Category Archives: Technical Analysis

A Not So Surprising Drop in Gold Prices

Although some analysts thought yesterday’s drop in precious metals was surprising, there were plenty of technical warnings that a correction was looming. As a matter of fact, last Friday we warned about the possibility of a bull trap in GLD. Share

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The Bullish Pattern in SPY That Was Actually Bullish

In a post on April 3, I talked about “a very bullish formation in SPY” during a time when the financial media was talking about a major correction. The post included detailed quantitative analysis that showed that the formation under … Continue reading

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The NASDAQ-100 is Still Overbought

Although biotechnology and social media stocks corrected yesterday, with proxy ETFs like IBB and SOCL losing -2.61% and -2.26%, respectively, the NASDAQ-100 index is still in overbought territory and may need to form a solid base before it rallies again. … Continue reading

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This is What Happens to Naive Technical Analysis

Most technical analysis indicators lag prices significantly and most simplistic chart patterns are too obvious to be profitable. Recent price action in GLD is an example of the fate of naive technical analysis. Share

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A Textbook Head and Shoulders Pattern

You can find this “a textbook head and shoulders” cliche in many technical analysis books, websites and social media messages. Today I found one of those in the chart of a stock. The downside potential is about 12%. Textbook stuff… Share

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An Island Reversal Squeezes Out Death Cross Shorts in Gold

This blog has warned about a short squeeze coming in gold in this June 11 post. It is interesting how an island reversal, which is a classical chart pattern, invalidated a 50-200 moving average death cross and a descending triangle. Share

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Short Squeeze After a Failed Massive Double Top in Utilities ETF

Hopes of a double top in XLU were shuttered yesterday after a violent squeeze that took ambitious shorts by surprise. A gain of 2.27% in just one day should be enough to convince all chart traders that obvious formations fail more often … Continue reading

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