Investment Terms and Definitions
Many investment terms may be found online by entering the search term (word) or using a relevant source such as Investopedia. Some terms are harder to find while others are very specific but sometimes misused in mainstream use. A break out for example has a specific application in our research.
TSX holiday schedule
U.S. stock market holiday schedule
Accumulation: net buying as seen through a trend of rising price with higher and/or increasing volume.
Average (see market average) and/or benchmark.
Barchart: barchart.com - Free resource for data lists including volume advances, new highs and
percentage gainers and decliners.
Base(s): A base, i.e. price base, is a range in the price of a market or security. In stocks it is defined as the range with a decline of at least 20% (from the high). Bases define a stock's condition and have proven to provide significant historical validity on price direction as well as the set up for a buy signal. See the self study on bases.
Benchmark: Usually an equity market average or index such as the S&P 500.
Bear market: Decline of 20% or more in a major market average. In Canada the major market average is the TSX and in the U.S. it's the Nasdaq, S&P 500 and/or the Dow Jones (D.J.I.A.).
Bearish reversal. A single session market event when the price hits a new high then reverses to a loss.
Break out: A break out is the specific single session price and volume advance clearing a base. It has been shown through long term studies to be remarkably sensitive for identifying the start of an up trend and therefore the most reliable buy signal. A "failed break out" may be the single most timely indication of a broader market correction.
Bull market: Up trend.
Calls (call option): an option to buy assets at an agreed price on or before a particular (expiry) date.
Chart: Price and volume data presented in a graphic format using price in the y axis and time in the x axis.
Consolidation: A range defined by a relatively shallow decline from the high to the low of the range. In the stock market an individual stock's consolidation depth can be up to 20%.
Confirmation rally: A large gain (usually 1.5% or more) in a major market average in higher volume than the day before.. Historically it occurs four to seven days from the market low but can happen later. The confirmation rally is used as a buy signal from the market average serving as one component in decision making to invest.
Correction: An intense down trend characterized by larger losses and prolonged periods of weakness. Technically, a stock is in a correction when it falls by at least 20%.
Distribution: refers to net selling in a market average or security. It can be identified as a session where the price fell in higher volume (than the prior session). Historically three to five distribution days in a leading market average (in a short period of time) is the hallmark of a developing correction.
The economy: here's something to watch - https://www.youtube.com/watch?v=PHe0bXAIuk0
Intraday: Price performance during the session.
Market: The term can be used to describe similar assets such as stocks or real estate but it can also be used to describe conditions.
Market average: an index used to represent a market. For example the S&P 500 is representative of the economy and used to describe what has happened in the stock market.
Measure: See indicator.
Nanos index options. Check it out here.
Odd lot: A share quantity other than a Board Lot which is 100 shares. A share position of say 575 shares would have five board lots and one odd lot position of 75 shares.
Ontario Securities Commission: htts://www.osc.ca/en/securities-law
Paper stocks: If you drop it on your foot and it hurts it's a resource or commodity related market (or stock). Otherwise the stock is a "paper" stock. Banks, tech, etc are paper stocks.
Puts (put option): an option to sell assets at an agreed price on or before a particular date.
Put/call ratio
Resistance: A price point the market has proven it is unable to overcome or represents the price it may stall upward movement.
Securities Exchange Commission X - @SECGov
Set up: A "set up" is the market behaviour or pattern that precedes a buy signal (see break out).
S.P.A.C.: It’s well known that SPACs tend to IPO at a price of $10. Without operating income or expenses, they should stay around that price until a deal is announced. After that, the fundamentals of the target and the economics of the deal also matter to valuations.
Stockcharts.com: free resource for charts. For chart settings go here.
Stockwatch: free resource for listing stock and E.T.F. symbols, charts and news for securities using press release headlines. Go to stockwatch.com - quotes - quick quotes x20 for the listing feature.
Support: The price point the market has proven it is able to stay at or above or is implied.
Strategy
Trend: Price direction or pattern in some other characteristic in a market or security.
Value
Volume: the number of shares traded in a security or market average or index.
10-Q - quarterly earnings filings.