Technical analysis: Why too many formations on charts lead to arbitrariness

Technical analysis: Why too many formations on charts lead to arbitrariness

According to a report by www.faz.net,

The author of the article first gives an insight into his approach to the technical analysis of financial markets. He criticizes the arbitrariness of many patterns and emphasizes that analysts often influence each other and patterns become obsolete as a result. However, he pays particular attention to potential double tops, as they are easy to identify and can indicate an increased willingness to sell.

In summary, the S&P 500 reached a new all-time high and defended it. The author assumes that as long as the index does not fall back below old highs, the risks in the market are limited and the opportunities are good. The Nasdaq 100 has also left its previous high, which leaves the author uncertain about his previous assessments.

From an economic perspective, the new all-time highs of the S&P 500 and Nasdaq 100 could have a positive impact on the market. The increased willingness to sell due to potential double tops could lead to a correction or consolidation. However, it remains to be seen whether these assumptions will come true.

The author emphasizes that technical analysis alone is not enough and other factors such as sentiment should be taken into account. It is recommended that you continue to monitor market developments in order to make informed market decisions.