Replies to post #156578 on ERHC Energy Inc (ERHE)

[Krombacher]

The Dane and other chartists...

TA has its place, in that charts have a way of telling you how well information about a stock has been propagated. In illiquid stocks or relatively unfollowed stocks, it can be useful to the extent that if big news hits and not everyone knows about it, you ***might*** see it in the charts.

For example, let's say the CEO of Erhc has a hypothetical heart attack. No one knows about it but the immediate family and a nurse and a doctor. The unscruplous nurse might decide to short the stock knowing what she knows. She's not doing it on insider information, but it is nevertheless information that few know about.

After seeing that she is making some money, she informs her husband, who then informs his poker buddies, and before you know it the CEO's papparazzi get wind of it, and then it makes it to some newspapers and message boards...and then bam the stock tanks.

If you were a chartist, in theory, you could have gained a whiff of the nurse selling short, her husband selling short, poker buddies selling short...but the trick is to discern all of that from everyday NOISE. After all it could've just been someone selling the stock to pay some bills. And therein lies the rub, how good can a chartist discern noise from a real trend based on information asymmetry?

In a very rudimentary sense, the SEC can for example tell if Martha Stewart is buying on inside information, because if it sees a huge spike in a stock just prior to news being released then it knows something is fishy. Is that charting? Sure.

Are there other trends? Like for example tax loss selling near the end of the year? Sure.

But where it starts getting ridiculous is when we start seeing golden crosses, the image of Jesus, cup and handles, etc. It's akin to reading Tarot cards. Furthermore, like the Tarot reader, chartists get their way by telling people what they want to hear.

Hence, you never hear a chartist saying the stock will tank sharply. Because that's not what people want to hear.

If you are so certain that "Golden Crosses", "Black Hammers" and the like result in outsized gains for Erhc, then SHOW ME THE DATA. Show me a study done that shows that 90% of golden crosses result in outsized gains, something published in a journal of academia. Then I'll believe.

Finally someone stated it correctly here. If you take a penny and double it everyday, you would be a millionaire within a month. If you can consistently make 20% gains every year for the course of your life, you would own the world's entire wealth. It can't be done...so chartists can't do it.

Krombacher

[jsc52033]

Right Dane, but there are many locations for Golden Cross. Some can be early such as the 8-21 while the 50-100 50-200 can be later The latter ones are watched by more investors so we can soon see a larger pop.