Gloomy technical analysts get press coverage

Earlier this year – mid-February to be precise – the Weekend FT’s Money section printed an article by John Dizard.  Considered one of their more serious commentators, the piece was entitled ‘Technical analysts have a pretty gloomy outlook for risk capital’.  Instead of the negative drivel the Lex Column sometimes puts out, he did have a good stab – in just a very few words – to introduce the subject to the layman.  Please us the link here to read the whole article.

What caught my eye were the comments he attributed to Martin Pring, his use of charts relative to one another, say for example junk bond yields versus US Treasuries or high tech equities versus shares on consumer durable companies.  On the former he (Pring) says, ‘it has been a great indicator for the past 10-15 years, much more than it was before then.  It depends on whether you have a stable or unstable financial system.  Now I would say that credit players tend to be smarter than stock players’ – which will no doubt raise stockbrokers’ hackles.

MartinPring
Sorting through my chaotically filed notes I managed to find jottings made when Mr Pring addressed us at July 2012’s STA monthly meeting.   A talk entitled ‘Investing in the Second Lost Decade’ parallels with Japan spring to mind.  In his view a long term trend is 15-20 years (in line with his bond yields idea), while a cyclical move lasts 9 months to 3 years.  Predicting another 6 years of recession some may beg to differ though probably not the man on the proverbial omnibus on Main Street, USA.

He also stressed the importance of commodity prices on those of equities, noting that since 1830 stock markets rally in tandem with those of raw materials.  For this reason he likes to deflate indices by the Consumer Price Index.  Asset prices are sensitive to inflation, and now deflation, plus the ratio between these two.

A video of his presentation is available in the member’s are of the STA web site (www.sta-uk.org).  He has too many books to list here but perhaps his ‘Technical Analysis Explained’ is his best all-rounder while ‘Martin Pring on Momentum’ focuses on his forte.

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The views and opinions expressed on the STA’s blog do not necessarily represent those of the Society of Technical Analysts (the “STA”), or of any officer, director or member of the STA.

The STA makes no representations as to the accuracy, completeness, or reliability of any information on the blog or found by following any link on blog, and none of the STA, STA Administrative Services or any current or past executive board members are liable for any errors, omissions, or delays in this information or any losses, injuries, or damages arising from its display or use.

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About Nicole Elliott

Nicole Elliott

A graduate of the London School of Economics and Political Science (BSc Social Psychology) Nicole Elliott has worked in banks in the City of London for the last 30 years. Whether in sales, trading or forecasting technical analysis has always been the bedrock of her thinking. Key expertise lies within all areas of treasury: foreign exchange, money markets, fixed income and commodities.

She has also added to the body of knowledge of the industry writing the first western book on Ichimoku Cloud Charts. Strong media links and a cult following are due to her prescient calls on the markets and often entertaining format.

Nicole can be contacted at trending@sta-uk.org

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