Very good questions. If you're trading, a maximum would be 10. I take 25. I can get back data for new issues. I'm drawn to an issue based on fundamentals. Then I check what has been happening on flow state. This tells me to what extent the play is developing. As I develop a conviction about the potential fundamental power to earn, I monitor the phase of discovery. Tick volume analysis is better at developing good exits from extended issues rather than short sale candidates or buy entries. It also helps you to hold when a stock is approaching full expected value. It is a lot of work unless you have written extensive programs that model your style like I have. I don't recommend bothering with all of this, but it does tell me that if there is a reason, like Japan printing money as they should have been doing 9 months ago, you'll see ABX take off. You couldn't see that looking at traditional TA or the chart.
I no longer trade, use margin, go short, buy derivatives. Demand/supply conditions are not of much value with all of that. Trading is just and only guessing. It's a negative expected return game so eventually you'll go bust or worse. This is the universal and unspoken truth of Wall Street. You only hear about transient success, never about the oceans of grief.
With ABX the stock could be under indefinite accumulation with price languishing. Without a rationalization to hold, a belief in higher prices, translation will not develop. During the '70s the psychological conditions were available for the price to soar, but gold entities dogged it. In '79 when the Volcker FED started expressing to the markets that gunning the money supply had to be curtailed and the FED must allow the free market to establish price equilibrium for cost of funds, gold finally started up. The cat was out of the bag. The FED could no longer throw gasoline on the fire. Without things all ablaze, the net would be monetary restriction given the propensity to borrow to beat rising prices for commodities and real estate. It was a lock intrinsic deflationary scenario that could be anticipated. What does gold price do in light of its impending collapse? Parabolic up. Presumably people bought gold because of safety. Gold rose in lock step with interest rates. Tick volume showed exceedingly thin buying, plenty of activity, and no work being done. The classic parabolic short squeeze. I guess they were expecting the collapse of Western Civilization. You can't underestimate how stupid experts can get, since there was little public direct involvement. Worse than the minnows and lemmings. |
