Fundamental Indicators for Technical Analysis

Find Giant Buy Side Institutions Investing

Technical Analysis is undergoing massive changes as the technologies that support this form of stock analytic continue to expand and become more sophisticated. Charting software is no longer just about price, time, quantity, and symbol. It is no longer merely candlesticks and stock indicators, but is becoming a far more useful tool for both Professional Traders and Individual Investors worldwide with fundamental indicators for Technical Analysis now available.

With the new more sophisticated capabilities of graphical software products, new analysis techniques must be explored and developed. These provide the Individual Investor and Retail Trader with more advanced analytical tools. As the pace of trading and the variety of instruments increases, it is important to streamline and simplify the entire stock selection process.

The use of fundamental indicators for Technical Analysis is one of the most exciting new areas of development for both the fundamental and technical Professional Traders and Individual Investors, with the ability now to integrate most of the essential fundamentals and even many financial aspects into a graphical chart form that is as easy to analyze as stock indicators. With fundamental data now part of the best charting software systems, Individual Investors and Retail Traders are no longer hampered by the lack of transparency for the fundamental side of the market, which constitutes more than 75% of all Market Participants.

Conversely, with technical data reaching new levels of sophistication a new approach is being adopted by many Fundamentalists.

Integrating both fundamental and some technical data into their stock selection process immediately provides greater transparency for Risk Analysis and assessment, as well as monitoring of the Market Participants active in that stock.

The combining of both Fundamental and Technical Analysis into the graphical form for stock charts is called Relational Technical Analysis™ and is the most exciting new approach to using the graphics of fundamental indicators for Technical Analysis. It is a faster and more reliable assessment of projected growth potential, Market Participant activity, and the overall trend of the stock, index, Exchange Traded Fund, or other stock derivative.

The new fundamental indicators are line indicators and require some training to use properly but are easy to adapt to use for a greater understanding of the hidden aspects of the market, namely the Dark Pools. Dark Pools represent a massive global capital base of many trillions of dollars. Although there are tens of thousands of small Mutual Funds, with 30,000 Registered Investment Advisor firms, and approximately 400,000 Financial Planners in the US alone, there are less than 3 dozen giant Mutual and Pension Funds in the world and they are the giant Buy Side Institutions.

The giant Mutual and Pension Funds however, control a disproportionate amount of the investment monies from the Individual Investor in the US, Europe, and other countries trading US listed stocks. Without the ability to see where these Giant Funds are moving monies and whether the stock is in or out of favor, both Technical Traders and Fundamentalists are at an extreme disadvantage. Small Funds Managers in particular are at higher risk if they are unaware of where the Giant Funds are placing capital resources.

The Giant Funds control tops and bottoms which are the most critical areas for Individual Investors, Retail Traders, and Fundamentalists. Knowing where the Giant Funds are buying has become nearly impossible with standard Fundamental Analysis or traditional Technical Analysis methods due to the increased use of Dark Pools in the US, Canada, and Europe.

Many Individual Investors and Retail Traders have become frustrated about the increased lack of transparency in the markets, but it is unlikely that the US will close the Dark Pools that the Giant Funds prefer for placing orders. Instead of being frustrated by the increasing use of Dark Pools or Alternative Trading Systems, Individual Investors and Retail Traders as well as Fundamental Traders can turn to new charting software. This now includes special new fundamental indicators for Technical Analysis which reveal where giant lot activity is occurring at that time.

Below is a fine example of one of the many new fundamental indicators that can be used with Technical and Fundamental Analysis to improve the selection of stocks, indexes, and Exchange Traded Funds. This is a weekly chart view.

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Trade Wisely,

Martha Stokes CMT

TechniTrader technical analysis using TC2000 charts, courtesy of Worden Bros.

Chartered Market Technician
Instructor & Developer of TechniTrader Stock & Option Courses

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