STA Blog

Crisis, what crisis? Can technical analysis help?

A word bandied around a lot of late, so I looked up its correct definition in my Collins Dictionary of the English Language (second edition 1986). The meaning is as follows: ‘1) a crucial stage or turning point in the course of something – esp in a sequence of events or a disease. 2) an unstable period – esp one of extreme trouble or danger in politics, economics, etc. 3) a sudden change, for the better or worse in the course of a disease _ Greek Krisis and krivein to decide’. The Merriam-Webster dictionary adds to 3) ‘an unstable or crucial time or state of affairs in which a decisive change is impeding – esp one with the distinct possibility of a highly undesirable outcome’.

Basically, the key concept is change. Earlier this month a book called: ‘Permacrisis: A Plan to Fix a Fractured World’, penned by none other than a trio of big hitters: Gordon Brown, Mohamed El-Erian and Michael Spence was published. The review I read claims the text has a striking chart that shows banking losses in 2023 exceeds those of 2008 – adjusting for inflation. The text also states: ‘’growth models which have focused too narrowly on privatisation and deregulation have outlasted their use-by dates’’. My question therefore is: is it a true crisis?

Or is it media-hype, brittle thinking and fear? Probably all three; as they say, bad news sells newspapers. Potentially it’s linked to binary options, all in or out, good versus bad, black or white, concepts that have come to dominate politics and social thinking. Extreme vocabulary is adding to the feeling of urgency: catastrophe, cliff-edge, conflict, unprecedented, uncharted territory. Which in turn leads to the new ‘in’ word: resilience. Basically this is a well-to-do person’s polite way of saying, ‘just get on and learn to deal with ongoing issues because they are probably here to stay’. In other words a trend, not a turning point.

This is something technical analysts make their bread and butter from: distinguishing between an on-going situation and its reversal. This can be short and sharp, like an island reversal or shooting star candlestick (or hammer after a bear market). Slightly slower like a double top/bottom, head/inverse head & shoulders, or very slow indeed like a rounded top or its grindingly slow equivalent at the bottom of a chart. All these must be seen in context with the type and range of move that preceded the patterns. A good place to start with some of these ideas is Steve Nison’s classic ‘Beyond Candlesticks’ book.

Posted in Finance, Markets, STA news, Technical Analysis, Technical Analysis Courses, Trading, Trending
Tags: , , ,

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.

Not ready to join? Stay Updated

If you want to learn more about membership and being part of the STA, sign up for our updates so we can keep in touch.


Monthly Meetings

The STA holds 11 monthly meetings in the City of London, including a summer and Christmas party where canapés and refreshments are served.


Latest Videos

As a service to our members, many of whom are unable to attend all our monthly meetings, we have been making videos of meeting presentations for several years.


STA Libraries

The STA has an extensive library of classic technical analysis texts. There are over 1000 books in the collection. It is held at the Barbican Library with a smaller...


Market Technician

Latest research and news

More Info

World Class Tutors

STA Course Lecturers

More Info


Be part of something special

More Info


View latest posts

More Info