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URL:  http://boards.fool.com/it-looks-obvious-after-it-happens-but-i-bet-if-i-30683237.aspx

Subject:  Re: Poll: Technical Analysis Date:  5/14/2013  12:41 PM
Author:  MDCigan Number:  17110 of 21596

It looks obvious after it happens, but I bet if I took 50 cases of breakouts out of long bases, however you want to define that, and 50 cases that looked the same, but didn't break out, most people wouldn't score better than randomly on identifying which is which, if you just removed the actual breakout.

This would be perfectly easy to test, in the same way that it is possible to test the reading of mammogram films, for instance. You know how they all turn out! So a TA expert should be able to consistently distinguish between the ones that will break out and the ones that won't. If he can only do it after the fact, it's not worth much.


DTM, I'm feeling deja vu here with you :) Didn't you learn anything from our ongoing convo with the technicals on NFLX back in 2011? :)

Either I'm not understanding what you are saying here, or you are not understanding my point. Not sure which is which? Did you read the link discussing TSLA?

Of course, one cannot in advance forecast which bases will breakout or breakdown when or continue to stay in the base. TA is NOT a crystal ball!!!

It is the recognition that it happening SIGNIFIES SOMETHING. When did TSLA breakout? 4/1. When was the quarterly results announced? TSLA was 45 on 4/1. Buying the breakout would have had you doubling your money in about a month. So I don't get the point about identifying it after the fact. Of course, this is an extreme example. There are not too many breakouts that double in less than a month. But yeah, the window of opportunity to buy a breakout is pretty narrow.
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