How Easily We Get Tunnel Vision
Just got home from work (yes, it’s after 9pm), popped over to YouTube to check out Oscar, and noticed this little video in one of the teaser lists. If you have any doubt as to how easily we humans see what we want to see, and only what we want to see, watch this clip, then remember it tomorrow while you’re looking at your charts and wondering how you got caught short when the market was telegraphing long, or vicey-versey:
Fan said,
May 12, 2007 @ 6:02 am
Totally fascinating. Thanks Will. Now how about a candlestick lesson on LXK? Looks like a bottom to me but as I do not trade this is merely hypothetical and would love to know how you read its chart.
Best,
Fan
Will said,
May 13, 2007 @ 9:06 pm
As you saw from the MHO example you pointed out last month, there are plenty of times when “I don’t see nuthin” is completely different than “there’s nuthin to see”. Sometimes I’m pretty thick.
Anyway, what I see on Lexmark right now is a nice hammer, if you use the freaky 2-day candles. Low volume, though. Big volume would be better. And it’s well below its 200-day moving average, so an RSI-based system (which would have given a buy signal) isn’t so useful.
As long as we’re speaking hypothetically, I could see getting long on a rise back into that sideways range which begins around 53.15 or so. The last two days may be some kind of depth-finding from that range, with the run down and return.
Let’s say long at 53 and a quarter with a stop of 52 and a target of about 55.50 (just below the 38.2% Fib retracement from the 4/23/07 high before the big failure). I’m in for two matches and a toothpick.
P.S. Check out AGP as well for another one that’s been beaten up, run over and left for dead.
Fan said,
May 14, 2007 @ 4:37 am
Thanks Will! I will take a gander at AGP right now and be back.
Fan said,
May 14, 2007 @ 4:42 am
Wow. Great chart of a potenitally sold out oversold stock. What I like is all the space up to the 20-day EMA. Stock could fail there and you would still have had a pretty decent trade. Very cool. Thanks again Will.