Good evening rruff,
Your question is a fair question and I will answer it honestly.
First of all I have studied T/A since 1995 and feel confident that I understand it and have a proven trading track record using it but I do not consider myself an expert at anything. To do so would be me saying that I know all there is to know about technical analysis, which I do not. I will always consider myself I student of Technical analysis.
On to your questions:
So, my question is this and I'm having a hard time expressing it. Where you have a currency affecting the movement of money in an equity, can one explain the movement of the equity with the same TA statistical rationale as one uses in more typical analysis?.
My answer is that I think you are reading too much into what technical analysis is suppose to do. More simply stated I think that you may be trying to use a combination of F/A and T/A to rationalize a trade(?) Although that may be a possible mindset for some, it is more than likely going to cause a state of mass confusion for the average trader.
By using technical analysis alone or with limited F/A, you will find that it alone will measure all of the F/A data for you so that you won’t have to do F/A. Yes, I know that sounds too easy but it is true.
TA, if I understand the theory, explains the statistical movements of buy-sell decisions over time, with sufficient number of decisions (volume, liquidity,etc.). What is the affect of adding another variable which would skew all decisions at once.
That would depend on the variable that you introduce. Are you talking about flying airplanes into the Twin Towers on 9/11? I was watching 2 and 5 minute tick charts of the NASDAQ when that happened and I personally saw the markets going to hell in those time frames and existed all of my positions on 9/11, PRIOR TO ANY NEWS RELEASE. T/A saved my ass in that case.
My above example is my interpretation of what I think you meant in your question. If I am wrong then please restate your question and I will re-answer it.
Many commentators feel that the SA government will try to weaken the rand. This would likely cause DROOY to spike as much as 50% in a day. It keeps falling though because nobody knows whether that 50% will come tomorrow or at a base of $1 or lower.
The chart that I posted to Jill earlier in a weekly time-frame shows that DROOY is near a bottom but it does not show any hint of a bottom yet forming. It does show support at $1.00 so that would bet all that a T/A student should hang his or her hat on as of the market close through today.
One last note is that DROOY has not been a participant in any of the NASDAQ rallys.
I hope this helps.
Reid |
