Aug 25, 2024 4 min read

Weekend Market Report

Everyone hates Technical Analysis, or do they? Plus, forget iWatches, wear this instead!

Photo by Andrea Natali / Unsplash

Welcome to this weekend’s market report! Short and sweet and filled with curious information

In this week's issue 📨 :

Everyone Hates Technical Analysis But it Works
Zettelkasten links
Silver and Gold directional price forecasts
S&P500 historical price forecast
Invicta Designer Watches

Was this email forwarded to you? Subscribe here!

Everyone Hates Technical Analysis But it Works

Some people love technical analysis and others hate it. I’m in the “don’t care” camp, I’ll keep a lazy eye on it and will note that traders tend to believe in it.

Take Nvidia (NVDA) below. It started a downtrend after the last earnings and when it split. Using Technical analysis you would draw a top trendline (in purple) from the tops of the two red candles.

Magically - because all traders look for that line - prices rebounded to that line and are staying there. NVDA has hit an invisible barrier for its momentum and prices haven’t broken to the upside. The price action doesn’t bode well for NVDA and it needs to close higher in the days before earnings or we’ll have a post-earnings selloff.

Of course, if earnings wildly exceed Wall Street’s expectations and Jensen gives even wilder guidance, NVDA could shoot way past this magic line.

The reality is that we don’t know what’ll happen but what I will do is make sure to follow my rules. I will close out my call options right before the market closes on the day before NVDA posts earnings.

Zettelkasten Links

Welcome to a collection of links and notes that I find interesting. Affectionately called a Zettelkasten, a German word for notes in a box.

Silver price forecast 1 week ahead

Silver prices closed higher to 29.86 from $28.77 the week before. The price forecast was for lower prices this week, so the model was incorrect. The model forecast has been right 7 out of 12 times (58%).

The price forecast for Silver next week is for lower prices.

Gold prices forecast 1 week ahead

Gold prices closed higher to $2,548.69 from $2,498.60 the week before. The price forecast was for flat prices this week, so the model was incorrect. The model forecast has been right 7 out of 12 times (58%).

The price forecast for Gold next week is for flat to higher prices.

S&P500 historical volatility forecast 1 week ahead

Volatility on the S&P500 closed higher to 0.134 from 0.128 the week before. The volatility forecast was for higher volatility this week, so the model was correct. The model forecast has been right 9 out of 12 times (75%).

The volatility forecast for the S&P500 next week is higher volatility.

Invicta Designer Watches

For the majority of my professional career, I never wore a watch until my partner gifted me an iWatch. I enjoyed wearing that watch until the continuous “charge me” warnings annoyed me.

My late father would make fun of me and tell me I should get a “real” man’s watch. He was old-school in some ways, he liked collecting knives, watches, and coins. When he passed, my mother pulled out a box of the watches he wore and presented me with an Invicta watch that my father wanted to gift me.

It was a beautiful designer watch of Koi fish and I loved it. It looked different from my iWatch, had more weight to it, and was all mechanical. I could wind up the watch and let it run for a few days.

I put the watch away in my drawer and wear it on special occasions like fancy dinners or professional events.

Since digging through my father’s box of watches, I’ve rescued many watches and replaced worn-out straps and batteries in many of them. The watches that need batteries will keep their charge for 5 years and are cheap to replace at a Jewelers. I paid like $40 round trip, which comes out to $8 per year. That sure beats the $1,000+ price tag for an iWatch that needs charging every other day.

Some watches never need to be wound or have their batteries replaced! The Citizen’s line of Eco-drive watches uses solar energy to charge up a lithium battery and can run up to 80 days without seeing the sun. It’s a perfect mixture of old and new technologies.

I’ve come to enjoy wearing these old watches and have started looking online to buy new ones for myself. There’s something nice about wearing a gorgeous timepiece on your wrist that sets you apart from the crowd and their iWatches.

Thanks, Dad!