Technical Analysis of Stock Trends

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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Favorable signs. At last signs of Santa Claus?

Posted on Dec 23, 2011 by WHC Bassetti.

The Dow is taking out the recent high — at the lower horizontal line, and apparently will take out the next high as soon as it hears sleigh bells.  Perhaps more importantly it looks like this formation here from early November is a reverse head and shoulders (Kilroy) and a definitive break above the neckline should propel the market into the new year.

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Total confusion. Indicators galore. Nobody knows nothing.

Posted on Sep 03, 2011 by WHC Bassetti.

Barron’s is touting longs.  Joe Schmoo is getting short.  Dow Theory guys are buying.  Short interest is at historic high.  (A word about “negative” indicators here.  Some bulls take huge short interest as a contrarian signal that the crowd has to be wrong and so big short interest means a bull run is about to start.  Of course there is always that 10% of the time when the crowd does turn out to be right and you get your head torn off for fading it.)  The din of competing opinions is cacophonous.  Fortunately we observe these opinions (because that is what they are) and throw them in the trash.

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Zip Markets…

Posted on Aug 31, 2011 by WHC Bassetti.

When you want to send a big file to someone you zip-compress it.  The markets have zipped a crash and recovery (maybe) into 31 days, if you can believe that.  Faster than the fastest hands at the good old shell game the market compressed an 15.84% downwave into 14 days, then compressed a bottom and (perhaps) recovery (10.45%)  into 17 days (to present).  (The long downwave which demolished the market in 08-09 was 292 (elapsed) days.)

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Psychoid markets. Psychoid politics. Most fun since granma fell in the well.

Posted on Aug 27, 2011 by WHC Bassetti.

Courtesy of Robert Shouet (we don’t even look for these kinds of statistics) a member of  a chat group we read:  Morning Fri:  decliners exceed gainers 16.67-1.  Not to worry.  Afternoon gainers exceed losers 16-1.  NYSE NET decliners were -1922 morning and afternoon were +2055.

We have often described these kinds of markets as bungee markets.

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