Investing with the Trend: A Rules-Based Approach to Money Management -- Copyright -- Contents -- Foreword -- Preface -- Acknowledgments -- Chapter 1: Introduction -- Believable Misinformation -- Indicators and Terminology You Should Be Familiar with -- Living in the Noise -- Data -- Part I: Market Fiction, Flaws, and Facts -- Chapter 2: Fictions Told to Investors -- Believable Misinformation in Investing -- The Void of Accountability -- Hiding behind Statistics -- You Must Remain Invested or You Will Miss the 10 Best Days of the Year -- Diversification Will Protect You? -- Dollar Cost Averaging -- Compounding Is the Eighth Wonder of the World -- Relative Performance -- Chapter 3: Flaws in Modern Financial Theory -- What Modern Portfolio Theory Forgot or Ignored -- Modern Portfolio Theory and the Bell Curve -- Black Monday, October 19, 1987 -- Tails Wagging the Dog -- Standard Deviation (Sigma) and Its Shortcomings -- Improper Process -- High Sigma Days We All Remember -- Black Monday, October 28 and Black Tuesday, October 29, 1929 -- Black Monday, October 19, 1987 -- 1885-2012 -- Rolling Returns and Gaussian Statistics -- Risk and Uncertainty -- Back to the Original Question: Is Volatility Risk? -- Is Linear Analysis Good Enough? -- Linear Regression Must Have Correlation -- The 60/40 Myth Exposed -- Discounted Cash Flow Model -- Chapter 4: Misuse of Statistics and Other Controversial Practices -- The Deception of Average -- One If by Land, Two If by Sea -- Everything on Four Legs Is a Pig -- Chapter 5: The Illusion of Forecasting -- The Reign of Error -- An Investment Professional's Dilemma -- Gurus/Experts -- Masking an Intellectual Void -- Earnings Season -- Are Financial Advisors Worth 1 Percent of AUM (Assets under Management)? -- Economists Are Good at Predicting the Market -- News Is Noise -- Chapter 6: The Enemy in the Mirror.

Real Time versus History -- Behavioral Investing -- Behavioral Biases -- Ambiguity Aversion -- Anchoring -- Availability -- Calendar Effects -- Cognitive Dissonance -- Communal Reinforcement -- Confirmation Bias -- Disposition Effect -- Endowment Effect -- Halo Effect -- Herding -- Hindsight Bias -- Loss Aversion/Risk Aversion -- Overconfidence -- Overreaction -- Prospect Theory -- Recency -- Representativeness -- Selective Thinking -- Self-Attribution -- Self-Deception -- Status Quo Bias -- Underreaction -- Bias Tracks for Investors -- Investor Emotions -- Investors as a Whole Do Poorly -- Chapter 7: Market Facts: Bull and Bear Markets -- Calendar versus Market Math -- Stock Exchange Holidays -- Understanding the Past -- Bull Markets -- Bear Markets -- Just How Bad Can a Bear Market Be? -- Bear Markets and Withdrawals -- Market Volatility -- Highly Volatile Periods -- Dispersion of Prices -- Secular Markets -- Secular Bull Markets -- Secular Bull Markets since 1900 -- Secular Bull Data -- Secular Bull Market Composite -- Secular Bear Markets -- Secular Bear Markets since 1900 -- Secular Bear Data -- Secular Bear Market Composite -- The Last Secular Bear Market (1966-1982) -- Chapter 8: Market Facts: Valuations, Returns, and Distributions -- Market Valuations -- Secular Bear Valuation -- Secular Bear Valuation Composite -- Secular Bull Valuation -- Secular Bull Valuation Composite -- Market Sectors -- Sector Rotation in 3-D -- Asset Classes -- The Lost Decade -- Market Returns -- Distribution of Returns -- Part II: Market Research -- Chapter 9: Why Technical Analysis? -- What Is Technical Analysis? -- I Use Technical Analysis Because . . . -- The Challenge of Technical Analysis -- Technical Indicators -- Some Things That Bother Me -- Bold Statements about an Indicator's Value/Worth -- Fibonacci Numbers -- Retracements.

Reversal and Continuation Patterns -- Japanese Candle Patterns -- Analyzing Time Series That Does Not Trade -- Support and Resistance -- Multicollinearity -- Analysis versus Reporting -- Analog Charts -- Polls and Surveys -- Miscellaneous -- Chapter 10: Market Trend Analysis -- Why Markets Trend -- Supply and Demand -- What Do You Know about This Chart? -- Trend versus Mean Reversion -- Trend Analysis -- Trendiness Determination Method One -- Trendiness Determination Method Two -- Comparison of the Two Trendiness Methods -- Trendless Analysis -- Comparison of Trendiness One Rank and Trendless Rank -- All Trendiness Analysis -- Trend Table Selective Analysis -- Indices Analysis Summary -- Domestic Trendiness -- International Trendiness -- Commodity Trendiness -- Sector Trendiness -- Data with History Prior to 2000 -- Data with History Prior to 1990 -- Data with History Prior to 1980 -- Trend Analysis on the S&P GICS Data -- S&P Sectors, Industry Groups, and Industries -- GICS Total Summary -- GICS Summary -- GICS Summary Table (With Inadequate Periods of Analysis Removed) GICS Table for All Trends Up to and Including 30 Days -- Trend Analysis in Secular Bear Markets -- Chapter 11: Drawdown Analysis -- What Is Drawdown? -- Drawdown Terminology -- The Mathematics of Drawdown and Equivalent Return -- Cumulative Drawdown -- S&P 500 Drawdown Analysis -- Drawdown Decline-S&P 500 -- Drawdown Recovery-S&P 500 -- Drawdown Duration-S&P 500 -- The Drawdown Message-S&P 500 -- Alternative Method -- Average Drawdown-S&P 500 -- Distribution of Drawdowns-S&P 500 -- Cumulative Drawdown for S&P 500 -- S&P 500 Index Excluding the 1929 Bear Market -- Drawdowns Greater than 20 Percent Are Bear Markets -- S&P Total Return Analysis -- Drawdown Decline-S&P Total Return -- Drawdown Recovery-S&P Total Return -- Drawdown Duration-S&P Total Return.

