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Within minutes of her death, in a response as inevitable as sunrise, thousands of Twitter trolls rushed to their keyboards in a desperate attempt the be first to let us know their opinions of Queen Elizabeth II.
At one extreme were those who ascribed a transcendent, almost infallible quality to England’s longest reigning monarch. On the other, were those that fancied her a later-day Hitler in drag, who, as the modern face of colonialism, bears responsibility for the death and suffering of millions throughout the now and former British Commonwealth.
As with most things, the truth is likely somewhere in between.
From the (very) little I knew about the Queen, I liked her.
She didn’t lip off about things she didn’t understand, she wasn’t condescending or patronizing, and despite her high profile, she never mistook the stature of her position with celebrity, always avoiding using the former for cheap attention.
All traits which can’t be claimed by the author of what I can only describe as one of the most unserious pieces of financial journalism I’ve ever read, courtesy of The Economist.
The piece in question, in a not-so-subtle act of foreshadowing, is entitled, “Why investors are reaching for the astrology of finance,” and subtitled, “That technical analysis is in vogue indicates a certain uneasiness.”
But it only gets worse, as evidenced by the gems of passive-aggressiveness placed throughout this article, like this one [all emphasis mine].
…a small, dedicated cult of “chartists” or “technical analysts” believes that the movement of stocks, bonds and currencies can be divined by the making and interpreting of charts.
Or this Oxford comma-challenged snipe.
Their methods are many, varied and wackily named.
How about this clearly anti-Asian slander?
The “ichimoku cloud”, loved by Japanese traders, sees the construction of a cloud by—bear with this—shading the area between two averages of high and low prices over the past week, month or two months.
I must digress here for a moment and comment on this next sentence, which follows the one above.
A price above the cloud is auspicious; one below it is ominous.
It’s truly a wonder to behold this naked attempt at cleverness and depth as the author plunges into a kind of “look at me, don’t look at me” schizophrenia, imploring us to believe in the seriousness of her writing, though not in the subject.
The mediocrity continues with this.
These methods, though patently mad, have attracted attention lately because of how the s&p 500, the leading index of American stocks, has wiggled around.
Perhaps the real value of technical analysis is what its use tells you about market conditions. No one bothers with the chartists’ pretty drawings when the economy is good, profits are high and stocks are moving smoothly higher—nor, indeed, in the depths of a frantic bear market, when prices will plunge through any and all levels technical analysts are wont to draw. Much as people who are feeling restless about the direction of their lives are more prone to become interested in astrology, investors who are uneasy about the direction of the markets will reach for the easy reassurance of an eye-catching diagram.
I could go on, but it’s Friday night and I have to wash my hair.
Suffice to say, as one who writes a lot of words, the strawman argument here is easily recognized. An attempt to attribute promises and guarantees never claimed by any serious practitioner of technical analysis - which includes some of the biggest financial institutions who use it daily.
Those of us who also use it know that technical analysis is not a ‘Holy Grail,’ but a variety of tools with which to screen the market for opportunities - no different than the screens that fundamental investors use.
When Elizabeth Alexandra Mary ascended to the throne in March of 1953, there were many who were skeptical that the 25-year-old could fill the shoes of her father, King George VI, with some even predicting that her reign would be “immemorably short.”
Time has proved them wrong.
Five years before the Princess of York became Queen, Robert Edwards and John Magee - building on previous work by Charles Dow, Robert Rhea, and others - wrote “Technical Analysis of Stock Trends,” quantifying the foundations of the methodology, most of which are still in use today.
Yet, upon publication, many were skeptical about the value of technical analysis.
Time should have proven them wrong by now.
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