I am not a big believer in correlation equals causation.  I am not even a big believe in chart correlations and this is coming from someone who spent a lot of time studying technical analysis and DeMarks.  Just because a chart says X or Y, does not mean it is going to happen.  If charts where 60% true, then there would be no other need for any type of investment analysis.  We would all sit around and just read charts about the future.  For this reason, I think we need to be careful at the temple of chart worship, but we should be very aware of the real world as it has a nasty habit of getting in the way and usually at the moment, we forget the meaning of hubris.

Continue reading →