Despite what people may otherwise tell you or any preconceived ideas you may have, there are only two things that move stock prices. They are supply and demand – nothing more and nothing less. This is the foundation of basic economics as shown in the graph below. Since quantity remains the same, price is what […]

The Euro is going down, and is showing extremely weak technicals, which underlie the festering Greece debt fundamental problems. This is the first test of the 20-EMA after staying away for quite a long time, showing the bearish pressure. It also coincides with a breakout below the support of 1.92 and a pullback. On an […]

After completing an inverted H&S, the S&P 500 has proceeded to make new highs. Judging by the numerous strong white bars, the upward pressure is quite strong. It might be a good idea to go long on a pullback, perhaps on a test of the breakout to new highs. On a side note, I will […]

A similar-looking pattern suggests a lot of upside, especially if it finds support at the W-pivot and both EMAs. Please ignore the volume, it’s not working right for this index. Based on the length of this pattern, we could be seeing upside moves of beyond 12,000. Be ready to start buying!

The random walk theory, which started off from academic offshoots, put forth the idea that one should give up trying to predict or beat the markets because it was impossible to do so. In theory, this theory sounds plausible, but in practice, financial history has proven otherwise, with both investors and traders consistently beating the […]

Today, I was invited as a guest speaker to give a talk at 2009 AGM of STATS (Singapore Technical Analysts & Traders Society) on the “Strategic Outlook for 2010”. Before the talk, there was a poll, and it seemed that the general consensus is for a correction in the medium term. Here also some of […]

Price action and volume lies at the core of technical analysis, since that is all the data a market technician works with. Almost all technical methods, such as chart patterns, candlestick patterns or even Elliot wave are studies of price action. Indicators like RSI, Stochastics or MACD are all calculated from price data as well. […]