Technical Analysis of Stock Trends

Apples and oranges — perhaps, tulips…

Posted on Feb 03, 2012 by WHC Bassetti.

We have a short time ago bought and remarked on the Qs.  Here is the story since March of 09.  That trendline, when broken (as in all the indices, created an airpocket into which the Qs were sucked, and then an extended sideways congestion.  As may be seen here prices have burst out of the congestion zone and are on a tear.  Much of this is owing to Apple which drives much of the tech index.  By many fundamental metrics Apple is undervalued, which may sound strange, but then fundamentalists are a strange bunch, religious or market.

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Slow down and smell the tulips…

Posted on Jan 30, 2012 by WHC Bassetti.

And time to reprise our famous lecture about tulips which first saw the light of day in 1999 in our seminars at U.C. Berkeley Extension.  When we first started talking about tulips students thought they had wandered into a gardening class by mistake. Not.

The classic text is Extraordinary Popular Delusions and the Madness of Crowds by MacKay.

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Achtung! Don’t go to sleep here!

Posted on Jan 28, 2012 by WHC Bassetti.

There is never any lack of disagreement amongst the punditry.  This is also true for technical analysts.  And for fundamental analysts.  And for analysts of all other stripes (and spots).  That’s why we have horse races and super bowls and the stock markets.  In the chart above we see one of the objects of disagreement — or ammunition for the bear side.  Converging trend lines are the sign of the wedge, which is thought to have bearish implications.  Some pundits are looking at this and calling for a “correction”.  10% is what they are looking for.  Readers will remember our market dictum, that all waves generate their antithesis.  The upwave generates the downwave (or sidewave), and vice versa. So it is good to be alert here for the inevitable reply to this upwave which now counts 27 days.  Be a Boy Scout.  Be Prepared.

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Disregard this letter also.

Posted on Jan 22, 2012 by WHC Bassetti.

http://stockcharts.com/h-sc/ui?s=$SPX&p=D&yr=0&mn=6&dy=0&id=p40392582161&a=254727527

You can use this link to see a larger chart.

We haven’t stopped detesting forecasting, but there  is a question in the waves here that should at least be mentioned.  Our last comment on potential for this trend, using the Wyckoff measuring method,  forecast a wave high of 1860.    While this seems fanciful to us, there is another method we have talked about before — the rule of seven.

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A Dow buy signal.

Posted on Jan 19, 2012 by WHC Bassetti.

It is impossible to interpret yesterday’s action as anything but a buy signal in the Dow.  Prices went to a new recent high on a power bar — and — the downtrend line from March was broken on the same bar.  We are buying for our personal account.  Taking out the March highs will be very bullish.

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