ta charts, page-61

Wayward1,

My apologies for not responding sooner. My daughter has monopolised my time for the past two days as she is seeking to buy her first car. Conversations have extended to “I like that one” – Why? “because its pretty.” Has it got an engine in it? “An engine…..?”

I have always taught my kids to spend their money wisely and I am proud of the way she is going about this. She now understands timing chains, double overhead cams, 4 valves per cylinder, VIN numbers and ABS braking. We haven’t progressed to getting grease on her hands yet, but there is hope.

I haven’t had a chance to absorb your comments to my post Wayward1, but hopefully will do so once my daughter has completed her purchase. It looks like the thread has been diverted a little. I never engage in TA/FA debates. I’m accepting of someone’s rejection of TA. It just indicates to me a lower level of understanding of the deep connection between the two. Happy to help someone understand the connection, but certainly have no need to convince them of it. You are much more willing to engage in the debate than I am Aka. I’ve stood by as you taken on the non-believers on numerous occasions before.

Before I go, I will make one observation that seems relevant to me regarding TA/FA and psychological consequences associated with PLV’s 65 day trading halt. Shareholders went into the halt as owners of an explorer with expectations of being a producer. Associated with those producer expectations were a set of share price expectations. Shareholders came out of the halt with information that significantly enhanced producer and price expectations. For some, the psychological impact of this was instantaneous, for others it took longer. Some have a higher standard of proof and are yet to fully adjust. The implications of these psychological adjustments are reflected in the chart. PLV formed a bottom in late Oct/2012, immediately after the halt. To me, price volume signals revealed in the chart to the left of this date reflect a totally different set of expectations versus those to the right. While the low is a convenient marker of this change, the adjustment was actually occurring over weeks before and after.

Many TA’s apply linear indicators to non-linear share market data and are criticised for doing so. Conversely, econometrician’s successfully and pretty much exclusively use linear methods upon non-linear data. The difference is that econometricians identify structural breaks in the data which dictate that prior data will be a poor indicator of future direction. In 2038, when someone looks at the PLV chart, they might ask why did the chart change behavior in late 2012. An appropriate answer will be that there was a structural break at that time when PLV transitioned from an explorer to a producer. More advanced TA will use non-linear techniques to reflect the nth degree polynomial structure of share market data, reducing the need to identify structural breaks. These techniques will also adjust for the non-stationary and non-gaussian nature of the data. Even my limited understanding of Fib/time analysis tells me how some of these adjustments are made by this technique. That is why I have committed to learn more about it.

Kayzed, hopefully some of the above will answer a few of the questions you raised in your post.

Thanks again for the feedback WW1. I’ll apply your thoughts to my chart as soon as this car thing is out of the way.

Cheers
Bleasby