Investing 101 !

The KD Stochastic is a popular indicator in the oscillator family, which is one of the largest tools in the technical analysis toolkit. The Stochastic indicator tells you the position of a security within its recent range in % terms: 1% means it’s at the lowest 1% of the recent range, and 99% conversely that the security is the top of the price range of the last few days. The KD spread is the spread between a short stochastic (D is the 3 days stochastic) and a longer one (K is the 14 days one)


Oscillators are used to gauge bottoms/tops and inversions. The theory is that if the oscillator is close to the bottom of its range, then so is the stock and vice versa.

Stochastic Indicator

Technical Indicators 

Momentum measures the percentage change in a stock price over a certain period of time. For example: “S&P 500 fell 10% this week”

Momentum is a highly significant measure for market participants. It helps gauge the size of a move, and provides psychological benchmarks. For example, when the market falls 20% it is considered to be in a “bear market”.

Momentum is used to gauge entry points and the strength of a trend

Momentum is the measure of percentage change in price over a certain period of time, from a day to a year or more.

The chart below shows the trailing PE for SPX in the last 40 years.

| ![trailing PE for SPX in the last 40 years!](https://storage.googleapis.com/toggle-webcm/https://storage.googleapis.com/toggle-webcm/trailing_PE_for_SPX_b2f3b0b4c4/trailing_PE_for_SPX_b2f3b0b4c4.png) ||:--:|| Trailing PE for SPX in the last 40 years|


Momentum is used to gauge whether the market is trending or conversely has reached overextended levels.