Product Review: Chartpattern by Dennis Peterson
ChartPattern is a website product by Dan Zanger, who gained fame and fortune by taking a brokerage account from $11,000 to $42 million in 23 months during the big bull runup from 1998 to 1999. He must be doing something right, wouldn’t you think?
With a website name like “ChartPattern,” you get one guess what he uses. But it is kind of a trick question. Zanger does use patterns, but he also uses his knowledge about how the market works. For example, the market buys on the rumor or expectation, and sells on the reality. He told me a story. A while back, he said, Yahoo’s earnings came in better than expected but the stock went nowhere, and then the market waited for another Internet stock, eBay, to report its earnings.
eBay was breaking down technically so it would take spectacular earnings for a move up. eBay’s earnings were modest, and the company lowered forward guidance and the stock plunged $20 after hours, but Zanger had already shorted 160,000 shares of eBay and made $3 million.
To enjoy Dan Zanger’s kind of success, it helps to know chart patterns, but it takes more. Putting aside his knowledge of “how the market works,” you’re probably wondering which pattern tool he’s using because there’s really only one good one, and it didn’t exist when Zanger made his initial fortune. This is a bit of a stumper, but rather than keep you in suspense, I’ll tell you. Each day he manually goes through 1,200 to 1,300 daily stock price charts, sometimes twice.