Technical Analysis of Stock Trends

Chart hints in the Dow and the S&P

Posted on Jun 27, 2010 by WHC Bassetti.

Here is a chart posted by one of our bright graduate students at Golden Gate University.  It is a weekly chart of the S&P.  Readers will remember that weekly bars are used for very long term trading systems, and we used a weekly system in our study of the Dow (Sacred Chckens, the Holy Grail and Dow Theory).  The student is speculating and is aware of it.  He has correctly identified a candidate Basing Point  (short) in the SPX.  While it is not impossible that the formation is a bear flag (and time will tell) we still prefer to look at it as a bottom of the down wave.  It may also be a rally or upwave against the downwave started April 26.  The next chart down may give us a hint as to the next development.

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Dumpity, bumpity, dumptity…

Posted on Jun 22, 2010 by WHC Bassetti.

These are times of high anxiety for investors who lack a compass and a barometer.  If you have no instruments how do you know what to do in a storm — which is what we are in at the moment.

On the other hand if you have a method for analyzing the market which sets out clear signposts you can watch the snakes bite each other to death with some (if not a lot) equanimity.

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$spx, $indu — a reversal day?

Posted on May 17, 2010 by WHC Bassetti.

Today looks very like a reversal day.  After markets selling off earlier in Asia an excursion over 100 points down was completely expectable.  To reverse field and finish up on the day is characteristic of a reversal day.  As always (readers will begin to think this is our middle name) we are suspicious.  But at the very least for the bull case this is more optimistic than finishing at the bottom.  That would have been a very black bar indeed with pessimistic expectations.  Possibly very pessimistic expectations.

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Dow 13750? Predicting is always difficult…

Posted on Apr 25, 2010 by WHC Bassetti.

Predicting is always difficult, and above all when it concerns the future.  As Nils Bohr was fond of saying.

First of all let us make clear that we do not stand behind our predictions.  Or, as John Kenneth Galbraith said, the purpose of economic forecasting is to make astrology look good.  The interpretation of the chart above is less a question of analysis than it is a species of long term economic forecasting.  It is what is called a point and figure chart.

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FRE, FNM, S&P, look like a Christmas stocking

Posted on Dec 28, 2009 by WHC Bassetti.

If these are worthless as that undistinguished New York boutique said, why do people keep buying them?  And besides that they are exhibiting buy signals today.  As an interesting conjecture, could that be a flag?  We’re going to buy some more on the off chance that it is a flag.

And……

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