BearTrap

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Its a pretty common paradigm tho. Smart money early, idiots last.

Get out at the peak of dot.com then into property (1999), get out ou of property in 2003/4 after making a killing and into the new share bull market etc etc. The idiots get in late and hang on until its negative.

Unfortunately tho with the global deleveraging and the massive growth in money supply and the stimulus skew, the counter cyclical nature of the two has gone and where this train crashes with the loss of what assets is conjecture and opninion, hence the gold as the last vestige of wealth rally.

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Its a pretty common paradigm tho. Smart money early, idiots last.

Get out at the peak of dot.com then into property (1999), get out ou of property in 2003/4 after making a killing and into the new share bull market etc etc. The idiots get in late and hang on until its negative.

Unfortunately tho with the global deleveraging and the massive growth in money supply and the stimulus skew, the counter cyclical nature of the two has gone and where this train crashes with the loss of what assets is conjecture and opninion, hence the gold as the last vestige of wealth rally.

Yeah the main reason I hate it is that it is pretty much useless. No one can even agree where we are on the damn things and I have yet to see anyone pull up a chart of something real which follows it close enough for it to be useful.

I think my hatred grew watching people sit around arguing about where we are in the chart without referring to anything outside the damn chart.

(basically it is an analogy done in colour in my gentle and soothing opinion)

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Yeah the main reason I hate it is that it is pretty much useless. No one can even agree where we are on the damn things and I have yet to see anyone pull up a chart of something real which follows it close enough for it to be useful.

I think my hatred grew watching people sit around arguing about where we are in the chart without referring to anything outside the damn chart.

(basically it is an analogy done in colour in my gentle and soothing opinion)

When you feel something is overbought get out, when you feel it oversold get in (flip for shorts). I use RSI 14 and an own developed stochastic oscillator for currencies and indices.

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the charts are fine as a distillation of one's views. if you believe that property is in a bubble the chart may help you to explain your belief. the problem, and perhaps this is why tor doesn't like it, is that it is not evidence of anything. and perhaps this is why he doesn't like analogies either--because they don't provide raw data and objective evidence, they simply confirm and express one's beliefs.

so long as one manages to maintain that separation and use analogies/bubble charts in their appropriate place (as a description of one's view rather than as evidence of a phenomenon) that's fine. but i think that distinction is very difficult to maintain and often breaks down. the result of this breakdown is that what ostensibly began as a search for an answer turns into a search for a justification. one focuses less on examining the data on its own terms and focuses more on fitting the data into the accepted schema.

this is the basic distinction between "good research" and "bad research" imo. the search for a justification leads to a very narrow field of vision and limits the development of one's theories (after all, one already knows the final destination) and the result is a purely academic exercise (in the negative sense of the term). with good research you can end up in very unexpected places--which is what makes it exciting to read and to write. the problem, of course, is that good research is very hard to do and requires a lot of time spent on digging up and assimilating data...

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the charts are fine as a distillation of one's views. if you believe that property is in a bubble the chart may help you to explain your belief. the problem, and perhaps this is why tor doesn't like it, is that it is not evidence of anything. and perhaps this is why he doesn't like analogies either--because they don't provide raw data and objective evidence, they simply confirm and express one's beliefs.

so long as one manages to maintain that separation and use analogies/bubble charts in their appropriate place (as a description of one's view rather than as evidence of a phenomenon) that's fine. but i think that distinction is very difficult to maintain and often breaks down. the result of this breakdown is that what ostensibly began as a search for an answer turns into a search for a justification. one focuses less on examining the data on its own terms and focuses more on fitting the data into the accepted schema.

this is the basic distinction between "good research" and "bad research" imo. the search for a justification leads to a very narrow field of vision and limits the development of one's theories (after all, one already knows the final destination) and the result is a purely academic exercise (in the negative sense of the term). with good research you can end up in very unexpected places--which is what makes it exciting to read and to write. the problem, of course, is that good research is very hard to do and requires a lot of time spent on digging up and assimilating data...

I can produce charts that show an index or currency is overbought or oversold using RSI and SlowStoch. I can't on property since its a gamed and manipulated bunch of numbers.

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I can produce charts that show an index or currency is overbought or oversold using RSI and SlowStoch. I can't on property since its a gamed and manipulated bunch of numbers.

i don't know anything about technical analysis, but my very rudimentary understanding of the issue is that, if the bulk of other currency traders are using technical analysis, then it becomes a self-fulfilling prophecy. in that situation, the ideal model will not so much predict the movement of currency so much as it predicts the movement of other technical analysts. that's just my uninformed impression--could be entirely wrong. in many cases there is probably a strong degree of correlation between the external reality and the charts, but its still at one remove.

with housing, you simply don't have the liquidity and movement that would make technical analysis terribly useful, i am guessing. anyone remember the ridiculous extrapolated chart of housing prices that earthsta used to put up? i asked him to explain how he arrived at those numbers but i think his response was "i'm a rich day trader so stfu" or something along those lines.

using the tool proper to the job seems the wisest course.

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i don't know anything about technical analysis, but my very rudimentary understanding of the issue is that, if the bulk of other currency traders are using technical analysis, then it becomes a self-fulfilling prophecy. in that situation, the ideal model will not so much predict the movement of currency so much as it predicts the movement of other technical analysts. that's just my uninformed impression--could be entirely wrong. in many cases there is probably a strong degree of correlation between the external reality and the charts, but its still at one remove.

with housing, you simply don't have the liquidity and movement that would make technical analysis terribly useful, i am guessing. anyone remember the ridiculous extrapolated chart of housing prices that earthsta used to put up? i asked him to explain how he arrived at those numbers but i think his response was "i'm a rich day trader so stfu" or something along those lines.

using the tool proper to the job seems the wisest course.

Good points.

I don't believe in Fibbonacci numbers but most do so it is a prophecy. BUT, it was once tradition when (smart) money left stocks it went to property. Now with massive money oversupply (M3) and Zirp but all on massive protection of 9:1 to 4:1 overleverage the game is up.

Techs on stocks and currencies are still OK.

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