No, the STA isn’t a slavish follower of trends, let alone fashion. Catwalks, including the IPO and takeover kind, have their place, as do more conventional designer ones – even the Sylvanian Families toy one in Hamleys this Easter. Yes, really! With the Spring Equinox in the Northern Hemisphere this week, I wondered whether STA members had had a chance to read the latest online only version of Market Technician – issue 84 no less. The cover is delightfully colourful, the content cheerful, and the research great.
Perhaps my favourite piece was the one about Andrews Pitchfork analysis, co-written by Timothy Brackett and Kyle Crystal. A biased reader, I’ll admit, because for years I’ve favoured an admittedly slightly ‘fuzzy logic’ use of this trend channel type of technical analysis. Part 1 of a series, it goes all the way back to statistical analysts Sir Isaac Newton, Roger Babson and George Fillimore Swain.
John Murphy, in his book Technical Analysis of the Futures Markets (1986), listed this in chapter 15, Computers and Trading Systems, as ‘Misc.: Andrews Pitch Fork’ when grouping tools and indicators. I can vouch that March’s Market Technician article stands head and shoulders above the old book entry.
What’s also interesting is that April’s speaker at our regular monthly meetings – now at 20 Fenchurch Street’s Walkie Talkie building – will be Eddie Tofpik MSTA, head of ADM Investor Services for 26 years who, would you believe, is talking about our dear farming tool, the pitchfork, concentrating on how it can help traders ‘avoid the spikes’. Totally ironic!
As a trained statistician, with an emphasis on non-parametric statistics, I can understand why so many ‘get’ the pitchfork. Think of it as a mean regression with a standard deviation around it (which need not be 1 or 2, but what about a Fibonacci 1.61 per cent as suggested to me by Glynn Bradney MSTA years ago), and you can quickly see where technical analysis meets stats.
With thanks to Sylvanian Families Official