I have been a CTA for the past 28 years and was one of the first to acquire that designation. Supposedly, this gives me some understanding of fundamentals and technical trading indicators and systems. In fact I have developed my own statistical indicators and have written programs which profitably trade the stock market, the commodity market and the derivative market. This in no way makes me an expert and I don’t claim such.

Let me preface my remarks with the fact that fundamentals over rule technical analysis and I believe that the fundamentals for Patriot Scientific are strong and I am long the stock, recognizing the fact that there are unresolved issues which keep some from buying the stock. I also believe that fundamental are reflected in the long term trends of almost all stocks. Short term, there are cycles of vacillation occurring due to traders establishing positions and taking profits. These cycles have very little, if anything, to do with the fundamentals of a company. Right now the monthly and weekly charts have turned positive and the daily chart is vacillating above and below the inflection point of approximately 55.29. A close below this point will turn my daily chart (short term) negative indicating an extension of the correction.

I have a hypothetical model portfolio which trades 20 stocks on a technical basis and as of right now the system is short all 20 of these stocks and has been short over the past 4 days and has made over 5%. This is contra-seasonal since approximately 85% of all the profits made in the stock market, historically speaking, are made between November and May.

What I have learned is that charts mean different things to different players. My interpretation of charts is that:

Intra day charts with less than one day time frames are used by scalpers in the market.

Daily charts are used by day traders.

Weekly charts are used by investors.

Monthly charts are used by buy and hold investors.

Charts are just a technical trading tool and they are used differently depending upon the investment philosophy of the person doing the interpretation.

Having said the above, I am long the stock and I wish for great things to happen to those of us who have believed in the fundamentals of Patriot Scientific.