The STA Blog - Technical Analysis
He’s given talks to us before, and no doubt will be doing so in the future, but before that, pencil in this date: Tuesday October 13th at 18:30 – via webinar. This is our next monthly meeting where he’ll assess […]
In any business transaction, be it financial, real estate or retail therapy, for every buyer there must be a seller. One can either sell something one already owns, or sell ahead of delivery to lock in the price. The latter is at the very heart of, and the reason for, the creation of futures contracts; so that farmers can fetch a guaranteed price for their estimated crop or herd.
Above, a Tweet last week from Nouriel Roubini, one of the few economists I used to listen to; now he too is jumping on this silly bandwagon. As the Queen famously asked of the 2008 financial crisis (at the London School of Economics), ‘’why did no one see it coming?’’. What hope is there then of this lot spotting not only when the corner has turned, but how much momentum there’ll be in the next move?
Years ago disgruntled from Surrey would write a letter to the editor; pedantic fool complain about spelling and punctuation; ‘expert’ in the subject pick on the minutiae in an academic paper. Same old, same old as these issues exist today, transported to electronic means of communication, but remain constant themes. The difference is in the relative speed of action and reaction, and the subsequent issues raised.
With lockdown being de rigueur this season, and all the talk of family bubbles, travel corridors, quarantining and social isolation, I happened to spot a few potential island reversals in the charts. Which then set me thinking about their validity, considering the other idea that gaps should be filled.
The rather dry title of this month’s STA webinar presented by Andrew Pancholi who promised us a ‘’40 minute whistle-stop tour of 30 years of work’’. He lived up to his threat and I urge all and sundry to watch this fascinating presentation – regardless if one’s interested in technical analysis, cycles, or financial history.
In a week when even President Trump was called out for spreading dubious facts on social media, you know that the format has a big problem. The obvious scare-mongering is often easy to spot, and we all know that screaming headlines sell newspapers. But when it comes to the coverage of financial markets, the economy, and long term trends, the record is truly terrible.
Almost exactly 10 years ago – 6 May 2010 at 14:32 US Eastern Time – the Dow Jones Industrial Average suffered its second worst ever intra-day loss of 998 points – in just 5 minutes; it then took half an hour to get back to where the shambles started. Five years on, in April 2015 at the age of 36, Navinder Singh Sarao was indicted on 22 charges of financial misdemeanours. The authorities realised that market integrity was at stake and so, the Commodity Futures Trading Commission, Securities Exchange Commission, the FBI and the UK Met’s boys in blue swung into action.
The STA’s May monthly meeting was, unfortunately, conducted via webinar because of the Corona-19 virus; a pity as veteran (3rd time) invitee Zaheer Anwari is someone I look forward to catching up with over networking and drinks at our regular events. What I found out in this week’s presentation is that he has had a varied and interesting career, though he claims to be from a rather ordinary background.
As a handful of countries start lifting corona-virus related restrictions, Britain looks set to enter another 3 weeks of lockdown. Tuesday the 14th April was the second STA Monthly Meeting that was held online due to limits to the size of indoor gatherings. Our guest speaker, Sankar Sharma, was obviously delighted to be invited, saying he was proud to be ‘among the best in the world of technical analysis’.
Shakespeare’s Julius Caesar came to a sticky end on the 15th of March, lending the phrase negative connotations ever since. In fact, an Ide is a very ancient word for certain dates in the calendar, the first full moon of the month (March, in this case). Tonight, the 7th April, we have another full moon, a pink super bright one as the moon’s elliptical orbit around the earth brings it closer to us than usual. It actually looks orange, and the ‘pink’ comes from the phlox that flowers at this time of year.
A very brave Joshua Mahoney of the IG platform faces an incredibly tricky time explaining the carnage in all sorts of markets on the morning of Monday 9th March 2020 – plus, trying to forecast the next step. Well done, we say, as this is precisely the time and space when we need clear advice and cool heads.
