Everything makes sense in hindsight with all the various indicators, but I have absolutely NO clue what to expect looking toward the right of the chart. Its probably an experience thing so I was wondering how do people make trading decisions, especially if they're thinking long term like couple of weeks or months? A couple of whipsaws could completely undo any signals these indicators seem to currently imply...
How would you analyze this chart?
- Thread starter nxt7
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Everything makes sense in hindsight with all the various indicators, but I have absolutely NO clue what to expect looking toward the right of the chart. Its probably an experience thing so I was wondering how do people make trading decisions, especially if they're thinking long term like couple of weeks or months? A couple of whipsaws could completely undo any signals these indicators seem to currently imply...
if any analysis includes the word if it should be ignored (including this one which already used the word twice.)
The chart bounced of the lows/support a few times so I would be bullish
OMG, if you had knowledge of chart reading, you could get rid of 80% of all those indicators. TA is used to add to your skills of chart reading, but as you can see, it shows lacking of education. Trading Long Term is more of a waiting game of price getting to an area whether trendlines or Bollinger bands then bouncing off to see if area holds price and risking small amount. Perhaps getting some charting books could help you. I would not tell you which indicators to keep, cause if you don't understand price, they won't help you.
And indicators like price don't imply anything, your skills and education of reading charts, give aid to the right of the chart, much study, reading and back testing. Learning more about risk management.
And indicators like price don't imply anything, your skills and education of reading charts, give aid to the right of the chart, much study, reading and back testing. Learning more about risk management.
Market is in a trading range. No other conclusion to be drawn. Buy the bottom of the range. Sell the top of the range. That's it for now. Everything between is most likely just "noise".
Short term movements (one hour / day / week action ) are "random"; driven by rumor, headline reaction, supply and demand flow ( "funds" big block purchases and sales ), etc. The key to statistical success and "deep" geometric compounding, is in building investment models based on statistically significant quantitatively * based variables keyed off of "long term" trends ( multi months, years ). This means abandoning "subjective" interpretation ( trendlines, support levels, candlestick, Fibonacci, Elliot wave, chart patterns, divergences, etc. )
Long term trends relating to the general equity market, reflect the assimilation and integration of macro information ( expected earnings, Federal monetary flows, fiscal decisions, underlying economic strength/ contraction, etc. ) that is pertinent to trend "persistence" and higher incidence of positively skewed statistical outcomes (ie. odds for positive outcomes are much greater in using long trends for forecasting / asset allocation decision making ).
Another component that one can put an advantage on one's side towards long term maximization of asset growth is the selection of the stock universe(s) in which to invest.
Academic /empirical studies have shown that ( the buy and hold ) of small cap value has produced the highest decile alpha of all stock universes**. Mid cap growth has been promising over the past 30 years. Prior to the 21st century, it was difficult to invest in small cap value as a whole. With the advent of ETFs, it is available in low expense offerings. Same with mid cap growth. Investing in these areas within a Roth IRA or other tax deferred account, provides further advantages.
* quantitative meaning that one can empirically apply the method via mathematical representation onto a robust data sample and generate repeatable results and output in a probabilistic framework
** https://docs.google.com/document/d/1kToqLWLISRk4n4YnSzv1hT5kBN54l5CvhwGgDwJKPJI/edit?usp=sharing
Long term trends relating to the general equity market, reflect the assimilation and integration of macro information ( expected earnings, Federal monetary flows, fiscal decisions, underlying economic strength/ contraction, etc. ) that is pertinent to trend "persistence" and higher incidence of positively skewed statistical outcomes (ie. odds for positive outcomes are much greater in using long trends for forecasting / asset allocation decision making ).
Another component that one can put an advantage on one's side towards long term maximization of asset growth is the selection of the stock universe(s) in which to invest.
Academic /empirical studies have shown that ( the buy and hold ) of small cap value has produced the highest decile alpha of all stock universes**. Mid cap growth has been promising over the past 30 years. Prior to the 21st century, it was difficult to invest in small cap value as a whole. With the advent of ETFs, it is available in low expense offerings. Same with mid cap growth. Investing in these areas within a Roth IRA or other tax deferred account, provides further advantages.
* quantitative meaning that one can empirically apply the method via mathematical representation onto a robust data sample and generate repeatable results and output in a probabilistic framework
** https://docs.google.com/document/d/1kToqLWLISRk4n4YnSzv1hT5kBN54l5CvhwGgDwJKPJI/edit?usp=sharing
Depends on your perspective. When I, with absolutely zero equestrian skills attempt to sit on a horse the outcome is random, or least that's my interpretation. A jockey has a different opinion.
WTF is statistical success? Do you mean being successful as a statistician or do you mean success?
Deep geometric compounding? Deep? Is deep a mathematical or financial term? Or did you use it purely as an adjective to sex up your sentence?
It's not subjective interpretation if it's mechanically applied. No need to abandon it.
"Good economy, market goes up. Analysis using higher timeframes is more reliable."
This is relevant to the technical analysis of SPX?
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How would you analyze this chart?
I wouldn't.., makes my eyes bleed
Paralysis by analysis also comes to mind
Distilled down..., this ^
RN
I wouldn't.., makes my eyes bleed
Paralysis by analysis also comes to mind
Distilled down..., this ^
RN
The better question is whether or not at any point in the previous three weeks there was more clarity on that chart...One thing about trying to make longer term predictions with these index charts is that there might only be a few really attractive long/short levels and the rest of the time it does its best to squeeze anyone positioned the wrong way...There are some very good bloggers/technicians out there that can look at that same chart and see very clear patterns, find some decent analogs, etc, etc...
Hi nxt7,
Not a complete analysis, but perhaps something at least...
There's a lot going on within this range, the 2000 level for starters. Price has interacted with it 8 or so times, depending on how you count it. This level is significant, and although I don't know if price will continue up or reverse down from here, it may be a good place to trade from (or thereabouts). If wanting to pick a direction, then it's a case of waiting to see what happens during the next days. If price breaks its rising TL and demonstrates weakness*, then I'd be inclined to take a short, providing there was a technical entry with reasonable R:R.
Speculating further out (if I had too), I'd be conflicted, in that based on the current information I am bearish short term (next fews days / couple of weeks) but bullish longer term (next few weeks / months). Of course, anything can happen, and this is all speculative. I wouldn't be surprised if it pops up somewhat from here before going lower.
Regardless, there's a lot of uncertainty. 90% of the time, in my case at least, things are too uncertain to merit taking a position, either because of conflicting signals, unfamiliarity of the price action, lack of trading activity or expected change in volatility. It's a case of waiting until the opportunity is obvious.
* My definition of weakness: failure to reach or break highs, breaking of recent lows or/and downwards momentum.
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