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Hi Monte,

How long have you been a chartist?

I don't know about the "ist" label, but I began learning to read financials in college, and have learned much more when I was managing investments later. Charts are nothing more than financials illustrated on a graph, allowing human analysis in a more convenient manner.

I guess, to answer your actual question... I began learning the effective use of business financials about 25 years ago.

D1,
I said;
I'll leave the bond yields explanation to WendyBG
Your Q;
Can I take this to mean you don't know the answer? Just asking...

Not at all.

Do I take this as an extended metaphor to mean that you believe that a trend shows a bias chance of the next move being in the same direction also?

Given that statistically the markets remain in-trend about 70% of the time... your understanding would be correct. The trend itself is a trail in time. The fact that we know that the trail TENDS to remain un-redirected about 70% of the time provides us with forecastability by deduction.

If so, I'll ask you, do you have any studies that show that this is the case? That any of it means anything substantial? How often is one day's or week's or month's move followed by the same in the next? *is* there really a correlation?

Yes, there have been quite extensive studies on this, and if you do a little digging you'll find extensive market statistics in this area.

The problem is that the human mind works by recognizing patterns. It is extremely extremely good at it. That's how we recognize things, by forming patterns. Unfortunately, we also recognize patterns when they're not there. Be it seeing the virgin mary in a piece of burnt toast, or a face on the moon or on a picture of the surface of Mars, of a kid seeing a monster in the shadows of their room. They're all examples of the human mind doing what it does best, and producing false results in the process.

This is exactly true, which is why learning the mathematical, objective rules of probability is so critical to success in the markets... along with ongoing emotional work to counter the tendencies we have to skew our own objective observations.

I find it unfortunate that many people invest and claim to be able to predict what will happen financial based on the same kind of logic. "Fooled by randomness".

I don't find it fortunate nor unfortunate. It is simply reality. You'll find exponentially more of these that you describe that live in the Fundamentalist world... the imagined justification of the markets according to subjective drama.

In the end, I like this quote;
"Money is always there but the pockets change; it is not in the same pockets after a change, and that is all there is to say about money."
Gertrude Stein

Those who address money subjectively TEND to release it to the pockets of those who treat it objectively.

Hi Monte,
He will soon attempt to explain why these statements do not contradict, at least in his mind.

Speaking of contradiction... now that D1 has learned and illustrated how to easily identify a trend himself, are you willing to learn and acknowledge the same?

Cheers,
Dave Donhoff
Strategic Equity & Mortgage Planner
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