A word of caution: "technical chart analysis" is based on mass psychology of traders. There is no mass psychology affecting the SOI values, so this analysis is unsuitable.
I guess I need to
REPEAT a couple things that I have stated before ..... plus add one other piece of information that may be obvious to some, but not obvious to others:
1) I am a "
FUNDAMENTAL GUY". As I have stated in the past on at least a couple of occasions ..... the
FUNDAMENTALS CAUSE THE TECHNICALS (ie the chart) ....
NOT the other way around. In fact .... a chart, whether you are talking about a chart of "widget production", ice in the Arctic, the chart of the number of Tesla cars produced, or a chart of ENSO ... is a chart of what has
ACTUALLY HAPPENED. Trend analysis has likely been around as long as there has been trade in the world ..... for more than a thousand years. So while it is a part of what people refer to as "technical analysis" of stocks and bonds..... it is used by people focused on
FUNDAMENTALS every day ..... whether that be in science applications, financial applications, economic applications, etc.
2) Technical analysis of stocks/bonds includes a myriad of other methods that "technical analysts" use to analyze a given stock/bond. I am
NOT one of "those people". My background is in fundamental analysis
AND OBSERVATION (ie observation of management, culture, people, historical trends, costs/revenues, etc). While "trend analysis" is
ONE PIECE of "technical analysis" ...... it is used by folks like me (fundamentally focused)....
ALL THE TIME.
3) There is always a
REASON for the changes in a chart of what I would call "physical things" ..... especially physical things in science (as opposed to the chart of stocks/bonds which is simply a chart of buyers and sellers and the price they bought and sold.... plus some other "technical" aspects of a stock/bond chart).
There is no "underlying psychology" involved in a graph of ENSO, Arctic ice melt, temperatures, etc. In the chart of a stock/bond ..... there
IS UNDERLYING PSYCHOLOGY. In the chart of monthly Tesla production, there is also likely "underlying psychology": (1) are people "waiting" until EV's really catch on before buying, (2) do people TRUST EV's, (3) are people waiting until price drops more, etc. So even in the "physical world" in business ..... there are underlying effects of psychology ...... which is
NOT present in the chart of "physical science" things such as ENSO, ice, temperatures, etc. BUT .... there are
DEFINITELY UNDERLYING PHYSICAL THINGS that effect the chart. And the chart, for people who are "observers" ..... can serve to prod questions ..... and questions can sometimes lead to answers (the better the questions... usually the better the answers).
For instance ...... for the chart of ENSO, there are actual
PHYSICAL REASONS why the chart looks like it does. There are reasons why, over the past couple of years ..... that it has bumped up against "resistance", and physical reasons why the "intermediate lows" have become
HIGHER AND HIGHER. As a FUNDAMENTAL GUY ..... I try to think (1) what ARE the reasons for that, (2) what is
LIKELY FUTURE DIRECTION?
Trend analysis
PROMPTS FUNDAMENTAL PEOPLE LIKE ME TO ASK QUESTIONS ..... and to try to "peer into the future". And they can be very useful.
So whether you are studying ENSO, the rise of sea levels, the rise of temperatures, etc ...... a simple chart can be a very good
VISUAL TOOL to prod you in asking questions (of yourself or others) about the
UNDERLYING FUNDAMENTALS.
In short....chart analysis of a
PHYSICAL SCIENCE thing like ENSO is very different from a chart analysis of a stock, because there is no "psychology" present. But it can be a
VERY USEFUL tool when used properly.
