by Walter Z.
I have been producing a technical advisory service for the energy industry since the mid 1980’s. Coverage has included both the energy and financial markets. We eventually launched a separate financial advisory service because, from our perspective about 98% of what passes for financial advice are hope based personal opinions whose only connection with the realities of the market are coincidental and occasional.
Personal opinions play no role in our analysis. What we do here is technical analysis. We study the price action. We have no use for any opinions that we might have and we certainly have no use for the opinions of others. The price action of the markets convey a message to those willing and able to listen to it. We listen to what the price trends in the markets are trying to tell us and we pass on what we hear. The tools of technical analysis enable us to do this. And how exactly do we keep personal opinions isolated from the message of the market price action? Our analysis begins and ends with price charts and the tools of technical analysis. This approach leaves no room for opinions or beliefs.
When we see higher prices ahead it is because the price action itself indicates higher prices are on tap. We will never be bullish in order to inspire hope through cheer leading and sugar coated messages. When we see lower prices ahead it is because the price action of the market signals that lower prices are due. We will never be bearish because of negative personal views. Much of the financial mess that the world finds itself in is due to the unquestioning acceptance of the personal views and opinions of others. To assume that those in positions of power must know what they are talking about is a mistaken assumption. Those in positions of power or authority have a vested interest in maintaining the status quo. And the advice they convey is often designed to keep the status quo intact. This is what we call ‘cheer leading.’ A cheer leader will root for their team no matter how dismal the outlook. And we suspect that much of financial cheer leading is probably unconscious. The advisor may even think that they are being perfectly rational and objective. But financial advice that is not grounded in technical analysis can easily be corrupted by the collective mood of the market and by the personal goals of the analyst. This is not how we do things here at ICAP Technical Analysis.
We will not always be correct but you can count on us being objective. We are not stock brokers so we have no stocks or bonds to sell you. We are not investment bankers so our analysis is not intended to please certain corporate interests. As we employ a range of technical tools we have no emotional commitment to proving the superiority of any one particular system of technical analysis. The focus of our analysis is wealth preservation and enrichment. What is the safest place to hold ones hard earned savings? Is it the stock market or cash? Is it the bond market or treasuries? Is it a basket of commodities, or gold? We have no vested interest in the answer. What matters to us is correctly identifying the safest store of wealth and correctly forecasting financial trends in the major markets. We are not gold bugs, we are not perpetual stock market bulls, and we are not doom and gloomers. We strive to be clear headed, objective analysts.
It turns out that accurate forecasting is one is the rarest things in the financial markets. This scarcity was visible for all to see during the stock market decline from October 2007 and the commodity collapse from July 2008. It was almost comical how virtually all media personalities and fundamental analysts were non-stop bullish during the entirety of the down trend. Life savings were wiped out. The retirement plans for millions were retired. A stream of home foreclosures turned into a flood. But the stream of mindless, bullish platitudes from the talking heads of financial television never stopped. Statements like “there is always a bull market somewhere” and phrases like “the creative destruction of capitalism” are trite in a bull market but are wildly inappropriate in a bear market. And then just in time for major lows one started hearing about “the death of buy and hold.” So the generally available advice for investors, whether equities or commodities, has basically been to buy at the top – hold long all the way down – and then bail out at the lows.
Our motivation for offering this financial service has been our increasing discomfort with the quality of financial guidance that has been available to the average trader and investor. As just noted above the media supplied financial advice has ranged from the inappropriate to the negligent. We cannot just sit on the sidelines and watch this sorry spectacle. And that brings us to the next point. We cannot guarantee that our forecasts will always be correct. We cannot warrantee that we will always be able to hear what the markets are saying. There will be times when the outcome for a particular market will not be obvious and further price action will be necessary to clarify the situation. But we will always be listening to the message of the price action of the markets. When things are unclear we will say so. We will not substitute opinions for clear cut price action. We have a tried and true system of technical analysis. And even if the near term outcome is unclear we will still be able to identify the pivotal support and resistance points that need to be broken to clarify the situation and confirm the trend.
As noted previously I have been doing this since the mid 1980’s. However, while we are very experienced in technical analysis and confident in our skills, we do not want anyone taking our advice solely because they trust us. We do not want anyone taking our advise because we were right previously. It is said that war is too important to be left to the generals. It is our position that investment advice is too important to be left solely to the advisors. If a client acts on a piece of advice of ours we want it to be because they understand the analysis. So along with our subscription fees there will be homework. There are well over a thousand pages of technical tutorials on our website for the serious student of the market. And it will take only a few pages of reading to get a working knowledge of the methods and analytical tools that we employ.
As a starting point we suggest the following tutorials in the order listed from our website:
- Introduction to Technical Analysis – 6 pages
- Candlesticks – 29 pages
- Sentiment Indicators – 27 pages
- Why Technical Analysis – 109 pages
Having read these few pages it will become evident why the average investor loses money in the markets. We will feel successful if our technical advisory service helps one avoid the major pitfalls that cause financial losses. In this day and age it is not easy to accumulate a store of wealth. It is our goal to make it possible to secure the wealth that you have already accumulated.