Stock Screener Technical Analysis

Technical analysis of the stock market is one of the oldest devices designed to beat the market. Generally, Charles Dow, writing in the Wall St. Journal at the beginning of the 20th century, is credited with laying the foundation work for this particular approach to winning while playing the market.

The Greedy Trader says, "Our technical analysis stock screener combines fundamental criteria with chart trend analysis, chart patterns recognition, support resistance line crossover, candlestick patterns, trend following and momentum technical indicators." (And if that passage doesn't scare the hell out of you, nothing will. Including swimming with Great Whites.)

In the belief that this business can be more plainly explained and more easily comprehended, Wikipedia was consulted and plumbed to locate these gems:

"MACD, which stands for Moving Average Convergence / Divergence, is a technical analysis indicator created by Gerald Appel in the 1960s." Although found on Wiki, the following was attributed to infospaceinc.com, "The 'MACD' is a trend-following-momentum indicator that shows the relationship between two moving averages of prices."

Well, that certainly clears up all the mystery nicely, doesn't it? Starting all over again, a stock screener is a tool investors can use to filter stocks given certain criteria of their own choosing. If such a screener's criteria include the application of technical analysis, the investor winds up watching stocks that fall in line with his established values.

Manipulation of the primary trend is impossible. It's just too big. The market reflects all available information. Sometimes the market reacts negatively to good news. An old Wall St. axiom says, "Buy the rumor, sell the news." Charles Dow has been attributed with the so-called Dow Theory, but in fact his original hypotheses, delineated in the Wall St. Journal of which he was a partial owner, were later greatly enhanced by the contributions of William Hamilton and Robert Rhea.

Most rational investors and brokers look upon the Dow Theory as primarily a set of guidelines and principles that can assist investors with their own studies of the stock market. Much of what Dow saw on the market in the first two years of the last century is no longer there. The Dow theory provides a methodology to remove some of the emotion from investing. William Hamilton elaborated on this when he warned that investors shouldn't be influenced by their own wishes.