The charting technique was developed by Ney in the 60s and he still used it til' today. It is extremely easy, so easy that you would not think that it is rationally workable. I experimented with it and posted my results on one of JBIL posts, but I cannot find that post nor do I remember the post #. I cannot find the actual chart on my messy desk. So I ll give a summary from what I remembered.....and I simply could not explain my analysis in words, but its very easy to understand on the actual charts.
I used a log chart from Yahoo (that explains your question on dollar scale) and I used the 5 yr chart (that explains the time scale, and it only goes back to 94's IPO). Long term (3-5yrs) is a 19 degree angle, intermediate term (1yr) is a 49 degree angle (taken from the Oct 9th decline line and also the 96 correction, same angle), and short term is a sharp 71 degree angle.
When I drew a line from one of the earlier bottom (must be early 1997) using the 49 degree angle, I saw a gap between the spot price at the time (which was about 45 in November) and the line that I drew (which meet the time line at 35-38 dollars, I could not tell exactly because of the poor scale of the chart and my lack of good equipment...I used my old $2 thing from college). So the current spot price has broken thru or very close to the support line that I drew.
By the way, I used the technique on SBUX on the same date and it WORKED. The stock rebounded from 32 to 39 within a few days.
The heavy volume and the 100k block (s) concluded my assumption that the stock's downside will soon halt. Many other high flyers have not experienced that YET but I am sure that they will.
You are my only true audience. I would do anything to give U updates on Ney and my analysis. You have put in some good stuff as well. U probably know by now that I dont bullsh*t like others, and I appeared to be calm most of the time(althought that I am actually not that calm). But I think the purpose of SI is to give neutral analysis and news, not BS. I think that althought I am not making money, I am helping others to do better and know the market in a more rational way (althought Ney's theory sounds so foreign to others). It just drive me NUTS when people use terms like profit taking, whisper numbers, earnings worries...to explain simple Exchange objectives. And when everybody uses those terms and his/her average mentality, the more ignorant people gets.
U should go to the library and pick up his books. Wall Street Gang and Making it in the Market has the charting stuff and good explanation of the Ney's ways to compete with the exchange.
In some sense, his prediction accuracy is little rusty. So I guess that learning his theory, then applying it to your stocks will be the best way to do it. He does not know YOUR STOCKS, right?
I still use William J' ONeil to pick stocks (which landed me on JBIL...). His system works pretty well. I try to read Soros, but he's too much of a genius to understand. But his boom/bust chart is also so simple that everyone can figure out that the stock market would crash due to overexpectations (which is determined by brokerage houses anyways).
Other than that, I just read whatever, from Lynch, Buffett to books on business like Grove, Gates, Schultz(Starbucks)...Not to mention the daily dosage of IBD (which is little more neutral and much more informative than the WSJ)
To let myself go of the stress of watching my stocks going south, I went and saw "Amistad" tonight with some people, pretty touching. A CLASSIC by S. Spielberg.
I hope you are getting better at market timing because I am learning alot lately too (never got so wracked before). The person who started, "Dont try to time the market" has to be either an idiot or an insider.
Hang on tight. |
