Who knows the future?

But I am going to make it even simpler. You can learn the absolute foundation of all Technical Analysis (TA) if you know what these cities have in common: Kalaburagi/india, Ankara/turkey, Polokwane/south Africa, El Paso/ Texas, and Manila/philippines.

‘FUNDAMENTAL analysis attempts to forecast future stock price movement based on the macroeconomic, microeconomic, and corporate data.” This analysis is trying to figure out why a price is moving in a particular direction. For example, “Does the price properly reflect the current earnings growth? Buy.” Or “The stock has never traded at a Price-earnings-ratio of more than 25. Sell.”

“Technical analysis attempts to forecast future price movement based on historic and current price movement.” This analysis is trying to figure out how a price is moving in a particular direction. “The price is at the top of a several year trading band. Sell.” Or “For the last seven months, the price has closed each month higher than the previous period. Buy.”

I have never been a successful trader using the “fundamentals.” The earnings go up and my stock price goes down. And if the Fed cuts interest rates, stock prices will go higher. But what about “July 15, 2024: Two quarter-point rate reductions are fully priced in for 2024.” Do stock prices already reflect the interest rates cuts that are coming in the future?

As a stock trader apparently I don’t even need interest rates to go down because the price won’t go higher when and if they do drop rates as the cuts are already “priced in.”

I’m confused. I guess that is why I have never been an ‘ Investment Strategist’ or ‘ Senior Economist’ and that my favorite shoes are a pair of blue camo Crocs. However, in the past five years, CROX is up 475 percent. Breaking resistance at $28.00 is when the price took off.

If you would like to learn about Technical Analysis, you can easily search on the Internet for the following books and websites. “Best 25 Technical Indicators that Every Trader Should Know.” Or “The 9 Best Technical Indicators for the Stock Market.” Or “The 5 Best Technical Indicators for stocks every trader should know.” Or—my favorite— “The BEST Leading Indicator For Stocks.”

But I am going to make it even simpler. You can learn the absolute foundation of all Technical Analysis (TA) if you know what these cities have in common: Kalaburagi/india, Ankara/ Turkey, Polokwane/south Africa, El Paso/ Texas, and Manila/ Philippines.

All of these cities—and a few hundred more worldwide—have a ‘Ring Road’ or ‘Metropolitan Circumferential Highway’ encircling a city. They are basically all the same. I know that our Edsa ring ends at Manila Bay. But you can still drive the ‘ring’ using Roxas Boulevard and beyond to complete the circle. Things are always a little more difficult in Manila just like profiting on the Philippine Stock Exchange.

However, after you have driven the 26-kilometer Boulevard Périphérique de Caen in France, you know fairly well how these circumferential routes function wherever you may find them. Keep going forward without turning off the road and you will make a full trip and end up where you started. Technical Analysis behaves basically the same way.

Like the “trend” of the road, stock prices keep going in a direction—up or down—until they stop, and fighting the trend is like looking for a road short cut; not smart. Like on all roads, there are patterns— traffic slows to look at an accident— that repeat themselves over virtually all price movements and time periods.

Certain TA patterns such as Double Tops are deadly signaling a decrease in the price. Price Gaps are critical. If you already own a stock and a chart pattern breaks out upside in a gap, then hold on for a strong move. The performance of Upside Gaps shows prices improving 85 percent of the time. However, the performance of downside gaps shows prices decreasing 90 percent of the time. A Ring Road always completes a circle.

We are told that Fundamental Analysis (FA) gives us clues about future price movement. Better fundamentals should be better price action. Is that accurate?

The price of crude oil falling over the past one year and five years looks

like the world is heading for a recession not a recovery. US Natural gas prices have fallen as if there is no demand. Equities in the US and elsewhere are falling like the top is in for big tech and the AI hype is over.

The uptrend in the PSE Composite index during the past four weeks, up more than 10 percent as of last Friday, indicates the tensions between the Philippines and China, the local political drama, and concerns about inflation and GDP growth are over or at least will be soon.

Which will be more accurate about the future? The news and the experts? Or the stock market?