Monday, August 11, 2014

Sometimes a "bear flag" is actually a bottom - a chance to mock anti-Keynesian technical analysts


How's that R2K bear flag coming along?


Seems to me there's probably some sort of rule in technical analysis to help you determine whether a bear flag is really a bear flag, or actually a bottom.

Other than, y'know, you just calling it a bear flag and then getting proven wrong the following week as your flag channel gets broken to the upside.

I mean, if "technical analysis" is nothing more than "oh, things could go down from here, unless they go up" - or in this case "yeah this thing is going up a bit right here this week, but don't be fooled, it might turn around and go down" - then there doesn't seem to be any reason whatsoever to pay attention to technical analysis, is there?

I mean, sure it is actually useful if your "technical analyst" looks at the break of the R2K bear flag to the upside and tells you "that's the signal, now you can buy the R2K cos it's broken the bear flag to the upside".

Cuz if the bear flag was broken to the upside, then the bear flag wasn't a bear flag, was it?

But if your favourite "technical analyst" instead just pretends his "bear flag" call never happened, and goes back to whining about fiat money and Ben Bernanke and the %-above-SMA ratio, and AAII and Frankenmarket and lemmings and such, then he's not giving you a technical buy call at a technical local bottom, is he?

In which case he's not even a real "technical analyst", is he?

When's the buy call?

Never?


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