How Would You Know?
I found this article at Real Clear Markets, and it comes from Jason Haver at Minyanville. Now I don’t know Mr. Haver nor have I ever heard of him and I rarely read Minyanville, but the catchy title –”SPX, NYA, And Gold: 7 Charts Offering Clues to the Market’s Next Move” — caught my attention.
First, I will credit the author for giving a sense of time to his market call. He is clearly talking about a trade, and he provides parameters for failure (a stop loss) and success (when to take profits). So this is good. What is bad is how the author arrives at his conclusions.
In the first chart that he shows, the author writes: “Clearly seen in this chart is a market that’s been essentially undecided for at least the prior three years.” See figure 1.
Figure 1. Chart
There is nothing clear about this chart! And the analysis is so bad it is pitiful. Any analysis that isn’t reproducible is not trustworthy. If you can not quantify your observations, than how do you benchmark what you are doing?
And I am sure this image will clear everything up. See figure 2.
Figure 2. Chart
Ok, I don’t mean to pick on Mr. Haver but I am. His work must be good as he writes for a big time web site…I guess. But in all honesty, how would you know?
Category: Technical Analysis, Uncategorized
Yes, those charts are so typical of a lot of what’s been out there over the last several years, and what has undoubtedly misled so many green investors looking for an edge (been there). Cherry picking trendlines and, oh, yes, Elliott Wave (shiver).
I admire what Todd Harrison has attempted to do at Minyanville, I suppose, but there’s a whole lotta dreck over there too, for sure.
I like the word “dreck”
LOL!
Very apt, eh?
Wow I very rarely ever comment on anyone’s site, but I have to say, I found both this site and PretzelLogic’s relatively recently and was building quite a bit of respect for both of them. I think the author here does a great job of presenting sentiment, adding in some simple technical analysis, and some common sense observations that help give me ideas and keep me on the right side of the market. This is post is quite a dissapointment to see, the author had thus far conveyed a very professional, sane attitude.
As stated right at the beginning of the article, this is a comment about an author this writer has never read before and so knows nothing about what he is presenting and immediately complains that the charts use a form of analysis that needs a book to describe and some experience to understand as well and can’t be explained with a computer algorithm: if above pivot, bullish, if below pivot, bearish. Maybe some individuals use non-standard analysis to achieve non-standard returns?
Here is another thought: Maybe the charts are also compicated because the market is complicated and indecisive right now? (hint: it is)
Then we have the peanut gallery above:
Cherry picking trendlines, huh? Guess I’m not experienced enough to have learned that trendlines are an exact science. BTW, where can I get software to draw trendlines for me, would save a lot of time, no point in doing it myself if everyone that draws them is going to come to the same conclusion anyway, right?
Sorry you had a bad experience with Elliott Wave (following Prechter maybe? Heard he has made some bad calls, haven’t been around long enough to know myself, though he seems OK to me, Pretzel is not a big fan from what I gather). I have found its comprehensiveness absolutely stunning and I plan on dedicating a lot of time to learning it and giving it a very fair shot before I draw any conclusions.
Oh well, as I can see from the URL, at least the author had sense enough to calm down and change the title to “How Would You Know?” instead of “This Garbage”.
For those with open minds and a willingness to expend some effort, check out his site, he works very hard to help his readers understand the market, and has been repeatedly warning how tricky it is right now (unless maybe you think the last month has been a piece of cake to trade or invest in?). Hopefully I can continue following this one as well going forward without putting up with these types of blunders, the different styles offer nice diversity of analysis. I can understand the frustration with analyst wannabes leading new traders/investors astray, but at least verify the person you are criticising has a track record of poor analysis and calls (hint: you can find thousands of them on wall street and mainstream publications). Don’t forget people also need to learn to fend and think for themselves too.
Maybe the author should take a peek at Pretzel’s short article describing his real time call of the 2009 bottom available on his site and decide if he is still a poor analyst.