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Kingsley Jones
DISCLAIMER
This presentation is for educational purposes only and contains a summary of topical research for students and practitioners of Technical Analysis. Examples included are to illustrate salient points of a method and do not constitute recommendations. No account is taken of the personal financial situation of the reader and you should always consult with a qualified financial advisor before assuming any position in the financial markets. The method described is research in progress.
AGENDA
FUNDAMENTALS OF SENTIMENT Origins of our approach to sentiment The Mind of the Market Average (MOMA) Historical Examples in Bull & Bear Markets Simple Strategies and Cost Basis Theory Current Readings and Opportunities
VALUATION
EXPECTED PROFITS
PROFIT RISK
Bubble
Greed Fear
Hope
Disbelief
Greed
Panic
Denial
Depression
Fear Lock
Despair
Vs. Valuation
http://www.scribd.com/doc/106197091/Cost-Basis-Theory-and-MOMA
Sentiment
28-Feb-03
28-Feb-05
28-Feb-07
28-Feb-09
Volume-at-Price Chart
11.20
5.0%
18 16
Price
14 12 10 8 28-Jan-10
% Volume
8.90
28-Apr-10
28-Jul-10
28-Oct-10
28-Jan-11
10.00
12.00
14.00
16.00
18.00
Time
Price
Key price levels act as support when reached from above and resistance when met from below
Investors are far more likely to have their cost of entry level at prices where large volume traded in the recent past
11.20
5.0% 4.0% 3.0% 2.0% 1.0% 0.0% 8.00
% Volume
8.90
% Volume
8.90
10.00
12.00
14.00
16.00
18.00
10.00
12.00
14.00
16.00
18.00
Price
Price
The Average Cost Basis is near the centre of the Volume at Price distribution
When new trading occurs the Average Cost Basis moves toward the new prices
CURRENT READINGS
CURRENT READINGS
CURRENT READINGS
Thinking Pays
Herding Pays
VALUATION
EXPECTED PROFITS
PROFIT RISK
Pessimism Pays