Post-Bubble Problems by David Vomund
Identifying these post-bubble problems will help you make appropriate adjustments to your trading system.
For the markets, these are extraordinary times. In the last five years we’ve experienced the largest equity bubble in US history, and also experienced a bear market comparable to the Great Depression. Technical analysis remains valid in the aftermath of the bubble, as market movement is still based on the laws of supply and demand.
The bubble and the ensuing bear market does pose problems to many forms of analysis, however. In this article I will expose three post-bubble problems in technical analysis. After learning about them, I hope you’ll be able to spot these issues in your own analysis and make appropriate adjustments.