By Ashley Gulke Leavitt

Three tools to understand the basics of technical analysis

Analyzing the technical side of the markets can help determine what the market- place thinks in regard to worldwide weather, economies, politics, exports, feed usage and more. When looking at a price chart, visualize where the market thinks supply and demand should meet; this price point provides the answers to what the marketplace is thinking. The age-old expression "a picture’s worth a thousand words" applies to charting, too. Because humans drive the markets, trends and patterns are established over time.

The concepts on the chart at right can be applied to all commodities and time frames. This alone makes the study of technical analysis much easier to understand. The descriptions will help you read technical charts using three tools: the bull flag formation, the MACD indicator and trend lines.

(click to see an enlarged image)

Ashley Gulke Leavitt works with the Gulke Group in Chicago. She is the author of "Technical Analysis: Fundamentally Easy," which explains the tools the group uses to analyze technical charts. For more information, visit www.gulkegroup.com.

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