Does Technical Analysis work?

does technical analysis work?

Technical Analysis does work to a degree. However, one can’t rely on technical analysis to provide the full picture. Additionally, when you one utilises technical analysis, one needs to customise the settings and not rely on standard settings. Everyone uses the default setting, so by following the default setting you are going to see what everyone else sees. If every knows something it is longer useful.

So far, the first part is coming to pass. Once the MACD’s complete the bullish crossover (weekly charts), we expect a mini feeding frenzy that will ultimately pave the way for the next top. Novice traders are about to get clobbered; “the term he got beaten within an inch of his live” comes to mind. Market Update Nov 11, 2021

Next year, technical analysis will only work well if used in conjunction with Mass Psychology. Those that fail to take this route are better of tossing skull bones or reading tea leaves. As for fundamentals, toilet paper will be much better; at least it’s good for one swipe.

 

We expect the markets to mount a sharp rally to the end of the year, and this could extend into January. While we expect the markets to top, don’t expect them to break down immediately. There will be several head fake moves before the market breakdown. The intensity is expected to be sharp, the duration short. However, after the primary selling wave is done, the markets are expected to tread water for some time before breaking out. Still, many strong stocks will bottom and break out long before the market puts in a bottom. Even if the markets don’t surge to new highs next year, many stocks will. This is what we mean when we state that we expect the “disorderly” nature of the market to worsen.

 

Market forces are changing very rapidly, and we monitor the psychology behind the markets very closely. Hence, we might issue a general sell signal. Before we continue, remember Tactical Investors never panic. Such a sell signal is not be construed as a signal to panic. It simply implies that not all stocks might trade to the suggested exit points on time, and the better option would be to seek the best possible price on most of our holdings. An example of a general sell signal. Close the following positions out when the Dow trades in the 38,7K to 39,3K ranges. At that point, individuals would start to slowly (remember slow but sure as we never panic) enter GTC orders. The idea would be to aim for the best possible exit price. On the same token, we might also issue a general buy. For example, deploy 1/3rd into the following companies when the Dow trades in the 29 to 30k ranges. We could also mix match by issuing specific exit points on particular stocks, while lumping a group of others into the general sell category.

Our strategy will be based on what the markets are doing. Once again, remember, we never panic. A Tactical Investor is last to leave the room and the first to enter. We stroll in, and we stroll out; leave the running to the fools.

 

Idiots index

The idiot’s index is moving to the Neutral zone, indicating that intelligent individuals (but dumb investors) are becoming more confident. This indicates that market action will be volatile as smart individuals generally make for the worst investors.

 

Conclusion

So does technical analysis work. In our experience when one combines it with mass psychology and custom settings the outcome is usually quite positive.

 

 

Other Articles of Interest

Dow trends: Is Dow 33k Next?

Dow trends: Is Dow 33k Next?

There is a 50/50 chance that before the Dow trades to new highs, it could shed 1000 to 1500 quickly ...
Read More
Tech Trends 2020 The Future of Farming

Tech Trends 2020: The Future of Farming

In this section, we only discuss future trends; if we are going to establish a position in a company that ...
Read More
Investment guru end

The death of the Investment guru

It is quite interesting to note that despite the Nasdaq putting in a series of new highs, bullish sentiment refuses ...
Read More
AI trends

AI trends: The Future is all About AI?

This chart below shows you how formidable a lead the US has over the rest of the World in terms ...
Read More
cannabis market

Cannabis market

The chart speaks a thousand words, so, what can we conclude from this trend. One people like to feel good ...
Read More
helicopter money

What is helicopter money?

What is helicopter money: It’s a deadly trick to prop the markets Helicopter money is here, and nobody is complaining ...
Read More

401k Losing Money; 41 percent of Adults not saving for retirement

Editor: Vladimir Rothstein | Tactical Investor 401K Losing money is only  part of the problem The bigger problem is that ...
Read More

D.C. pension board ignites debate

D.C. pension board ignites debate after pulling 'direct' investments from fossil fuels How about a great, random article to get ...
Read More

What Is My Socioeconomic Status: Only Corporate America is Thriving

What Is My Socioeconomic Status? A key sign of financial health is savings; if one does not have a decent ...
Read More
Inequality Crisis chart

Inequality Crisis; 62 people own as much as 3.6 billion poor people

Inequality Crisis Things continue to go from bad to worse;  if you look at the dates, you will notice that ...
Read More
Dollar Crash Imminent

Dollar Crash Imminent: True Or Rubbish?

The French Finance minister; the one-eyed man in the land of the blind states that a dollar crash is imminent ...
Read More
Psychological Ploys

US bank stocks and Psychological Ploys in the stock market

Before we determine whether US banks stocks are cheap, let’s look at what the Fed is doing in the markets ...
Read More
US jobless claims

US jobless claims No Longer Connected To Stock Market

US jobless claims while higher are pulling back, regardless of whether they pullback or not, they are no longer as ...
Read More
Better Trader

How to Become A Better Trader?

If your goal is to become a better trader, print the above statement and put it aside and over the ...
Read More
Another reason this bull market will not buckle soon

Low Rates Will fuel the biggest Bull Market rally in History

Low Rates Central bankers wanted to put the fear of God into the masses and to a large degree they ...
Read More
burning currency

Currency War and Negative rates; The Race To The Bottom

Currency War and Negative rates If you had told individuals before 2009 that we would be living in a negative ...
Read More
apple investment analysis

Apple investment analysis: Why Is Apple Investing in Didi

By Tom McGregor, CNTV Commentator Apple investment analysis Cupertino, Ca.-based Apple Corporation has enjoyed grand success in recent years. Its ...
Read More
Shell Company Secrecy End

Shell Company Secrecy End

Shell Company Secrecy End: 22 Investors Managing Over $505 Billion in Assets Sign Letter Calling on Congress Let’s quickly look ...
Read More
An Attractive Alternative to Gold Standard

An Attractive Alternative to Gold Standard

A highbrow is the kind of person who looks at a sausage and thinks of Picasso. A. P. Herbert The ...
Read More
danish bank

Negative Interest Rate Mortgages; Mortgages That Pay you Money

Negative Interest Rate Mortgages We have entered the era of negative rates and in Denmark, many families are getting paid ...
Read More
Problem is Fractional Reserve Banking

Problem is Fractional Reserve Banking-we don’t need Gold standard

Naysayers and Dr’s of Gloom keep chanting the same song of doom that all paper money will cease to exist ...
Read More