Dirty Business
Updated
Yesterday I threw away all the indicators I have been using. A lot of dirt has cluttered my screen for too long.
I have also made many custom ones, I threw them out too. But I kept just one, a moving average.
Every* indicator refers to price after all. In the end, price discounts everything.
No price indicator can tell us something price doesn't tell. The sayings of price are hard to understand. That is why most of us use indicators to clear the picture.
*Well there are indicators that measure stuff that is not directly embedded into price action like volume, inflation etc.
RSI is the most used indicator for like, ever...
The same story, told by different indicators.
I have heard that the best analysts use very few indicators on their charts.
Volume and candle pattern/trend analysis is hardcore. These are some of the very few instruments of an experienced analyst.
Indicators are there to help us get some perspective on how prices work. Many of them must be thrown away when an analyst is experienced enough.
Clear information is power.
But all of that, I didn't know all of this time. After abandoning RSI I sought other methods of analysis. Stochastic RSI and KST prove powerful methods of momentum analysis.
In the end, most indicators refer closely to the original price action. It is just the perspective that changes.
So what does trend analysis tell us about equities right now?
I am purposefully hiding price action.
Annoyingly simple.
Final chart, Bitcoin:
I will keep using a Keltner-ish Channel since it provides a pure, automatic way to get a feel of how far above or below trend we are.
Clean up.
I have also made many custom ones, I threw them out too. But I kept just one, a moving average.
Every* indicator refers to price after all. In the end, price discounts everything.
No price indicator can tell us something price doesn't tell. The sayings of price are hard to understand. That is why most of us use indicators to clear the picture.
*Well there are indicators that measure stuff that is not directly embedded into price action like volume, inflation etc.
RSI is the most used indicator for like, ever...
The same story, told by different indicators.
I have heard that the best analysts use very few indicators on their charts.
Volume and candle pattern/trend analysis is hardcore. These are some of the very few instruments of an experienced analyst.
Indicators are there to help us get some perspective on how prices work. Many of them must be thrown away when an analyst is experienced enough.
Clear information is power.
But all of that, I didn't know all of this time. After abandoning RSI I sought other methods of analysis. Stochastic RSI and KST prove powerful methods of momentum analysis.
In the end, most indicators refer closely to the original price action. It is just the perspective that changes.
So what does trend analysis tell us about equities right now?
I am purposefully hiding price action.
Annoyingly simple.
Final chart, Bitcoin:
I will keep using a Keltner-ish Channel since it provides a pure, automatic way to get a feel of how far above or below trend we are.
Clean up.
Note
Now let's compare some assets.SPX as seen above is cautiously bullish. Another .com bubble may form in the years to come.
UKOIL is awaiting a crossover to confirm the bull market.
GOLD is quite bearish.
Finally, Bitcoin.
The Last Stand?
Note
What kind of sorcery is this?Four moving averages of SPX meeting together.
Note
SPX is overbought considering the past few months. You have been warned.The entire October-June rally is at stake. Pray this summer is not as trap-y as the last one.
Note
Analyzing many timeframes is crucial, not cluttering.First a retracement comes, then we can talk about how high we can go, IF we can.
Similarly to 1988...
Not all hope is lost however. The long-term trend is still intact. Again just like 1988.
Note
Multi-TF analysis is weird...Why was the first one a trap?
The 2W doomed the 1M chart. Pray the same doesn't happen now.
Note
Curiously, now is happening the exact opposite. A bearish Monthly chart is trapping the last bears. Bullish sub-month charts signal strength. Again just like 1991.Note
Butterfly EffectWe never know how many timeframes will fail. We can just sit there and watch.
There is nothing that one can predict. And no artificial intelligence can predict.
AI can easily feed the masses with lies. I'll be there waiting when the entire trading community plays with tools AI made, and I will patiently listen to people pretend to win in a game they didn't make.
Note
How much effort does it take for a bull signal to be u-turned?Note
PLUG looks good right now, it is a fair price.
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