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 used with a precise meaning. Some terms are, for whatever reason, used almost exclusively in the Crave Investor resource. Others are widely misused so may we suggest you use the definitions here.
Accumulation: net buying as seen through a trend of rising price with higher and/or increasing volume.
Average (see market average) and benchmark.
Barchart: 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.
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.).
Break out: A break out is the price action from a base. It has been shown through long term studies to be the most reliable uy signal know.
Bull market: Up trend.
Calls (call option): an option to buy assets at an agreed price on or before a particular 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.
Puts (put option): an option to sell assets at an agreed price on or before a particular date.
Resistance: A price point the market has proven it is unable to overcome or represents the price it may stall upward movement.
Set up: A "set up" for buy is not a buy signal. It's the behaviour or pattern that usually precedes a buy signal (see break out).
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.
Trend: Price direction or pattern in some other characteristic in a market or security.
Volume: the number of shares traded in a security or market average or index.
10-Q - quarterly earnings filings.