Sunday, July 27, 2008

Can charts tell the future?

Dizzy rainy melancholic regular Sunday in rural uptight Connecticut - nothing to do nowhere to go - watched "The Messenger: The Story of Joan of Arc" - one of my favorite movies. It has everything good movie suppose to have - Faith, Betrayal, Corruption, Blood ( no love thou ). Why it always takes so long to recognize The Great - burnt in 1431 - canonized 500 years later.

Anyhow, the theme that interests me most for the purpose of this post is:
Joan of Arc: "I saw so many signs I wanted to see"

We, technicians, looking at the charts and we seek the truth, but while doing so we color interpretations with personal opinions, preferences, likings and believes.

Is it possible to justly interpret the chart or we just diluting ourselves and simply creating PLAN OF ACTIONS?

If XYZ goes above ... THEN
do that;
ELSIF XYZ goes below ... THEN
do this;
sit and wait;

[pardon me for IF statement - as I am a former programmer it is in my blood forever, damn it!]

My friend Brandt from Trade Guild just today posted a great article on advantages and disadvantages of Fundamental and Technical Analysis - highly recommended reading. He used (HOV) - [HOVNANIAN ENT INC] as an example.

My opinion is that longer term technical analysis hold more water ( as longer term charts have less noise and not so easily manipulated by huge institutional money flow )

That being said I have a "trivia question":
Using the very same (HOV) Brandt from Trade Guild used - where and when do YOU think it is going - we know the PAST - can we see the FUTURE?

My take is: somewhere in the middle of August it will start continuous move up
Would really love to hear what YOU think.