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Market Terminology
The following
represent terms that are oftentimes used in Market Week
and Market Week Daily by Raymond Merriman.
Bear
Market: Consecutively lower troughs and lower crests of the same cycle
type; "left translations" patterns of primary cycles.
Bearish
Crossover Zone: Occurs when current day's (or week's) resistance zone
is near to, or below, the previous day's (or week's) support zone. The
market is bearish until prices close back above this crossover zone.
Bearish
Intermarket Divergence: Occurs when a market makes a new cycle high,
but is not confirmed by a new cycle high in another closely related market.
Bearish
Trigger: Occurs when prices trade above daily or weekly resistance,
then close back below it.
Bull Market:
Consecutively higher crests and higher troughs of the same cycle type;
"right translation" patterns of primary cycles.
Bullish
Crossover Zone: Occurs when current day's (or week's) support zone
is near to, or above, the previous day's (or week's) resistance zone.
The market is bullish until prices close back below this crossover zone.
Bullish
Intermarket Divergence: Occurs when a market makes a new cycle low,
but is not confirmed by a new cycle low in another closely related market.
Examples would be Dow Jones industrials and S&P futures, or Gold and Silver,
or Corn and Soybeans, or Swiss Franc and Euro. If one makes a new low
and the other does not, during a cyclic time band for a low, it is a good
"buy" signal.
Bullish
Trigger: Occurs when prices trade below daily or weekly support, but
then close back up above it.
"Close
that is bearish": Occurs when prices close below daily or weekly support
zone.
"Close
that is bullish": Occurs when prices close above daily or weekly resistance
zone.
Crest:
A high in price.
Cycle:
A measurable phenomenon which occurs consistently at regular intervals
of time. In markets, cycles are measured from trough (low) to trough.
"Double
Loop Stochastic": Occurs when the K and D lines of the stochastics
oscillator fall below 20 percent. The K line then starts to rise above
the D line ("crosses over"), then falls back below it again ("loops" below
it), and then both start to rise above 25 percent (K crosses above D again
too). This is a strong bullish signal ("bullish double loop"). The opposite
can occur above 80 percent, in which case it can be a strong bearish signal
("bearish double loop"). Concept introduced by Technical Analyst, Robert
Perry.
Isolated
High: A price which is higher than the high of the day before and
the high of the day after. Every cycle crest is an isolated crest. Exception
can be if two consecutive days have the exact same high, but both days
are higher than the previous day or following day.
Isolated
Low: A price which is lower than the low of the day before and the
low of the day after. Every cycle trough is an isolated low. Exception
can be if two days have the same low, but both are lower than previous
day or following day.
Lorusso
5-Point Reversal Pattern-Bearish: Named after Smith Barney Chief Technician,
Rick Lorusso. Occurs when a market exhibits consecutively higher isolated
highs, with consecutively lower isolated lows between them. The first
point is an isolated high (point 1), which is followed shortly afterwards
by an isolated low (point 2). This is followed by a higher isolated high
than point 1 (point 3), which is followed by a lower isolated low than
point 2 (point 4). This then is followed by an even higher isolated high
than point 3 (point 5). After this, a prolonged decline tends to unfold.
Lorusso
5-Point Reversal Pattern-Bullish: Occurs when a market exhibits consecutively
lower isolated lows, with consecutively higher isolated highs between
them. The first point is an isolated low (point 1), which is followed
shortly afterwards by an isolated high (point 2). This is followed by
a lower isolated low than point 1 (point 3), which is followed by a higher
isolated high than point 2 (point 4). This then is followed by an even
lower isolated low than point 3 (point 5). After this, a prolonged rally
tends to unfold.
Neutral:
Pertains to a trading range that is between daily/weekly support and resistance.
In terms of trend indicator, it pertains to a situation in which the market
ends a streak of consecutive closes above or below the daily or weekly
trend indicator point (proprietary moving average). When it has three
consecutive closes above or below this point, it changes form neutral
to either up or down trend. Concept developed by Charles Drummond.
"Pat's
Combo Down": Named after Technical Market Analyst; Patrick Shaughnessy,
student of Charles Drummond. Occurs when the high and low of the day (or
week) are both higher than the high and low of the previous day (or week),
and 1) prices closer near the low of that day or week, and 2) prices also
close below a proprietary moving average. This setup presages a sharp
price decline.
"Pat's
Combo Up": Occurs when the high and low of the day (or week) are both
lower than the high and low of the previous day (or week), and 1) prices
closer near the high of that day or week, and 2) prices also close above
a proprietary moving average. This setup presages a sharp rally.
Phase:
Relates to what sub-cycle of the larger cycle you are in. For instance,
there are three major cycles (sub-cycles) within a primary cycle. These
major cycles can also be referred to as the three "phases" of the primary
cycle. Once the first major cycle is completed, the primary cycle begins
its second "phase", or second major cycle within the primary cycle. The
"phase" of a cycle is important.
Resistance:
An area above the current market price where we expect prices to hold
on rallies. A "ceiling" for prices.
Support:
An area below the current market price where we expect prices to hold
on declines. A "floor" for prices.
Trend:
Bull or bear (as above). Trend depends upon the cycle you are studying.
The trend is usually determined by the next longest time frame cycle than
the one you are studying. For example, the trend of the primary cycle,
may depend upon the phasing of the 50-week cycle; the trend of the 50-week
cycle may depend upon the phasing of the 4-year cycle.
Trend
run down: Occurs when a market has three consecutive closes below
a proprietary moving average line. Concept developed by Charles Drummond
Trend
run up: Occurs when a market has three consecutive closes above a
proprietary moving average line. Concept developed by Charles Drummond.
Trough:
A low in price.
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