Post by Dave on Jan 1, 2023 3:23:30 GMT -8
Good morning and welcome to the new year. If you haven’t already, this would be a great time to make your New Years resolution list. I find that using a pencil, with an eraser, is more productive.
Bearish pattern: Apple has formed a 'massive double-top'
A great discussion on TA in the discussion section.
It appears that 2022 was not a good year for the “buy and hold” method of investing. Perhaps 2023 will provide some recovery. It’s been said that the stock market can stay irrational longer than you can stay solvent. I hope that they are wrong.
Bearish pattern: Apple has formed a 'massive double-top'
From Ed Ponsi's "'Double' Trouble for Apple Could Actually Help the Overall Market" posted Friday by TheStreet:
It's time to wrap up what has been a tough year for the markets. What does 2023 hold in store? The answer may come down to one stock.
Sifting through the damage of 2022, some of the hardest hit stocks once led the charge higher. Here are some year-to-date figures:
Alphabet (GOOGL) is down 38.7%
Amazon (AMZN) has lost 49.39%
Meta Platforms (META) fell by 64.08%
Tesla (TSLA) is down 65.55%
As bad as those numbers are, they could be worse. Apple (AAPL) has lost 26.7% for the year. That's a better performance than many of its large-cap peers, yet I'd argue that the Cupertino-based tech giant has a worse chart than any of the names listed above.
Apple has formed a massive double-top pattern. This bearish formation has been under construction for 15 months. Using an old-school measuring technique, the pattern suggests that Apple could fall as low as $90. Earlier this week, the stock hit an 18-month low...
We're about a month away from finding out if Apple will fall like so many of its peers.
If it does, there will be a silver lining. It could mark the beginning of the end of this period of market malaise.
My take: Technical analysis works until ... you know the rest.
It's time to wrap up what has been a tough year for the markets. What does 2023 hold in store? The answer may come down to one stock.
Sifting through the damage of 2022, some of the hardest hit stocks once led the charge higher. Here are some year-to-date figures:
Alphabet (GOOGL) is down 38.7%
Amazon (AMZN) has lost 49.39%
Meta Platforms (META) fell by 64.08%
Tesla (TSLA) is down 65.55%
As bad as those numbers are, they could be worse. Apple (AAPL) has lost 26.7% for the year. That's a better performance than many of its large-cap peers, yet I'd argue that the Cupertino-based tech giant has a worse chart than any of the names listed above.
Apple has formed a massive double-top pattern. This bearish formation has been under construction for 15 months. Using an old-school measuring technique, the pattern suggests that Apple could fall as low as $90. Earlier this week, the stock hit an 18-month low...
We're about a month away from finding out if Apple will fall like so many of its peers.
If it does, there will be a silver lining. It could mark the beginning of the end of this period of market malaise.
My take: Technical analysis works until ... you know the rest.
A great discussion on TA in the discussion section.
Tommo_UK said:
Don’t bash TA. It works when it works because its principles are proven over thousands of years of backtesting. Just because algos and quants gamed the natural order and cycles observed over millennia doesn’t mean it doesn’t offer valid insight. These days the full extremity of a pattern rarely works itself out because it can be anticipated and front-run but it’s still an invaluable set of tools – if you know how to use them. It’s actually an art not a science and crosses philosophical boundaries and mashes them up with pattern recognition. Combine the two with an understanding of the company in question and its business model and you have the edge that gave committed AAPL investors 2001 onwards the guts to hold on. Thanks to a lot of discussion, TA and well informed speculation to confirm it invalidate trends others failed to spot.
All of my early successes were on this basis and on the old TMO AAPL board I’d post daily Support and Resistance at three levels top and bottoms ( R1, 2, 3 and S1, 2, 3) along with Bollinger Band levels which were often accurate to within cents on daily trading and over time gave the confidence to know when to go all in and when to strep out temporarily to avoid those amazing air pockets only AAPL seemed to hit.
Before quant trading took over big time, it was TA that ruled AAPL’s movements and in turn begot traders and the earlier automatic trading algos following what seemed to work.
Once everyone realised to what was going on after a few years in the run up to 2008, suddenly TA didn’t work any more because it became gamed. Game theory took over as quant trading swamped the market running roughshod over comfortable predictability with no holds on a tsunami of fake orders designed to drive a price up or down in coordination between the rise of hedge funds with no financial limits whidh could be pulled nanoseconds before being filled ensuring failure of what was just trend painting not real price movement. Retail investors were screwed.
As you say, it works until it doesn’t but it’s when the most people dismiss it that you find it has returned to being useful.
Like now. Every call I’ve made has been a combination of looking at the market and geopolitical influence in the background and doing TA on AAPL for confirmation. It’s worked flawlessly for me.
I don’t think I’ve been on the wrong side for a few years now and unlike CNBC taking heads I actually nail my buy and sell points in advance and announce when I’d buy/have bought and likewise if I’m getting out. TA is a science in as much as it’s just math but combing several signals to overlay and see the rich deeper picture is more of an art form most TA zealots just can’t do because they lack the imagination to paint, and just draw by numbers.
So there’s TA, and there’s TA if you get my drift. They are superficially the same but totally different.
Don’t bash TA. It works when it works because its principles are proven over thousands of years of backtesting. Just because algos and quants gamed the natural order and cycles observed over millennia doesn’t mean it doesn’t offer valid insight. These days the full extremity of a pattern rarely works itself out because it can be anticipated and front-run but it’s still an invaluable set of tools – if you know how to use them. It’s actually an art not a science and crosses philosophical boundaries and mashes them up with pattern recognition. Combine the two with an understanding of the company in question and its business model and you have the edge that gave committed AAPL investors 2001 onwards the guts to hold on. Thanks to a lot of discussion, TA and well informed speculation to confirm it invalidate trends others failed to spot.
All of my early successes were on this basis and on the old TMO AAPL board I’d post daily Support and Resistance at three levels top and bottoms ( R1, 2, 3 and S1, 2, 3) along with Bollinger Band levels which were often accurate to within cents on daily trading and over time gave the confidence to know when to go all in and when to strep out temporarily to avoid those amazing air pockets only AAPL seemed to hit.
Before quant trading took over big time, it was TA that ruled AAPL’s movements and in turn begot traders and the earlier automatic trading algos following what seemed to work.
Once everyone realised to what was going on after a few years in the run up to 2008, suddenly TA didn’t work any more because it became gamed. Game theory took over as quant trading swamped the market running roughshod over comfortable predictability with no holds on a tsunami of fake orders designed to drive a price up or down in coordination between the rise of hedge funds with no financial limits whidh could be pulled nanoseconds before being filled ensuring failure of what was just trend painting not real price movement. Retail investors were screwed.
As you say, it works until it doesn’t but it’s when the most people dismiss it that you find it has returned to being useful.
Like now. Every call I’ve made has been a combination of looking at the market and geopolitical influence in the background and doing TA on AAPL for confirmation. It’s worked flawlessly for me.
I don’t think I’ve been on the wrong side for a few years now and unlike CNBC taking heads I actually nail my buy and sell points in advance and announce when I’d buy/have bought and likewise if I’m getting out. TA is a science in as much as it’s just math but combing several signals to overlay and see the rich deeper picture is more of an art form most TA zealots just can’t do because they lack the imagination to paint, and just draw by numbers.
So there’s TA, and there’s TA if you get my drift. They are superficially the same but totally different.
It appears that 2022 was not a good year for the “buy and hold” method of investing. Perhaps 2023 will provide some recovery. It’s been said that the stock market can stay irrational longer than you can stay solvent. I hope that they are wrong.