Metamorphosis

Well, it's interesting, but I'm not sure I agree with his premise. Therefore, I don't know whether anything I have to say will be pertinent.

For one thing, he doesn't define "TA", though at the end he does say that TA "attempts to predict prices via the analysis of sentiment". If this defines the scope of TA for him, then, yes, he's probably justified in his concerns.

However, as I said, I disagree with his basic premise, so whatever metamorphosis the market may have undergone (or be undergoing) is irrelevant to the "TA" I employ and the method by which I trade.

Sorry I can't provide anything juicier. :p
 
Quote from Babak:

This is an excellent article IMO about TA and how the market's internals may have changed:

http://www.cross-currents.net/charts.htm

After you read it, post your thoughts and comments.
More...


Thank you for the excellent article. It is certainly thought-provoking. It had never occurred to me that indexing could be a self-perpetuating phenomenon, as presented. This may well be an excellent example of George Soros' theory of reflexivity.
 
"what is the future for TA, which attempts to predict prices via the analysis of sentiment? "

The conclusion is true only if if the premisce is true. But I deny that the premisce is true at least not primarily true - that is to say sentiment indeed plays a role but which is SECONDARY comparatively to the PRIMARY CAUSE behind TA - TA is not driven by sentiment as PRIMARY CAUSE, sentiment is PROVOKED by TA which has as PRIMARY CAUSE something that legendary traders like Wickoff suspected without demonstrating it but that my model can demonstrate with SCIENTIFIC EQUATIONS as I said in the other thread:

http://www.elitetrader.com/vb/showthread.php?s=&threadid=25144&perpage=6&pagenumber=11

"On the origin of patterns according to legendary Richard Wyckoff ... and you know what my model could be viewed as a QUANTIFICATION of what he calls "the 'composite operator' theory, which stated that large pools work to manipulate the price of stocks, leaving definite footprints behind on the chart in patterns of accumulation and distribution"


https://www.lbrgroup.com/index.asp?..._Futures_patter

'Starting with a pattern' February 1999 - excerpt

Richard Wyckoff was a trader and market analyst who was active in the market
around the turn of the 20th century, about the same time as Charles Dow was
writing for the Wall Street Journal. As a trader who was curious about the
market, he arrived at a methodology that concentrated on price and volume
analysis, point and figure charting, and a comparison between related
markets and indexes. He wrote several books about the market, including the
famous 'Rollo Tape,' a book about the subject of tape reading written under
an assumed name. His writings were later compiled into a comprehensive
stock market training course, which is still offered today. Wyckoff
postulated the 'composite operator' theory, which stated that large pools
work to manipulate the price of stocks, leaving definite footprints behind
on the chart in patterns of accumulation and distribution. Wyckoff also
believed in the theory of 'cause and effect' whereby the market would build
up of supply or demand within a trading range.

"

Quote from Babak:

This is an excellent article IMO about TA and how the market's internals may have changed:

http://www.cross-currents.net/charts.htm

After you read it, post your thoughts and comments.
More...
 
Since Farmer is mentioned in the article, I also said:
http://www.elitetrader.com/vb/showthread.php?s=&threadid=25144&perpage=6&pagenumber=12

"Many scientists (like Farmer, Philippe Bouchard and others ) have quantified such hypothesis - using agents modelling - once again when one stays with fuzzy concept it is often seducive but when it is quantified it isn't any more or not so much. Quantification of such hypothesis have encountered the El Farol problem (see http://www.elitetrader.com/vb/showthread.php?s=&postid=342257&highlight=farol#post342257): the crowd cannot accord because there are too many possible strategies (expression used in the article is "ecology of diverse strategies") so the crowd alone cannot explain the real behavior of the market. Feedback loop exists for sure, but it cannot tell the cause that's why such kind of model are just qualitative because quantitatively they can't predict real market, they only simulate fictitious market."
 
