Patterns
I’ve been looking at stock charts for a long time. I mean a REALLY long time – like before the Internet when they came in big bound books. I’ve also been reading music for a long time. So when the concept of engine data analysis came along, I found the concept familiar. In music, you find the prettiest notes in the middle of the instrument’s range. High notes, low notes and giant skips in pitch tend to stick out. The veteran stock chart watchers look for things like double bottoms, triple tops, breakouts, volume surges, price gaps, and compare that with everyday ordinary behavior. So what does any of this have to do with this month’s puzzler? Patterns and expectations. With engine data analysis, there are patterns we expect to see and when they’re not there we have to figure out why. What matters to a stock trader is not what the fundamentals say is supposed to happen to the price, but what buyers and sellers do with their money – and that’s what you see in the chart. In studying an orchestral score you look for melody, harmony, counterpoint and dynamics to determine what the sound will be. With engine data, we […]