At first glance the chart looks like some kind of stochastic or overbought/oversold indicator. If it is, the cliche is that stochastics work 80% of the time, which sounds great, except the 20% of the time that they don't work, they can have catastrophic failures. The technical indicator keeps giving stronger and stronger buy signals while the trader that took that first buy signal loses his shirt.
I think some people think that Gold will end up someday like Rhodium, up to 10k, and back down never to recover. I know that scares quite a few people. BTW, where is Weiss ? And BTW, it doesn't scare me at all.
<< <i>The technical indicator keeps giving stronger and stronger buy signals while the trader that took that first buy signal loses his shirt. >>
Not if he followed up with the subsequent sell signal. Chart indicates buy and hold is a thing of the past. >>
Your comment indicates that you don't understand stochastics or other overbought/oversold indicators. A trader shouldn't be following indicators they don't understand, especially the times they will fail. Like I said a 80% win rate sounds great, until a person realizes that 20% of the time the indicator fails in spectacular fashion.
<< <i>stochastics is the preferred method of determining when something has moved into an overbought/oversold condition. I'll settle for an 80% win rate. >>
An 80% win rate is really only a 60% win rate when the losses are figured in. And thats assuming you can minimize the losses to equal gains which is a difficult feat.
Since that chart was in a 20 day standard deviation format I decided to look at the 4 week SD chart over the past 3 yrs. Yup, as much as $1920 was off the charts, this dip is even further off the charts, rivaling anything seen in 2008. But also note that weekly CCI, BB width, and ROC are not yet near typically seen very oversold levels. The only ways to bring that huge weekly BB reading down is either lots more time or more downside/sideways movement or a combination of both.
Actually, I shouldn't have slipped BB's into that list. Those are at massive extremes and need to contract. But ROC is still >0 and CCI well above -100. Both those osc usually hit those targets in deep corrections. BB's can contract with a medium bounce here as well as marking some time.
Gold is at its strongest buy signal since 2009, and those who bought in 2010 are up at least 30% this year. I'll take 30% for one year any day of the week.
<< <i>note that weekly CCI, BB width, and ROC are not yet near typically seen very oversold levels
Ding, ding, ding!!!!
J6P is grossly underestimating the power of this selloff. It was/is violent, brutal, astonishing. >>
Could the roc and cci also be signaling a positive divergence (price vs indicator) ? Especially considering the daily went to extremes per these indicators.
NumbersUsa, FairUs, Alipac, CapsWeb, and TeamAmericaPac
derryb
Posts: 36,212 ✭✭✭✭✭
Comments
<< <i>The technical indicator keeps giving stronger and stronger buy signals while the trader that took that first buy signal loses his shirt. >>
Not if he followed up with the subsequent sell signal. Chart indicates buy and hold is a thing of the past.
Give Me Liberty or Give Me Debt
that scares quite a few people. BTW, where is Weiss ? And BTW, it doesn't scare me at all.
<< <i>
<< <i>The technical indicator keeps giving stronger and stronger buy signals while the trader that took that first buy signal loses his shirt. >>
Not if he followed up with the subsequent sell signal. Chart indicates buy and hold is a thing of the past. >>
Your comment indicates that you don't understand stochastics or other overbought/oversold indicators. A trader shouldn't be following indicators they don't understand, especially the times they will fail. Like I said a 80% win rate sounds great, until a person realizes that 20% of the time the indicator fails in spectacular fashion.
Give Me Liberty or Give Me Debt
<< <i>stochastics is the preferred method of determining when something has moved into an overbought/oversold condition. I'll settle for an 80% win rate. >>
An 80% win rate is really only a 60% win rate when the losses are figured in. And thats assuming you can minimize the losses to equal gains which is a difficult feat.
Knowledge is the enemy of fear
I do use more than just stochastic indicators. The more information the better.
In God We Trust.... all others pay in Gold and Silver!
Since that chart was in a 20 day standard deviation format I decided to look at the 4 week SD chart over the past 3 yrs.
Yup, as much as $1920 was off the charts, this dip is even further off the charts, rivaling anything seen in 2008. But also
note that weekly CCI, BB width, and ROC are not yet near typically seen very oversold levels. The only ways to bring that
huge weekly BB reading down is either lots more time or more downside/sideways movement or a combination of both.
roadrunner
Ding, ding, ding!!!!
J6P is grossly underestimating the power of this selloff. It was/is violent, brutal, astonishing.
Knowledge is the enemy of fear
those targets in deep corrections. BB's can contract with a medium bounce here as well as marking some time.
roadrunner
I'll take 30% for one year any day of the week.
<< <i>note that weekly CCI, BB width, and ROC are not yet near typically seen very oversold levels
Ding, ding, ding!!!!
J6P is grossly underestimating the power of this selloff. It was/is violent, brutal, astonishing. >>
Could the roc and cci also be signaling a positive divergence (price vs indicator) ? Especially considering the daily went to extremes per these indicators.