The problem also comes from the fact that they don't distinguish between two different types of TA : TA originally - when it has been founded - means Market's action (Wyckoff, Dow, Elliott, Gann and my model belong to such class although my model is not TA per se but an econometric model but it can demonstrate that Chartism is not so irrational as pretended by most academics who belongs to quantitative school - since my model is classic quantitative modelling I could oppose them on academic point of view) whereas pseudo-auto-qualified as "Modern" TA by their inventors are based on STATISTICAL INDICATORS - that can be meaningless or useful that is not the point here. They apparently means STATISTICAL INDICATORS. Then it is absolutly STATISTICALLY FALSE to ASSUME that such indicators follows NORMAL LAW for - translated from a french statistical book untitled "Statistical techniques : rational tools for making choices and decisions" written by a chief engineer of Military Air Force -

"Contrary to natural phenomenas, economical phenomenas must take into account the intervention of humans who don't always obey to random law"

They suppose that market's sentiment indicator follows such normal law so their conclusion. But again the premisce is false: because market's sentiment involves humans it cannot follow a NORMAL random law.
 
Today's illustration with testimony of Fund Manager Martin Armstrong :

"At the start of the silver manipulation I was flat. I had taken all profits and closed out all short positions. Silver was trading around $4.29 when PhiBro walked across the ring and handed to my broker an order to buy 1,000 lots of silver every penny down for as far as you could see. They intentionally showed me the Buffet order. Later Bob Gotlieb from Republic Bank call me and tried to get me to join the manipulation. He said, "Something big is coming down in silver," and when I asked who was behind it, he said, "Your friends in Connecticut." After being approached several times to join the manipulation, I reported to my clients that "they" were back. I would not have used the term "they" if it had been someone other than the same crew as in 1995. I was told that the silver price target was $7. I reported that information on our website. I was NOT short. I knew what they were capable of doing. Then I left the country for my usual fall tour. I was invited by the government of China to discuss the Asian crisis. I visited the government there in December 1997. Upon my return silver was at $6.40 and everyone indeed had been led to believe that it was me because the orders were routed through Republic to give the market the impression that I was the one buying the silver. In fact, it was Republic buying the silver itself and moving it to London. "

Quote from harrytrader:

"what is the future for TA, which attempts to predict prices via the analysis of sentiment? "

The conclusion is true only if if the premisce is true. But I deny that the premisce is true at least not primarily true - that is to say sentiment indeed plays a role but which is SECONDARY comparatively to the PRIMARY CAUSE behind TA - TA is not driven by sentiment as PRIMARY CAUSE, sentiment is PROVOKED by TA which has as PRIMARY CAUSE something that legendary traders like Wickoff suspected without demonstrating it but that my model can demonstrate with SCIENTIFIC EQUATIONS as I said in the other thread:

http://www.elitetrader.com/vb/showthread.php?s=&threadid=25144&perpage=6&pagenumber=11

"On the origin of patterns according to legendary Richard Wyckoff ... and you know what my model could be viewed as a QUANTIFICATION of what he calls "the 'composite operator' theory, which stated that large pools work to manipulate the price of stocks, leaving definite footprints behind on the chart in patterns of accumulation and distribution"


https://www.lbrgroup.com/index.asp?..._Futures_patter

'Starting with a pattern' February 1999 - excerpt

Richard Wyckoff was a trader and market analyst who was active in the market
around the turn of the 20th century, about the same time as Charles Dow was
writing for the Wall Street Journal. As a trader who was curious about the
market, he arrived at a methodology that concentrated on price and volume
analysis, point and figure charting, and a comparison between related
markets and indexes. He wrote several books about the market, including the
famous 'Rollo Tape,' a book about the subject of tape reading written under
an assumed name. His writings were later compiled into a comprehensive
stock market training course, which is still offered today. Wyckoff
postulated the 'composite operator' theory, which stated that large pools
work to manipulate the price of stocks, leaving definite footprints behind
on the chart in patterns of accumulation and distribution. Wyckoff also
believed in the theory of 'cause and effect' whereby the market would build
up of supply or demand within a trading range.

"
More...
 
misc15.jpg
 
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