Trends - a debt which is acknowledged in their 'Part One is based in large part on the pioneer researches and writings of the late Richard Schabacker.' Schabacker presents technical analysis as a totally organized subject and comprehensively lays out the various important patterns, formations, trends, support and resistance areas, and associated supporting technical detail. He presents factors that can be confidently relied on, and gives equal attention to the blemishes and weaknesses that can upset the best of analytical Factors which investors would do well to absorb and apply when undertaking the fascinating game of price, time and volume analysis.

richard W. Schabacker's Great Work, Technical Analysis And Stock Market Profits, Is A Worthy Addition To Any Technical Analyst's Personal Library Or Any Market Library. His Pioneering Research Represents One Of The Finest Works Ever Produced On Technical Analysis, And This Book Remains An Example Of The Highest Order Of Analytical Quality And Incisive Trading Wisdom. Originally Devised As A Practical Course For Investors, It Is As Alive, Vital And Instructional Today As The Day It Was Written. It Paved The Way For Robert Edwards And John Magee's Best-selling Technical Analysis Of Stock Trends - A Debt Which Is Acknowledged In Their Foreword: 'part One Is Based In Large Part On The Pioneer Researches And Writings Of The Late Richard Schabacker.'schabacker Presents Technical Analysis As A Totally Organized Subject And Comprehensively Lays Out The Various Important Patterns, Formations, Trends, Support And Resistance Areas, And Associated Supporting Technical Detail. He Presents Factors That Can Be Confidently Relied On, And Gives Equal Attention To The Blemishes And Weaknesses That Can Upset The Best Of Analytical Forecasts: Factors Which Investors Would Do Well To Absorb And Apply When Undertaking The Fascinating Game Of Price, Time And Volume Analysis.