PDN vs TSX

For GT blog June 27, 2008

In search of the ultimate technical indicator.

Over the course of a year I may conduct several technical analysis presentations in addition to my teaching duties for the Canadian Securities Institute.

It is during these sessions I can always count on someone asking me for the perfect indicator - something that works all the time - a true "stealth" indicator. One would think with all that computing power along with cheap and plentiful data some mathematical genus would have invented the ultimate technical study.

I confess now to have the perfect indicator - I have had it for years – I now have under much personal anguish personal guilt decided to come clean and share it with you.

The perfect indicator is ---- The Straight Line

No computer needed - just a straight edge and a pencil


Trend Lines in Action

Cycles

A few comments on cycles

The long cycle dominates the shorter cycle - we prefer the intermediate or weekly cycle for our work - the cycle can generate about two trades per 12-month window

In most markets there is a high degree of sector cyclic commonality - but sometimes we will enter a period when there is cyclic opposition

Currently the gold complex is operating in cyclic opposition to the broader stock indices.



Cyclic Opposition in Action - Gold Stocks & the S&P500

Two Bellwethers

Are you feeling lost - adrift and without focus?

If so, that is because you are - lost, adrift and without focus.

Perhaps you look too much at "fundamentals". A fundamental analyst will study what a stock SHOULD be doing - and a technical analyst will study what a stock IS doing.

(wisdom thanks to Merv Burak)

We let the markets talk to us - a good example is the important chart below

There is a very important Elliott Wave component in play here - can you spot it?


Two Bellwethers - Important Test of Lows