Distribution of Drawdowns Greater than 15 Percent-S&P Total Return -- Distribution of All Drawdowns-S&P Total Return -- Bear Markets-S&P Total Return -- Dow Jones Industrial Average Drawdown Analysis -- Drawdown Decline-Dow Jones Industrial Average -- Drawdown Recovery-Dow Jones Industrial Average -- Drawdown Duration-Dow Jones Industrial Average -- The Drawdown Message-Dow Jones Industrial Average -- Average Drawdown-Dow Jones Industrial Average -- Distribution of Drawdowns-Dow Jones Industrial Average -- Cumulative Drawdown for Dow Industrials -- Dow Industrials Excluding the 1929 Bear Market -- Drawdowns Greater than 20 Percent Are Bear Markets -- Dow Industrials Total Return Analysis -- Drawdown Decline-Dow Industrials Total Return -- Drawdown Recovery-Dow Industrials Total Return -- Distribution of Drawdowns-Dow Industrials Total Return -- Bear Markets for Dow Industrials Total Return -- Gold Drawdown -- Japan's Nikkei 225 Drawdown -- Copper Drawdown -- Drawdown Intensity Evaluator (DIE) -- Part III: Rules-Based Money Management -- Chapter 12: Popular Indicators and Their Uses -- Moving Averages and Smoothing -- Simple or Arithmetic Moving Average -- Exponential Moving Average -- Stochastics -- RSI (Relative Strength Index) -- Moving Average Convergence Divergence (MACD) -- A Word of Caution -- The Binary Indicator -- How Compound Measures Work -- Chapter 13: Measuring the Market -- Weight of the Evidence Measures -- A Note on Optimization -- Indicator Evaluation Periods -- Price-Based Indicators -- Price Short Term -- Price Medium Term -- Price Long Term -- Risk Price Trend -- Adaptive Trend -- Breadth-Based Indicators -- Advances/Declines -- Up Volume/Down Volume -- New Highs/New Lows -- Breadth Combination Measure -- Breadth Is Not Always Internal Data -- Slope of Moving Average -- World Market Climate -- Cyclical Market Measure.

Relative Strength -- Small Cap versus Large Cap Component -- Growth versus Value Component -- Breadth versus Price Component -- Relative Strength Compound Measure -- Dominant Index -- Trend Capturing Measure -- Advance Decline Component -- Up Volume/Down Volume Component -- Price Component -- Trend Capturing Compound Measure -- LTM-Long-Term Measure -- Bull Market Confirmation Measure -- Initial Trend Measures (ITM) -- Trend Gauge -- Mega Trend Plus -- Trend Strength -- Chapter 14: Security Ranking, Selection, Rules, and Guidelines -- Ranking Measures -- Trend -- Trend Rate of Change (ROC) -- Trend Diffusion -- Price Momentum -- Price Performance -- Relationship to Stop -- Relative Performance -- Power Score -- Efficiency Ratio -- Average Drawdown -- Relative Average Drawdown -- Price × Volume -- Adaptive Trend -- Weighted Performance -- Slow Trend -- Ulcer Index -- Sortino Ratio -- Beta -- Relationship to Moving Average -- Correlation -- Pullback Rally Analysis -- Pair Analysis -- Ranking and Selection -- Mandatory Measures -- Tie-Breaker Measures -- Ranking Measures Worksheet -- Ranking Measures Are All About Momentum -- Rules and Guidelines -- Buy Rules -- Sell Rules -- Trade Up Rules -- Guidelines -- Asset Commitment Tables -- Chapter 15: Putting It All Together: The "Dancing with the Trend" Model -- Weight of the Evidence -- Investing with the Weight of the Evidence -- Ranking and Selection -- Discipline -- Sell Criteria -- Tweaking the Model -- Model in Action -- Risk Statistics, Ratios, Stops, Whipsaws, and Miscellaneous -- Sharpe Ratio -- Sortino Ratio -- Correlations, Alpha, Beta, and Coefficient of Determination -- Up and Down Capture -- Whipsaws -- Stops and Stop Loss Protection -- Stop Loss Execution -- Mutual Fund Expenses -- Turnover and Taxes -- Watching a Tactical Strategy over the Short Term -- Benchmarking -- Full Cycle Analysis.

Actual Results from a Rules-Based Trend-Following Strategy-Dancing with the Trend.