Citizen-T
Active Member
I'm not going anywhere, don't you worry. In fact, here is a really, really long post with various thoughts.
Rather than opinion I present you with fact: I'm up 120% on TSLA alone so far this year by watching the "drunken walk" and making moves based on it. My trading log says I've made 12 good trades and 2 bad trades in TSLA this year. That is not the kind of performance I expect to see from something that is "sufficiently chaotic". Just because you can't predict the moves doesn't mean they are unpredictable.
If you don't have a good understanding of why these things are important, or don't have the time and inclination to learn why they are important, that's fine. I don't advocate that everyone should do chart analysis or try to capitalize on this kind of volatility. In fact, if you don't have the time and inclination I would say DO NOT make short-term trades, you'll get killed.
That said, if you don't understand, participating in an argument about whether a move is technically significant or not seems pretty silly. You can dislike it if that is your persuasion, but the vast majority of professional investors use technical analysis to decide when to buy and when to sell. So realize that you are an amateur ridiculing something that you admittedly don't understand which is the industry standard. Even if you are right and it is just numerology, the fact that all the big money playing in the market is looking at the same thing makes it worth paying attention to. A sort of self-fulfilling prophecy if you like.
I welcome a discussion with anyone that is looking at the same chart and seeing something more or something different from what I saw. The comment about the low volume of the previous failed rallies was a very welcome addition to the conversation.
How about an example? Again, rather than opinion I present you with fact:
Is it purely by chance that the blood-letting yesterday stopped right at that red line, or did I tell you the day before that the probability of falling back below that red line was less than the probability of staying above it?
I was able to save some of my winnings from Monday by selling a bit at ~$32.50 and buying back when we touched that red line. Did I get lucky? Maybe. Did I take a calculated risk that was measurable? Absolutely. Is it still possible that in the coming days I'll be proven wrong and we will eventually fall below that red line, then the green one? Yeah, sure; but, the probability of that happening is less than the probability that we stay above it based on my calculations.
As always, any new news has the ability to completely disrupt these probabilities. Other's much smarter than I would beg to differ, but in my experience, this analysis is only valid in a vacuum. So when the news changes, I throw it all out the window. As an example: I made a comment some months ago that the 200-day was going to $35 and I was sitting on my hands until then. We stayed on that path for several days and my confidence was building, then news of production delays showed up in our forums which completely voided my predictions. I threw the whole plan of attack out and sold a chunk that day at ~$35.50.
Now, that was a great trade, but I incorrectly predicted that the 200-day or 50-day would be able to stop the selling after that news. I was wrong. One of my 2 bad trades this year was trying to buy back at that 200-day, which was far too early.
The reason that your comment about what the stock price was last year or whatever wasn't valid is because the new technical cycle only started after the sell off from that bad news. Furthermore, you'll note that we were stuck in that pattern of being unable to break through the 200-day while there was a news void. When we received the good news that production was ramping up better than the streets latest expectations, we again broke through the barrier (for the better this time). Now I believe we have entered a new technical phase, one where those lines provide support not resistance. If I'm right, what the stock did last week is just as irrelevant as what it did last year.
Again, news has the potential to send us right back below that line. For instance, if the supercharger announcement is a big letdown, or is so expensive a project that it brings Tesla's cash position back in question, we could be right back where we were last week.
While I don't suppose that I've convinced you that this stuff works, I hope I've at least given you the impression that we aren't just reading tea leaves here. There is a process, with rules, and math to be done; and, its effectiveness can be measured. So, while I don't expect you to adopt this strategy yourself, dismiss it out of hand at your own risk.
