Yes, the Chinese invented charting. I think it was first used to predict fish pricing and is ingrained in their commodities markets still today. If I remember correctly, candlesticks were used first and then P&F charts developed for longer term trends. Watts can correct me if I am wrong on this.
TA merely notes buying and selling patterns and predicts the odds of different outcomes. The best analogy is that of the weatherman who notes high pressure movements and low pressure movements and prevailing winds and then gives the most likely outcomes.
Nowadays, weather services are much more accurate and use satellites and dropsonds and all sorts of equipment.
However, traders are now using satellites to look at retail stores' parking lots and the raw materials from their suppliers' suppliers. Quant funds have even been known to trade in such a manner as to mimic chart patterns just to fake out day traders on highly liquid stocks.
SO charting only notes the probability of results by comparing observed conditions and comparing it against past behavior patterns. Since we are human and somewhat governed by human emotion, this can have appear to have an uncanny effect that appears to be voodoo. It is not. It is merely a collective of knowledge that says "I have seen this before and 30% of the time we get X, 20% ..Y, 50%..Z.
Sometimes it fails miserably.
Unlike what IATECLUBE said, no chartist takes credit for the move. That would just be stupid and it is an ignorant claim that I would compare to blaming the weatherman for the weather.
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I can not comment on the current chart because, although I expected a very bullish push, I never expected THIS! Glad that I am, my charts are a wreck and it will take some time to get some perspective. No one can chart this right now (Well, not me!), there has only been a hint at basing and consolidation only to ripped by another move upside. I need to construct a volume by price and a VWAP chart to see where ownership is now - and I need to look at everything six ways to Sunday.
Sorry this is so long, I am quite drunk.
