Dancing with the Trend

Greg Morris
About the author: has been a technical market analyst for over 40 years and is the author of several popular financial analysis books including Candlestick Charting Explained, Investing with the Trend and The Complete Guide to Market Breadth Indicators. Before retiring, he served as the Chief Technical Analyst and Chairman of the Investment Committee for a technical-based money management company with over $5.5 billion under management. Greg has appeared on CNBC, Fox Business, and Bloomberg Television and has also spoken at numerous financial conferences around the world.

Latest Posts

Dancing with the Trend

Building a Rules-Based Trend Following Model

by Greg Morris

I’m going to start a new series of articles on building a rules-based trend following model.  For a host of reasons, I cannot provide readers complete details of the trend following model I currently use, but I can simulate most of the concepts in various examples, so you will have a good feel for how it works and what is required.  This article will lay out some of the concepts I plan on covering over the next few months.  I’m quite sure this series will be interspersed with articles on other topics, so I’ll use my normal article titling by adding 2, 3, etc. to the above Read More 

Dancing with the Trend

Article Summaries: 7/2017 - 11/2017

by Greg Morris

Periodically I write an article that reviews the past few months of articles.  Why on Earth would I do this?  Primarily for two reasons.  One is that many new readers are involved and often they do not go back and look at the past articles.  Two is that my articles are rarely tied to anything that is happening in the markets.  Generally, they are about experiences I have had as a technical analyst for 45 years; the good, the bad, and the ugly.  You can click on the headers for a link to the article. Top 5 Investing Mistakes When Read More 

Dancing with the Trend

The Deception of Average

by Greg Morris

I mentioned in the last article I would discuss ‘average’ soon; so here it is, sooner than I thought. The “World of Finance” is fraught with misleading information.  The use of average is one that needs a discussion.  Chart A is a chart showing the compounded rates of return for a variety of asset classes.  If I were selling you a buy and hold strategy, or an index fund, I would love this chart.  From this chart showing 85 years of data, I could say that if you had invested in small cap stocks you would have averaged 11.93% a year, and if you had invested in large cap Read More 

Dancing with the Trend

WHY do Most Investors do so Poorly?

by Greg Morris

There are a number of companies that track performance for various asset classes, including the performance of investors.  Table A, from J.P. Morgan, shows the Average Investor’s 20-year annualized returns of only 2.3%.  I have reproduced the small print below the table because it explains the process used.  And I cannot read the small print. Source: J.P. Morgan Asset Management; (Top) Barclays, FactSet, Standard & Poor’s; (Bottom) Dalbar Inc. Indexes used are as follows: REITS: NAREIT Equity REIT Index, EAFE: MSCI EAFE, Oil: WTI Index Read More 

Dancing with the Trend

Zahorchak Revisited

by Greg Morris

A couple of years ago I introduced a trend following technique which I first learned in the late 1970s.  I thought this would be a good time to review it; especially since this technique is now available in StockCharts.com’s symbol catalog. A trend follower’s lament: “Only the market itself can tell you what to do.  Everything else is irrelevant.  While the irrelevant items tell you what the market ought to be doing, this may or may not be what it actually is doing.”  To determine what the market is doing compute the following: Read More 

Dancing with the Trend

The Wisdom of Montier

by Greg Morris

I honestly do not know when or where I first heard of James Montier but believe it was a turning point in my investing and money management.  Behavioral Finance / Investing is a relative newcomer to the world of investing, or at least the identification and writing about it.  The human frailties have always been here, we just didn’t have a word to describe them.  Plus, I have more than once mentioned James Montier’s latest book, “The Little Book of Behavioral Investing” in articles with the comment that you MUST read it and then plan on reading it once a year.  I first Read More 

Dancing with the Trend

Maintain a Proper Perspective

by Greg Morris

Watching the evening news can give you a misleading and often wrong perspective on the stock market.  Most commentators mention whether the Dow Jones Industrial Average was up or down and by how much, and that is just about the complete financial report, even though the Dow Jones’ 30 large blue-chip stocks do not give a good representation of the overall stock market.  It is a misguided focus. The Dow Jones Industrial Average was created by Charles Dow in 1896, originally 12 stocks, but currently consists of 30 stocks.  Because the evening news has focused on the Read More 

Dancing with the Trend

WHY Breadth?

by Greg Morris

I have written often about market internals or market breadth.  In fact, there was a whole series of articles as I was updating my “The Complete Guide to Market Breadth Indicators” book.  The articles began with CGMBI; there were 10 of them, all back near the beginning of my article list.  See links at end of this article. What you may not know is that every breadth indicator in the book is now part of StockCharts.com’s Symbol Catalog.  They all begin with !BI followed by two letters identifying the exchange they are from (NY for New York, NA for Nasdaq, and TO for Read More 

Dancing with the Trend

Aerodynamics for Investors

by Greg Morris

Oh no!  He is losing it!  I have stated a few times that the well seems to be running low; this article might confirm that.  Here is an attempt to turn basic aerodynamics into an investment process. Where:                CL is the coefficient of Lift                p is the density of air                V is the freestream Read More 

Dancing with the Trend

Gurus and Experts

by Greg Morris

Why do investors / traders like predictions?  The prediction industry is not just Wall Street, there are business forecasting companies, economic analysis and forecasting, sales forecasting, on and on.  However, Wall Street seems to have the least talent of the bunch.  Here are some reasons I think investors / traders like predictions: If the Investor loses money, they can blame the forecast.  Sad! Confidence in a forecast rises with the amount of information that goes into it. But the accuracy of the forecast stays the same Read More 

Subscribe to Dancing with the Trend to be notified whenever a new post is added to this blog!