The Heretics of Finance: Conversations with Leading Practitioners of Technical Analysis

Chapter 20. Favorite Patterns and Indicators

	For the first thirty years of my career, one of the most accurate market top indicators was the measurement of total volume and upside volume. Invariably, all markets topped down in exactly the same way—by volume declining, and that volume decline would be totally caused by a decline in upside volume, and all this took place with something like a six month lead time. This happened with every major top. Then it stopped. It didn't work anymore. It doesn't work to this day. The markets now top on increasing volume, not on decreasing volume.
	--A. Tabell

Which technical indicators do you consider to be the most and the least reliable?

ACAMPORA: You must start with market breadth (the direction of the majority of stocks) because the Dow and the S&P 500 are flawed averages; they're distorted by weighted components. To assess "the market," I first find out what the stocks are doing. I look at different kinds of breadth measurements. That's important. As for which technical approaches I use least, I don't do Gann analysis because the old timers say that Gann is not the kind of analysis you should base a lot of your conclusions on. I have questions regarding Elliott wave, only because even the people who are supposed to be good at it and who have quite a reputation have made huge mistakes. There's something wrong there. What I think really works ...