Clq - charts, technical. Only., page-49

McHale et al:

Some very nice chart work here, thanks.

When looking at charts I use pretty basic metrics: candlesticks, volume, MACD, MAs (three period). Nothing fancy.

Just want to add a few thoughts on technical analysis.

1. I have noticed in the last few years increasing numbers of false breakouts, false breakdowns, truncated or abbreviated patterns, etc. Last week's action in CLQ is an example.

I think this is because of the proliferation of people like us using the same types of technical analysis. Prices are frequently not behaving as "classical" chart analysis would suggest a lot of the time.

2. The second thought is that because CLQ and other developers do not have conventioanal financial metrics to
underpin them, investor sentiment plays an exaggerated role in the fluctuations, for better or worse.

Because of this, Elliott Wave Theory may have application in mining spec stocks, until and unless fundamental prospects of the subjects change substantially.

I am neither a proponent or a detractor of Elliott Wave Theory, which purports to describe chart action solely based on the internal psychology of investors watching price action. If there is something to it, EW may have some validity in applications where investor sentiment is the key variable, and fundamental news is not a major factor.

I have done a little bit of crude application of EW to CLQ; there were some plausible correlations; but in the end, I believe in the fundamentals of CLQ, and EW is done without any respect to fundamentals. But for those inclined it might be a fruitful approach to technical consideration on mining spec stocks.

GLTA