Glossary

The price trend leading into an event. The Inbound Trend is important in two ways:

1. The height of the Inbound Trend is an indication of the possible price move away from the breakout price of the event
2. The slope of the Inbound Trend provides an indication of the strength of an event.

A very strongly sloped Inbound Trend (large height, short duration) is a stronger indicator of a reversal than a shallow Inbound Trend (small height, large duration).

The length, in days, of the trend leading into the event.

An index is a grouping of stocks used by the financial markets as a benchmark of performance. Examples of indices follow.

* The Dow Jones Industrial Average(DJIA): A price-weighted index of thirty giants of American Industry. Price-weighted means that higher-priced stocks receive more weighting than lower-priced ones. Examples of stocks in the DJIA are IBM, General Motors, and Microsoft.
* The New York Stock Exchange Composite Index: A price-weighted index made up of all NYSE stocks.
* Standard & Poors 500 Index: A market capitalization weighted index (shares outstanding multiplied by stock price per share).
* The Nasdaq Composite Index: A statistical measure that indicates changes in the Nasdaq Stock Market by measuring all Nasdaq common stocks. It is price-weighted.

While one cannot directly trade indices, there is value in reviewing Technical Analysis for indices. For example, if there is a bearish event for a technology-based index, an investor might want to rebalance his/her portfolio to protect against bearish price movements in technology-based stocks. Or if a strong bullish pattern appears in a pharmaceutical company, but a pharma-based index shows a bearish event, then an investor may think again about taking a position in the pharmaceutical company since the industry is moving in the opposite direction.

This is a Technical Analysis category. Some Technical Analysis are based on indicators.

A basic category of business activity. While businesses in the same industry achieve their own unique financial goals, they generally experience the same overall market trends that other businesses within the same industry experience. For example, while Sears and WalMart compete, they are both also hurt by a slow down in consumer spending.

Examples of financial instruments include: stock, index, mutual fund, currency.

The identification used by the exchange for a financial instrument. The symbol is usually a short alphabetic representation of the company name. e.g. MSFT for Microsoft.

The symbol may also include a punctuation mark to identify the type of instrument the symbol represents, such as Security (Preferred Stock, Warrant, Debenture, Right, US Funds, Trust Unit, Index, Mutual Fund or Currency). Symbols are not unique across exchanges. For example the same three letter symbol may be used for two different stocks on the New York Stock Exchange and the Toronto Stock Exchange.

The type of financial instrument. Security and Index are currently available for technical analysis.