TECHNICAL OVERVIEW Technical analysis involves research into the demand and supply forsecurities an d commodities based on price

studies. Technical analysts usecharts or computer p rograms to identify and project both short and long-term price trends. Unlike fu ndamental analysis, technical analysis is notconcerned with the financial positi on of a company or supply/demandstatistics for a commodity.Some forms of technic al analysis, classical bar charting in particular,provide well-defined risk/ rew ard parameters and measuring objectives. Asthe technician observes the evolution of a pattern, specific options strategiesmay be far more suitable for establish ing a position than a trade of outrightlong or short. This is especially true in the futures markets with the propen-sity to gap open beyond reasonably placed p rotective stop-loss orders.Because of the problems of interpretation of price, v olume and openinterest on an options chart, all of the technical analysis in thi s book will beperformed on the chart of the underlying instrument.