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Erik McCurdy
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Erik is the senior market technician for Prometheus Market Insight and has been performing chart analysis since 1995. The software program that he developed to monitor long-term stock market trends has correctly identified 92% of the cyclical turning points in the S&P 500 index since 1940. His... More
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  • EU Announcement Spurs Unusual Market Moves 1 comment
    Jun 30, 2012 12:20 AM | about stocks: UUP, GLD, USO

    The announcement of the latest "solution" to the sovereign debt crisis in Europe spurred large, unusual moves in several markets today, including the US dollar, gold and oil.



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    As demonstrated by our audit results, judiciously applied chart analysis facilitates the development of highly reliable market forecasts and signals. However, as we often note, chart analysis is a tool, not a crystal ball. There are no certainties in the realm of financial market forecasting, only possible scenarios and their associated probabilities. Both technical and cycle analysis provide the most reliable outlooks when markets behave in a well-defined, orderly manner. The types of extreme moves experienced by global markets today are highly unusual, occurring only about 4 percent of the time historically. In many cases, the unusual price behavior moved against highly likely scenarios.

    On market days like today, many observers will dismiss the usefulness of chart analysis altogether, which is a common emotional response. However, it is important to remember that emotion is always your enemy as a market participant. Again, there are no certainties in this arena, only possibilities and probabilities. Even a scenario that is 80 percent likely will not occur 2 out of every 10 times. Of course, certainties are not required to be a successful investor or trader. Aligning yourself with the likely scenarios and protecting yourself from the unlikely ones are the keys to producing consistent profits over the long run, and quality chart analysis enables you to accomplish both of those objectives.

    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

    Stocks: UUP, GLD, USO
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  • CahaTrader
    , contributor
    Comments (112) | Send Message
    Did you really publish this to tell us something that everyone in the entire market already knows? Well, thanks.
    30 Jun 2012, 04:42 AM Reply Like
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