Tag Archives: chart patterns

Gold False Breakout to the Downside

Posted on April 10, 2013 by Michael Harris

Spot gold has gained more than $45 after testing longer-term resistance near $1,540 last week. Some technical analysts have recently focused on some, in my view, random pattern formations on the gold chart and have pointed to an imminent collapse. Recent … Continue reading →

Posted in Technical Analysis | Tagged , , | Comments Off

The Main Cause of Failure of Some Popular Technical Trading Methods

Posted on December 21, 2012 by Michael Harris

Indicator based trend following and classical chart patterns are two trading methods that were developed in mid 20th century using data from the equity markets mainly and worked well during an extended period of time in those markets due to the presence of autocorrelation. After 1998 things … Continue reading →

Posted in Market Statistics | Tagged , , , , , | Comments Off

Massive Money May Start Chasing the Market

Posted on July 28, 2012 by Michael Harris

Another self-fulfilling prophecy may fail soon and those who “sold in May and went away” may start returning back to the market and chasing it. I warned about this possibility in a post in the beginning of May. The strategy of basically trying to enforce a self-fulfilling … Continue reading →

Posted in Technical Analysis | Tagged , , | Comments Off

S&P 500 Index Between a Stabilizing Attractor and Resistance

Posted on July 10, 2012 by Michael Harris

After a fairly predictable up move that started on the 26th of last month, the S&P 500 index is now moving sideways between resistance near 1,374 and attractor support at 1,329. This sideways motion around 1,360 will continue until fundamental information provides … Continue reading →

Posted in ETF Analysis | Tagged , , | Comments Off

A Test of the May Low in Silver is Highly Probable

Posted on June 21, 2012 by Michael Harris

If there is a pick-up in economic activity and indications about a possible uptick in rates, precious metals will fall. If there is further decline and talk about QE3, precious metals will rally. Technical analysis can only identify price levels with some … Continue reading →

Posted in ETF Analysis, Technical Analysis | Tagged , , , | Comments Off

HFT Robot Flocking is the Emergent New Order in the Markets

Posted on June 10, 2012 by Michael Harris

Flocking is the behavior of a group of birds when in flight. Such behavior is similar to the swarm behavior of insects and the herd behavior of animals. This behavior is emergent and not governed by central coordination. Flocking accomplishes certain objectives, like for example … Continue reading →

Posted in Technical Analysis | Tagged , , , , | Comments Off

Another Chart Pattern Failure Worth Mentioning and Some Typical Arguments of Technical Analysts

Posted on February 24, 2012 by Michael Harris

It took just one week to invalidate a typical reversal rounding top formed in SLV, the Silver ETF. This marks another major failure of technical analysis, one of the many witnessed in the last couple of years. Should traders stop using this … Continue reading →

Posted in Technical Analysis | Tagged , , | Comments Off

Trading Based on Classical Chart Patterns is Modern Alchemy

Posted on December 15, 2011 by Michael Harris

Medieval alchemy aimed, amongst other things, at the transmutation of base metals into gold. Trading based on classical chart patterns, like triangles, head and shoulders, pennants, etc. is a form of modern alchemy because it aims at the transformation of simple geometrical shapes found on price charts … Continue reading →

Posted in Technical Analysis | Tagged , | Comments Off

Dow 4,000? What Technical Analysis Says or Doesn’t Say About Such Possibility

Posted on November 26, 2011 by Michael Harris

Recently I read an analysis about the possibility of Dow dropping to 4,000 or even as low as 1,000. The claim was that technical analysis of long-term charts supports such a possibility. I argue here that it is not pure technical analysis that … Continue reading →

Posted in Technical Analysis | Tagged , , | Comments Off

The Four TA Patterns on the GLD Chart that Failed

Posted on November 8, 2011 by Michael Harris

This post could have the title “Beware of Greeks Baring Gifts No 2″ as a sequel to my original post on October 1, 2011 where I warned about the pending failure of the obvious pennant formation in GLD, a chart pattern … Continue reading →

Posted in ETF Analysis, Technical Analysis | Tagged , , | Comments Off