Category Archives: Technical Analysis

Momentum is Price Breakout

Lately, there is a tendency to associate momentum, relative strength or cross-sectional, to quantitative analysis and label absolute momentum as technical analysis. Nothing can be further from the truth. Momentum is a trivial concept that is based on breakouts above … Continue reading

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SP500 Attractor

The S&P 500 index is trapped inside a 119-day consolidation channel between 2135 and 2040. There is an attractor near the February lows that offers strong support for a technical correction but a move below that would possibly require a … Continue reading

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An Ominous Random Pattern

I show in the blog that the candlestick pattern known as bearish engulfing is no more than a random formation even when it occurs near 52-week highs. Although this and a host of other related patterns are useless for making … Continue reading

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S&P 500: Largest 5-Day Gain Since 2014 Inside a 113-Day Consolidation Channel

The S&P 500 has had its best 5-day gain since December of last year but price action is still trapped inside a 113-day consolidation channel. The gain of the last five days could be a signal of a new uptrend … Continue reading

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Chartist Claims Debunked With Simple Math

A chartist I know sees a massive top formation in S&P 500. I replied to him that he has been wrong several times in the past with such random formations. He argued that although he is frequently wrong, almost 80% … Continue reading

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Double Inside Day in S&P 500

The double inside day is a simple symmetrical price pattern formation that is not very common. It signifies times of extreme uncertainty, often close to key pivot point. Backtests show that this pattern has no clear directional bias. Share

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There is Now a Good Excuse for a Correction

The technical picture of the stock market has been weak since last February but there was no trigger to cause a correction. The Fed waited for the trigger by delaying an interest rate increase and thus avoiding the blame for a … Continue reading

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