Have you ever taken a chart and looked at it from the flip-side?
Why would you do that? To avoid bias. There is a long bias and a short bias. We all have biases, but just need to confirm it by a simple test. Plot a chart of SYM and then plot the inverse of the chart next to it by using 100/SYM. You can make the numerator any size you want to get the price scale you want. In the example above I used 10,000/DIA to plot the inverse of the DIA as a $59 stock instead of a $168.23 stock.
If you see a difference in the charts then you have a bias and it would be good to take any of your charts and flip them over first to see before you take a trade.
Look at the chart of the DIA on the top left. It looks more bullish to me than bearish and my eye sees the resistance as more likely to be overcome to my eye than the chart on the top right. I see the base as more supportive and the area above as a zone to retest and work through the resistance. Therefore, I have a long bias. I see the chart on the right as bullish (bearish in reality, the inverse).
See what you find in yourself. We are all different and we also see different parts of the chart stand out to our eye when we flip it over. Check it out for yourself.
Hi Tim, I am short in AAPL at the moment for 3 days now. I will hold on to my short positions
timwest
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I didn't want to lose my work that I was doing on AAPL versus the DIA when I published this chart. I wanted to show how AAPL was lagging the market and that it was a bearish event and that something is wrong with AAPL. You can also see the LINEAR decline in AAPL relative to the market in the lower-right chart. People are SELLING AAPL very clearly in very steady fashion here. It is masked by the overall market's gyrations, but it is VERY CLEAR on the chart of the ratio of AAPL/DIA. If you had $10,000 short AAPL and $10,000 long DIA over the past 8+ days you would be sitting on a 7% gain, which is like the Dow Jones Industrials rallying 1000 points. It is a big deal and it is important to know. Big money is moving out of AAPL and we can only imagine why because we don't know why yet.
alexrozon
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Found this through google, your insensitive to inverse the chart in order to confirm a trade is superb advice. Three years later now, but sound logic as such hasn’t changed!
Great piece! Some platforms have an easy way of inverting by doing something like plotting inverse of XYZ expressed as "-XYZ". Would be nice if TV had a easy function to plot as well. It has done particularly well on CL_F recently.