Technical analysis questions

CFA Level I
#1

Does measuring implication only exist in symmetrical triangle pattern or in all three types of triangle patterns?

Also

Are flag and pennant short term version of rectangle and triangle.

#2

All types.

Yes, respectively.

#3

Should I skip TA along with economics?

#4

In R12 3.4.3.2

In regard to the put/call ratio, the CFAI says

At extreme highs in the put/call ratio, market sentiment is said to be so extremely negative that an increase in price is likely.

Assuming the increase in price is the underlying asset?

The put/call ratio is a contrarian indicator, if the value is extremely high, market sentiment is negative, then there should be a decrease in price. But why the text say increase in price?

Also, regarding the VIX

When other indicators suggest that the market is oversold and the VIX is at an extreme high, this combination is considered bullish.

VIX is also contrarian indicator, if it is extremely high, how can the market be considered bullish?

#5

Because trend reversal is expected and ^VIX is contrarian indicator mostly for ^SPX. ^VIX is also inversed to ^SPX, when is extremely high, ^SPX is extremely low, and it’s strong bullish signal.

#6

So when stock market is low, it is bullish?

I thought bull = good economy = rising price = high price.

#7

Market is bullish when low price trend reversal is expected. Market anticipate overall economy trend approx. even 6 months before trend reversal in real economy. Sometimes those reversal are false signals colloquially called bull traps.

#8

I’d call it bull****.

#9

It says Wave b in the corrective wave in Elliott Wave is called bull trap.

#10

I have never studied EWT. For purpose of this exam, suppose is enough to remember:

  • 5-3 move trend direction in 1 cycle (up,down)

  • based on Fibonacci numbers (0,1,2,3,5, 8,13,21…)

#11

Well in CFAI book, it says the 2 second wave in the 3 in 5-3 is called bull trap.

Being watching youtube videos are Elliott Wave Theory, those technicians and chartists makes CFA currimulum so childish… LMAO.

#12

TA is a good thing, but IMO cannot be isolated from fundamental analysis. Often TA traders consider that TA is enough and they must not have any other info or knowlegde.

#13

Koromusha

Have you ever traded stocks? If you did, what is your trading strategy?

#14

yeah, I do. but I don’t believe in TA. Therefore I just purchase and hold.

#15

If you were day or swing trader, TA is only reasonable tool. As I said above FA knowledge is advanced basis to avoid stuck in bull trap or fake impulses.