A phrase dreaded by market makers in all areas of finance who, because they are obliged to make two-way prices for existing clients throughout the business day, means there are more difficult orders on the way and the most recent price the client accepted was because it went in their favour. In other words, the dealer’s got stuck with a nasty position and scrambling out of it is about to get even harder.
Media outlets – and not just financial ones – have been getting terribly excited about the share price of US electric vehicle-maker Tesla. Admittedly the firm has stolen a march over its competitors, and Mr Musk has an army of ardent fans who almost believe he’s a visionary who can walk on water. But at the heart of speculation is whether, and how quickly, can his shares hit the $1,000 mark. Price action recently has been almost vertical – with a sharp stumble here and there. Cassandras, predictably, are saying it’ll end in tears.
Robin Griffiths, who has pedigree, overviews the last 50 years: Because the STA also has 50 years under its belt
Well, we’ll have to give it to him, he’s done 53 years as a professional technical analyst/strategist, despite a BA in economics from Nottingham University. His first City job was at stockbrokers Phillips and Drew – one of the many names I remember from long ago – which produced, in Robin’s opinion, some of ‘’probably the best fundamental analysis in London.’’ Well, I bet that’s not what you expected! Exempted from 9 of the 13 actuarial exams required, he tidied up the situation ASAP.
A little social media bird let me in on a surprise. For her interview on IG TV, hosted by Victoria Scholar, veteran technical analyst Patricia Elbaz arrived with a congratulatory card and cake. This is because Victoria had passed her STA Diploma Part I exam with ‘amazing results’. I’m sure all STA members will want to extend their best wishes to all other successful candidates.
Many markets this January have been a ‘Tale of Two Cities’ – or halves anyway. This has created a series of very interesting, and sometimes rare, single or two-candle patterns, reminding me of the song ‘Candle in the Wind’. Like the song’s lyrics, ‘’and it seems to me you lived your life, like a candle in the wind, never knowing who to cling to, when the rain set in’’. My gut instinct is to look carefully and special candles to see if they’ll give you a steer as to which way the wind is blowing.
That’s how Adrian Schmidt said he felt as a fundamental analyst slotted between two technical analysts at yesterday evening’s special panel debate organised at the STA’s usual (and lovely) venue in conjunction with the ACI. To an almost full house – maybe because of the ACI hook-up, maybe because investors make plans in January, maybe because of the calibre of the speakers – the session was riveting.
I’m probably preaching to the converted, but: beware media headlines. Bad news is shocking, and shocking sells newspapers. Sensationalist wording gets eyeballs on social media. Slick and surprising video footage gets clicks; so it goes, and has always; therefore journalists are trained to write exciting copy. In fact, larger media outlets have teams whose sole job is to come up with catchy headlines.
The TV and media team and IG are a slick lot with a busy production schedule. As well as producing text and video content, they coordinate news feeds for the platform and do their own analysis. From Monday to Friday there are 3 TV slots: at 07:30 London time (Pre-European open bulletin); 10:30 Charting the Markets; 16:00 Trading look ahead.
- Introducing our next speaker: Charlie Morris, a regular at STA monthly meetings September 16, 2020
- Colours, clashes and clichés: How and why use colourful charts September 4, 2020
- Confidence and the Corona Virus: What are consumers to make of it all? August 27, 2020
- How best to present technical analysis: Media formats and delivery systems August 21, 2020
- ‘Too Much and Never Enough: My Family Created the World’s Most Dangerous Man’ – A tell-all memoir by Mary Trump August 13, 2020
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The views and opinions expressed on the STA’s blog do not necessarily represent those of the Society of Technical Analysts (the “STA”), or of any officer, director or member of the STA. The STA makes no representations as to the accuracy, completeness, or reliability of any information on the blog or found by following any link on blog, and none of the STA, STA Administrative Services or any current or past executive board members are liable for any errors, omissions, or delays in this information or any losses, injuries, or damages arising from its display or use. None of the information on the STA’s blog constitutes investment advice.