Do you see all the ‘!’ I used in the title? I must be a TA trying to convince you of something. Sensationalism is about all that some TAs have, after all. They baffle you with bullshit because they sure don’t help you with any kind of reasonable analysis based only on charts.
I am talking about the TAs – prominent in the precious metals, but plying their trade all over the markets – who use their charts in order to pretend (to themselves maybe, as well as to you) to be able to render usable analysis with no other analysis needed. Got a chart? Got comprehensive analysis! Err, no propeller head.
The precious metals sector has one guy who combines terrible ghost stories and doom and destruction for stocks with imagined technical analysis on gold, silver, the miners and the dollar. Throw him out the window due to a) his perma views on the end of the world and b) his very spotty (at best) TA. #clownshow
The sector also boasts another #clown using only TA, from which he renders conclusions based on the shapes he sees. That’s it! No need for any fundamental underpinning, sentiment analysis or anything else. He’ll give his conclusions based on shapes and patterns and when it’s time to change his tune he’ll whipsaw to a new view because… the pattern broke down! Ha ha ha.
Anyway, the longer I do this the sicker I get looking at my supposed competition. It’s embarrassing, actually. So the clowns above ply their trades to gullible readers, but what about the larger media?
Well, my broker, Fidelity, has signed on this garbage outfit called Benzinga to pollute my otherwise helpful interface with crappy news and analysis. Much like Zacks, it’s just automated crap spewing conclusions out there onto the interwebpipes with the confidence that people really are stupid, or really don’t care.
One stock I have on watch is called Nutrien (NTR). I took a look at the daily chart and got excited. I went to Fidelity to research the stock and up pops this nugget from Benzinga.
Ha ha ha.
As I have repeated til I’m blue in the face, a ‘death’ or ‘golden’ cross will most often be met with a move in the direction opposite to that the man – or in this case automated garbage media – trying to influence you with it predicts. Later, perhaps weeks or months down the road the cross may actually play out to spec. But first it has to finish screwing over those who believe these TA clowns and act upon their hysteria.
Indeed, NTR may be right at the beginning of such a ‘screw ’em’ move. You just can’t make this stuff up.
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This Post Has 8 Comments
It took me a few weeks of reading and testing, but I basically came to the same general conclusion about TA.
However, you do seem to use 50DMA quite a bit as a guidepost. Is that because of the crowd effect — others are using it so it becomes true/useful to some extent?
In some of my more recent trades I have bought some stocks just below the 50DMA and some above. Resulting movement was still totally unknowable/random and not at all linked to the starting point.
There may be trends longer term, but I cannot believe there is anyone who can tell you with better than a 50/50 chance that a stock will be up or down at the open tomorrow based off past charting.
And I think I know and did follow some of the people you sort of mention. Ones that would be on KWN, or 321gold. Hah. Almost every chart on 321 no matter who has created it always shows a small short downturn in gold or silver or GDX or GDXJ followed by a moonshot.
I suppose the small drop is always put in there to cover their ass.
I use the SMAs 50 & 200 because they are the standard. More than that, they do 100% advise of the trends. Trends are super important.
For example, I note in the gold bug sphere that a promoter can be identified by the fact that she will continually write about and obsess upon gold stocks even though they are so often in downtrends. Meanwhile, other markets are in uptrends. That’s a dead giveaway. I mean, you can speculate on bottom feed but at least know what it is… a bottom feed.
The death cross thing jumps the gun. Grossly. A moving average cross may or may not eventually resolve into a new trend but just because they’ve crossed does not at all mean that the trend is changing. That’s media pap. Eyeball harvesting.
LOL, 321gold sometimes links my posts! But a little inside baseball… Bob only seems to do so when I either focus on the PMs exclusively or say bad things about the stock market. I don’t think he likes it when I have good things to say about stocks. So yeah, that’s a curated venue.
Back to TA, it’s a bunch of malarkey if not used for just its basics, esp. EXISTING trends. Momentum and other indicators also help. But TA on its own in a vacuum is snake oil.
You don’t have to answer this next comment/question, but I believe I first came upon your stuff on Slope. I have tuned out basically everyone in the financial blogging sphere except you, Tim and Mish.
But I gotta say, I am very close to tuning out Tim. I love his writing, but it’s got such a bearish stance it generally puts me in a depressed mood. And the commenters, well, that goes political nearly every post which I absolutely pulled away from years ago!
I may read him and Mish every other day or so, but only pick the entries that look interesting.
I know he sometimes writes bullishly, and if we ever have another huge crash it will be interesting to see if his style changes to bullish.
I think you’ve got a good middle ground, which I wish more people did, especially politically.
I’m in the same boat. I stopped reading slope as there isn’t really much to ‘read’. It’s a good indicator for a specific breed of bear sentiment though.
One thing I’ll give Tim is that there is ZERO censoring of anything I write. If it’s bullish on stocks he publishes it. If it’s not, same. As noted above for example, I think 321gold only links me when he agrees with what I’ve written. Other gold sites like GoldSeek publish no matter what. And I know for a fact that Peter Spina does not agree with half of what I write, esp. when I am shitting on the gold ‘community’.
Yeah, I find I don’t participate in the comments @ Slope. Not my kind of crowd. Okay people, generally, I think, but too severe in their views for me. As for Tim, he is what he is. I like him and think his heart is in the right place, but I feel like he does not view the whole picture the way it needs to be viewed.
In another post I talked about value stocks. So I did a screen with some parameters using PE, EPS growth, debt levels, % short, etc, and nearness to 52 week low. I selected a few stocks a number of days ago. Many were up, some were down.
Then today comes along, and with a seemingly minimal 0.5% drop on S&P, virtually all went red, many with current 4 and 5% losses for the day.
This does not seem to bode well for “anything” to do well in a downturn. Leaning heavily still toward sitting out in savings and SHV until some kind of drop occurs.
And if a drop does occur, when and where is the bottom? I’m willing to pay…
And if a drop doesn’t occur, how am i getting back in?
Yikes I feel myself mentally seizing up! :-)
I reserve the right to be wrong, but back in June we viewed this as a much needed market relief bounce and nothing more. Now that it’s in process it began FOMO’ing the FOMOs, on cue. So while I could be wrong I am sticking with the original plan and taking profits and keeping losses small.
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