orignially posted by Jerr on june 26, 2005
"Yes," said the ferryman, "a very beautiful river, I love it more than anything. Often I have listened to it, often I have looked into its eyes, and always I have learned from it. Much can be learned from a river. . . .
"You will learn it," spoke Vasudeva, "but not from me. The river has taught me to listen, from it you will learn it as well. It knows everything, the river, everything can be learned from it. . . .
Siddhartha stayed with the ferryman and learned to operate the boat, and when there was nothing to do at the ferry, he worked with Vasudeva in the rice-field, gathered wood, plucked the fruit off the banana-trees. He learned to build an oar, and learned to mend the boat, and to weave baskets, and was joyful because of everything he learned, and the days and months passed quickly. But more than
Vasudeva could teach him, he was taught by the river. Incessantly, he learned from it. Most of all, he learned from it to listen, to pay close attention with a quiet heart, with a waiting, opened soul, without passion, without a wish, without judgement, without an opinion."
"SIDDHARTHA, An Indian Tale" by Hermann Hesse
All technical indicators are extracts from a simple price/volume chart. That's it. An analogy would be that a price/volume chart represents a forest and the individual trees are each an indicator.
One can do a fairly good assessment of a forest if they do a good sampling of the trees IE. over bought/over sold indicators and moving averages and money flow, etc. Or, one can simple stand back and look at the entire forest. And like the river, listen to what the forest is telling you without emotion.
So, I said to myself, "Give it a shot and see what happens." And here is what I found for Palladium. (yea. like I couldn't pick something of less interest to all).
The weekly chart shows two simple things; (1) A severe drop in price from an all time high down to (2) A consolidation area that looks like a triangle.
First off, some may not like my resistance line that governs the triangle because it was not taken from the April 2004 top. I choose the line I did because it hits an far greater number of points than just the two otherwise, and seems to do a better job in demarking the resistance level over all. Plus, the April 2004 over shoot was no doubt a blow off period of extreme emotion and thus it is not uncommon for price to go above a trend line like it does only to come back under it, like it did as well.
Now then, whenever price moves a great deal in one direction, say from an extreme high like in the chart, what almost always follows is a period of consolidation, in this case a triangle. After that consolidation, price "usually" continues in the original direction, again, in this case it predicts a down move. How far? At this point the Dec 2004 low will be tested, probably even the May 2003 low as well. And although it is still early yet, some methods say that Palladium could go any where from 125 - 60. BRRRRR that is one cold river.
Could this analysis be wrong (maybe I am listening to a bad river or I have the radio turned up to high)? Sure, and if the resistance line of the triangle is broken with a vengeance, on a close, with high volume, then grab your sox's and hang on, for like Superman says it's "Up, UP,
and AWAY!"
Either way, only time, and the river, will tell.
