The Sarcasm Report v.93

Macke’s Purple Crayon: Watch the Trendlines on S&P, Crude and Gold

Charts take out the emotion. A chart doesn't pass judgment or make fun of you. A chart just tells you when the trend has turned against your position. Never fighting the trend is the first thing you learn in trader school. Someday gold's trend will turn lower. When it does, I'll sell.

It doesn't matter if you're talking about a relationship, a fist fight or a trade. You can attempt anything you want as long as you have an exit plan. When I'm playing momentum my exit plan never changes -- when the trend changes, I sell.

In an uncertain world, the old reliable purple crayon method is a security blanket, a hug from mom and warm cocoa all wrapped into one line and a ruler. That makes following my purple crayon strategy the best value on Wall Street.

Disclosures: Macke is long GLD.

Purple

The imperial robes of Roman emperors were Tyrian purple trimmed in metallic gold thread. The badge of office of a Roman Senator was a stripe of Tyrian purple on their white toga. Tyrian purple was continued in use by the emperors of the Eastern Roman Empire until its final collapse in 1453.

The Evolution of Crayon Colors

I wonder why, during the Great Depression, Crayola decided to double the number of colors. Seems like an odd time to innovate, due to higher costs, but definitely a morale booster during economic times, at least for those who could afford crayons. I wonder if the box of 16 became a status symbol.

One purple crayon is all it takes to attain wealth beyond all measure these days. No thinking. No analysis. If you can draw a straight line then prosperity is yours for the taking.

Crayola Crayons - Invention of Crayons

During the Great Depression, Binney & Smith hires local farm families to hand-label crayons. Each farm becomes associated with a different color name.

Thanks to the advancement of computer processing power, Wall Street's trading farms can now sell a nearly infinite supply of purple trend lines at amazingly low prices. You'd be a fool to not take advantage of their special offer.

Who knows, you might even become the trend line master.

January 6, 2007


0:55 - 1:32:

It would be sweet if they had like this game called Trend Line Master. Everyone logged in and then they'd try to draw trend lines on these charts and you competed with other people and whoever drew the best trend lines was like the trend line master.

And I've been drawing trend lines for, you know, years so I think, I think I'd have a reasonably good chance of becoming the trend line master.

So I've been loading up on these Chinese stocks the last few days. Those Chinese stocks, man, that's one thing that never goes down. Chinese stocks.

See Also:
Trend Line Disclaimer