Wednesday, July 4, 2007
Another failed pattern
Here is the latest pattern from the TA crowd. Apparently since the Q's didn't reach the upper trend line before starting to decline this was confirmation that the pattern was going to break to the down side. Well if that is the case how come the Q's are at new highs. Just another example of how unreliable these patterns are. The markets are people buying and selling stocks. Buying doesn't stop just because two lines on a chart do or don't touch. As long as the big money is buying these bearish patterns are going to keep failing. I would be very hesitant to put much faith in patterns when investing unless they confirm what the big money is doing. How many think that Buffett would be worth 40 billion today if he had been trying to trade patterns for the last 40 years? The only thing these patterns can predict with any accuracy is the past and even that is questionable in my mind.